# EDGAR Filing Document

**Accession Number:** 0001834868
**File Stem:** 0001493152-26-020738
**Filing Date:** 2026-4
**Character Count:** 1127127
**Document Hash:** b6d89fcb77d0ab0e8fbc9711f712b069
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-26-020738.hdr.sgml**: 20260430

**ACCESSION NUMBER**: 0001493152-26-020738

**CONFORMED SUBMISSION TYPE**: 1-K

**PUBLIC DOCUMENT COUNT**: 20

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260430

**DATE AS OF CHANGE**: 20260430

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Alternative Ballistics Corp
- **CENTRAL INDEX KEY:** 0001834868
- **STANDARD INDUSTRIAL CLASSIFICATION:** ORDNANCE & ACCESSORIES, (NO VEHICLES/GUIDED MISSILES) [3480]
- **ORGANIZATION NAME:** 04 Manufacturing
- **EIN:** 852764555
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 1-K
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 24R-00945
- **FILM NUMBER:** 26927236

**BUSINESS ADDRESS:**
- **STREET 1:** 5940 S. RAINBOW BLVD
- **CITY:** LAS VEGAS
- **STATE:** NV
- **ZIP:** 89118
- **BUSINESS PHONE:** 619-326-4411

**MAIL ADDRESS:**
- **STREET 1:** 5940 S. RAINBOW BLVD
- **CITY:** LAS VEGAS
- **STATE:** NV
- **ZIP:** 89118

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Alternative Ballisitics Corp
- **DATE OF NAME CHANGE:** 20201203

## Part

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 1-K**

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

**For the fiscal year ended: December 31, 2025**

**<u>Alternative Ballistics Corporation</u>**

(Exact name of issuer as specified in its charter)

<u>Nevada</u> <u>85-2764555</u> <br> (State of other jurisdiction of (I.R.S. Employer <br> incorporation or organization) Identification Number)

**5940 S. Rainbow Blvd.**

**Las Vegas, Nevada 89118**

(Address, including zip code of principal executive office)

**619-326-4411**

(Issuer's telephone number, including area code)

**Common Stock**

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

**Part II.**

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
|  | Page |
| [Cautionary Statement Regarding Forward-Looking Statements](#sw_001) | 1 |
| [Item 1. Business](#sw_002) | 2 |
| [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](#sw_003) | 33 |
| [Item 3. Directors and Officers](#sw_004) | 37 |
| [Item 4. Security Ownership of Management and Certain Securityholders](#sw_005) | 45 |
| [Item 5. Interest of Management and Others in Certain Transactions](#sw_006) | 47 |
| [Item 6. Other Information](#sw_007) | 48 |
| [Item 7. Financial Statements](#sw_008) | F-1 |
| [Item 8. Exhibits](#sw_009) | 49 |

---

Unless the context otherwise indicates, when used in this Annual Report on Form 1-K (this "Annual Report"), the terms "the Company," "we," "us," "our" and similar terms refer to Alternative Ballistics Corporation, a Nevada corporation. We use a twelve-month fiscal year ending on December 31<sup>st</sup>. In a twelve-month fiscal year, each quarter includes three-months of operations; the first, second, third and fourth quarters end on March 31<sup>st</sup>, June 30<sup>th</sup>, September 30<sup>th</sup>, and December 31<sup>st</sup>, respectively.

The information contained on, or accessible through, our website at www.alternativeballistics.com are not part of, and are not incorporated by reference in, this Annual Report**.**

i

**CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS**

This Annual Report contains certain forward-looking statements that are subject to various risks and uncertainties. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "may," "will," "should," "potential," "plan," "intend," "expect," "outlook," "seek," "anticipate," "estimate," "approximately," "believe," "could," "project," "predict," or other similar words or expressions. Forward-looking statements are based on certain assumptions, discuss future expectations, describe future plans and strategies, or state other forward-looking information. Our ability to predict future events, actions, plans or strategies is inherently uncertain. Although we believe that the expectations reflected in our forward-looking statements are based on reasonable assumptions, actual outcomes could differ materially from those set forth or anticipated in our forward-looking statements. Factors that could cause our forward-looking statements to differ from actual outcomes include, but are not limited to, those described under the heading "Risk Factors." Readers are cautioned not to place undue reliance on any of these forward-looking statements, which reflect our views as of the date of this Annual Report. Furthermore, except as required by law, we are under no duty to, and do not intend to, update any of our forward-looking statements after the date of this Annual Report, whether as a result of new information, future events or otherwise.

You should read thoroughly this Annual Report and the documents that we refer to herein with the understanding that our actual future results may be materially different from and/or worse than what we expect. We qualify all of our forward-looking statements by these cautionary statements including those made in Risk Factors appearing elsewhere in this Annual Report. Other sections of this Annual Report include additional factors which could adversely impact our business and financial performance. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. These forward-looking statements speak only as of the date of this Annual Report, and you should not rely on these statements without also considering the risks and uncertainties associated with these statements and our business.

**<u>Item 1. Business</u>**

**Overview**

Alternative Ballistics Corporation is a next generation less-lethal technology company that specializes in the production and distribution of a less-lethal impact round known as The Alternative® designed for the law enforcement industry. After several years of R&D, we completed an extensive series of ballistics testing of The Alternative® in the fourth quarter of 2022. In the first quarter of 2023, we completed our comprehensive training program with the recommendations based on ballistics data gained from the tests and introduced our product to the market through ongoing pilot programs with U.S. police departments and contracting internationally with agencies in foreign markets.

The technology that we designed is a bullet capture device that attaches to an officer's service weapon. It was developed by a group of diverse individuals from law enforcement, military, and business backgrounds with the mission to design an effective tool to resolve certain types of "potential" lethal situations with a less-lethal force option that not only provides a de-escalation tool for the officer to attempt to preserve a life, but one that also optimizes the responding officer's safety.

The Alternative® has evolved with multiple iterations over several years and is backed by several U.S. patents with patent applications filed in 16 additional countries through a combination of direct filings and subsequent filings through the PCT Application process. The current product iteration represents the safest, most accurate, and most effective model in the product's history and has gone through several rounds of extensive ballistics testing to ensure its safety and efficacy when deployed in the field. While the current iteration was designed for the professional market and is being offered to law enforcement agencies, we plan to enter the commercial market as a product offering to consumers, depending on sufficient financing.

*ABC Training and Certification Program*

The "ABC Training and Certification Program" was developed by our legal advisors and our team of law enforcement professionals. It is a "train the trainer" program that is conducted by our team of law enforcement trainers, where we work with a department's training team during a one-day course that involves a classroom session with a written exam and a range session with live fire activities and live fire qualification. The purpose of the training program is to certify a department's training team and provide the necessary training tools, such as The Alternative® User Manual, Training Slides, Lesson Plan, Written Exam, Steps for Qualification, and Sample Policy. The program focuses on proper use and deployment protocols, including safe handling procedures and proper attachment, developing muscle memory for efficient deployment, and procedures to mitigate any associated risks. Every officer must complete the ABC Training and Certification Program, which is as important as the technology itself, before qualifying to carry The Alternative® on duty, and officers will be required to requalify at minimum on an annual basis while department trainers will be recertified on a bi-annual basis.

We plan to generate revenue from our training program and the initial sale of equipment, i.e., The Alternative® units and holsters. We plan to generate recurring revenue from the bi-annual recertification required for department trainers, replenishment of equipment after it is deployed, ongoing training equipment, and the equipment needed for annual requalification. Our target market includes law enforcement agencies at the local, state, and federal levels, military police, private security agencies, international law enforcement, and security agencies, and potentially the commercial market for consumers in the future.

**Our Product**

The Alternative® is a blunt force impact device that consists of a specialized alloy projectile, which is mounted onto the front of a bright orange docking unit, stored in an easily accessible pouch that fits on a duty belt, and uses an officer's service weapon as its deployment platform. When being deployed, the unit is removed from the holster and attaches to the top of the firearm within seconds.

Once the weapon is fired, the bullet welds inside the projectile becoming one unit, and the new munition is propelled toward the target by the bullet's kinetic energy. The docking unit will then automatically eject from the firearm, returning the weapon to its normal function as it cycles in a new round and is instantly ready for follow up with lethal force, if necessary. This feature allows the officer to remain in control of the situation, as The Alternative® projectile travels downrange at approximately 210 to 225 feet per second (fps), or roughly 20% of the speed of a normal bullet, impacting the targeted individual with non-penetrating energy. Ballistics testing data has determined that The Alternative® is expected to incapacitate an individual, while posing very little risk of death or critical injury.

The Alternative® is compatible with the most used firearms in U.S. police departments, such as the Glock 17, 19, 45, and pre-Gen 5 series of Glock 22 and 23. It is also compatible with the Sig Sauer P320, Smith & Wesson M&P, Taurus TH9, Springfield Echelon and CZ P-10, and the projectile is compatible with 9mm and .40 caliber ammunition. New docking unit molds can be designed and built for most semi-automatic pistols based on an appropriate level of demand.

**Our Mission**

We believe The Alternative® can play a critical role in the concept of a less-lethal community, where innovators work toward the common goal of addressing use of force challenges in modern policing. We believe that the use of less-lethal technologies, such as The Alternative® when applicable, not only has the potential to save lives while protecting officers but can also build trust between law enforcement and the communities that they serve and protect.

Our mission is simple, which is to save lives and protect officers in the line of duty. To do this, we intend to partner with law enforcement agencies throughout the world to equip and train officers with The Alternative® as an efficient and effective option.

**Our Market Opportunity** 

***Professional Market***

We are in the LLA market of the law enforcement industry, although The Alternative® is technically not classified as ammunition by the Bureau of Alcohol Tobacco and Firearms. See "Commercial Market" below. This is a niche market with multiple tools and options available to officers for the deployment of various types of tools designed to temporarily incapacitate, stun, or cause temporary discomfort to a person without penetrating the body. Less-lethal technologies are continuously evolving, and law enforcement agencies are generally open to reviewing data, scheduling demonstrations, or procuring ammunition samples to conduct their own internal testing, which is influencing the growth of the LLA global market.

The LLA global market was estimated at $890 million in 2024 and projected to have grown to around $1.1 billion in 2025, growing at a CAGR of roughly 4.3% to 5.3%. By 2029-2030, the market size is expected to exceed previous estimates of $1.2 billion by 2030, which is now projected to grow to roughly $1.36 billion - $1.43 billion in the same time frame. Looking further, the market is projected to expand significantly to $4.6 billion in 2035 with a CAGR of 16.2% during the forecast period 2025-2035.<sup>1</sup> The common types of weapons in this market are shotguns and launchers deploying multiple types of ammunition, such as rubber bullets, bean bag rounds, polyethylene/plastic bullets, and paintballs, and the end users are law enforcement, military, and security companies. Researchers have formulated several testing methodologies, which help in assessing less-lethal kinetic energy munitions, and the results from these tests are presented to end users to enable the assessment and informed decision-making in the procurement process.

The rubber bullets segment continues to lead the market in 2024.<sup>2</sup> These types of bullets are the most conventional less-lethal projectiles used by most peacekeeping agencies across the globe. The law enforcement end-user segment led the market and accounted for more than 58% share of the global revenue in 2024.<sup>3</sup> Law enforcement agencies are looking for ways to reduce the risk of fatalities during various types of encounters, including with protesters and irritants during crowd control operations around the world.

<sup>1</sup> *Less Lethal Ammunition Market*, By: Abbas Raut, Sejal Akre, Market Research Future,April 2026.

<sup>2</sup> *Id.*

<sup>3</sup> *Id.*

North America dominated the LLA market with approximately 45% of the global share in 2024, and the U.S. is the major contributor to LLA sales in North America,<sup>4</sup> since it exhibits a high defense-spending budget every year, thereby leading to a higher procurement of LLA for its law enforcement and military agencies. Europe witnessed significant growth and accounted for roughly 30% of the global share. Asia Pacific held about 20%, and the Middle East and Africa held about 5% of the global market. The market drivers include increased focus on public safety, growing demand for less-lethal options, rising awareness of human rights, technological innovations in ammunition, and regulatory support for less-lethal solutions. Asia Pacific is expected to witness notable growth over the 2030 forecast period with factors, such as the rise in China's defense spending and the increase of political disputes and civil disorder in parts of India, that are expected to drive the demand for less-lethal ammunition this region. Middle East Asia is expected to witness the fastest CAGR of 7.8% over the 2030 forecast period,<sup>5</sup> owing to a notable rise in crime rates in countries such as South Africa, Kenya, Nigeria, and Papua New Guinea.

The global LLA market is witnessing an increasing trend of organic and inorganic growth through expansion and mergers and acquisitions. Companies are trying to increase their sales through acquisition, investment, and innovation, and expanding capacities to facilitate the respective markets.

On a domestic level, the U.S. target markets include federal, state, and local law enforcement agencies, of which there are over 18,000 agencies, which include almost 700,000 full-time law enforcement officers combined.<sup>6</sup> At the state level, we look to contract with state police and state highway patrol, and at the local level, we aim to contract with municipal, county, tribal, and regional police departments. At the deputy sheriffs' level, the goal is to contract with patrol and correctional facilities. At the federal level, we look to contract with DHS agencies, such as Border Patrol, ICE, and Secret Service; also with DOJ agencies, such as ATF, DEA, FBI, U.S. Marshals, and the Federal Bureau of Prisons; with Department of Interior agencies, such as the Bureau of Land Management, U.S. Park Rangers, and the U.S. Park Police; and finally the Legislative Branch to contract with the U.S. Capitol Police.

We have taken various steps to launch our product in the LLA global market, which include ballistic testing to achieve compliance with industry standards for impact energy, establishing training protocols and deployment guidelines, and receiving product classification from the ATF. The first steps, with regard to ballistics testing, involved R&D to assess the functionality of the device including velocity, precision, and impact energy. The first round of tests was completed in June 2021, and additional tests were conducted throughout 2022. The testing methodologies and results are described in greater detail in the following sections, 'Our Competitive Strengths' and 'Thorough Ballistics Testing of The Alternative®,' and in the Sydor Technologies Report, attached as Exhibit 99.2.

Upon completion of the tests, we submitted a formal request to the ATF for product classification, which the Company received in August 2023 ruling that the product is not a controlled device under the agency's regulatory purview over ammunition, firearms, and destructive devices. This ruling is further discussed in the 'Product Classification' section to follow, which explains how we expect the alleviation of licensing requirements on domestic sales and the removal of manufacturing restrictions to mitigate regulatory obstacles, which could have otherwise impeded our business objectives if the product was classified as ammunition and scheduled to be under the agency's regulatory control.

The test results guided the process by which our team created our training program, established deployment guidelines, safe handling procedures, and optimal range. Our training program was designed by our team of law enforcement professionals and follows best practices in the law enforcement industry with a format and qualification cadence that is similar to other less lethal tools that are commonly used in the current market with regard to training, departments' instructor certifications, and officers' annual requalification.

Once the testing initiatives and training program were completed in Q2 2023, we were prepared to onboard our first pilot program with the Jackson County Sheriff's Office in Texas. Since then, we have continued to exhibit at trade shows and have scheduled live demonstrations throughout the U.S. and Brazil. We have initiated a total of three U.S. pilot programs and have received non-binding letters of intent to purchase from a few departments in Brazil. We have remained steadfast in scheduling demonstrations with interested departments and seek to expand these efforts on a global scale by increasing the number and frequency of demonstrations, attending additional trade shows, joining national, state, and local associations, and engaging sales and distribution partners in international markets.

<sup>4</sup> *Id.*

<sup>5</sup> *Id.*

<sup>6</sup> *FBI; U.S. Bureau of Justice Statistics; Statista 2021.*

In preparation of our global outreach, we expanded our patent protection in 2024 to 16 countries outside of the U.S. and have filed two continuation applications in the U.S. to strengthen and allow for the expansion of our family of patents. In the international markets, we used the PCT Application process, and one of 16 countries is the EPO that includes 39 countries under its umbrella of protection. Now that we have established protection in these additional countries, we can respond to the interest that we have been receiving from these markets. The full list of our patents can be found in the Intellectual Property section to follow.

As with any new law enforcement technology, especially one that is a pain compliance tool, the rate of adoption can be slow due to initial concerns and lack of general knowledge on new products. With wider adoption and demonstrable success in the field, we expect the sales cycle to be shortened. We have experienced positive feedback from department representatives in attendance for each demonstration once officers have a better understanding of use case application and the ease of use surrounding the functionality of the device, however, department concerns, such as being the first to carry, not having enough real-world deployment data, additional training requirements, and in some instances, budgetary or political concerns, have presented material obstacles that we plan to overcome.

In 2024, we significantly enhanced our marketing efforts, improved our training presentation format, and launched special projects to build awareness of our product. This included new video and website content, new email outreach campaigns, new training materials, and video productions of live demonstrations and actual training classes. Our Chief Executive Officer volunteered to be the first human to stand downrange and take a live shot from The Alternative®, which was documented as a professional video production, and as a further human effects study, we commissioned a video of live shots on an organic ballistic torso to demonstrate the safety and viability of our device. In all instances, The Alternative® performed as intended, and as a result of our team's marketing efforts this year, we have significantly enhanced the interest in our product in the U.S. and abroad.

***Commercial Market***

We intend to introduce our flagship product to civilians in the commercial market under the newly trademarked name, The Home Defense™, with the aim of making firearms safer and the goal of reducing gun deaths, specifically those caused by semi-automatic pistols. Whether it is an accidental round fired by a minor in the home or a deployment of lethal force in a self-defense encounter, The Home Defense™ exists to provide a potential alternative to fatal outcomes in these types of incidents.

We are aware that the U.S. makes up the largest global market of personally owned firearms, but it is difficult to know the exact count, however, some estimates from years ago<sup>7</sup> have put the total number of guns in the U.S. higher than the total number of citizens. Based on recent reports, we can see that the last several years during and after the pandemic were record-breaking for firearms sales<sup>8</sup> where Americans purchased approximately 60 million firearms from 2020 to 2022<sup>9</sup> with semi-automatic pistols being the most purchased.

Historically, rifles and shotguns have outsold pistols, but that began to change in the 1990s when a cultural shift saw more gun owners purchase firearms for self-protection<sup>10</sup> rather than for sport or hunting. From 2019 to 2021, U.S. gun manufacturers produced almost double the number of semi-automatic pistols to the amount of rifles, at approximately 15 million compared to approximately 9 million,<sup>11</sup> respectively. During this timeframe, predominantly as a response to events during the pandemic and a desire to protect life and property, if necessary, it is reported that 18% of U.S. households purchased firearms, and these related sales increased the number of armed homes to 46% up from 32% pre-pandemic.<sup>12</sup>

<sup>7</sup> *There are now more guns than people in the United States*, Christopher Ingraham, The Washington Post, October 2015.

<sup>8</sup> *How Many Guns Are Circulating in the U.S.?,* Jennifer Mascia and Chip Brownlee, The Trace, March 2023.

<sup>9</sup> *Americans bought almost 60 million guns during the pandemic*, Daniel De Visé, The Hill, April 2023.

<sup>10</sup> *Fear of Other People Is Now the Primary Motivation for American Gun Ownership, a Landmark Survey Finds*, Kate Masters, The Trace, September 2016.

<sup>11</sup> *The Trace: Gun Production from 1899 to Present.*

<sup>12</sup> *Americans bought almost 60 million guns during the pandemic*, Daniel De Visé, The Hill, April 2023.

The civilian less-lethal and self-defense weapons market represents a rapidly growing commercial opportunity, driven by increasing consumer demand for personal safety solutions amid rising urban safety concerns and crime rates. According to a January 2026 report by Research and Markets, the global market is projected to grow from approximately $4.06 billion in 2026 to $5.3 billion by 2030, reflecting a compound annual growth rate (CAGR) of 6.9%. Growth is being fueled by continued innovation in compact and multi-functional non-lethal devices, expansion of e-commerce distribution channels, and increasing adoption of less-lethal options by both civilians and private security personnel. The report also highlights rising interest in home-defense-oriented products, smart-enabled safety devices, and solutions that reduce the risk of fatal outcomes, underscoring a favorable market environment for products such as The Home Defense™.

Source: *Civilian Less Lethal and Self Defense Weapons Research Report 2026*, Research and Markets, January 2026

Our goal is to leverage this prime market with The Home Defense™ as a compelling tool that seamlessly transitions the consumer's firearm into a less lethal option. The consumer product iteration is approved and we intend to launch The Home Defense™ into the U.S. guns and accessories industry as the latest innovative protective tool for home and self-defense options.

The consumer version is compatible with 9mm ammunition and the same models of firearms as the law enforcement version. In the commercial market, it is recommended that The Home Defense™ unit remain mounted to the firearm while it is safely stored in the home, where it would immediately be ready as a less-lethal option for home-defense. The recommendation of keeping the attachment mounted may also serve to make the gun safer, as mentioned above, for the possible prevention of unintentional gun deaths, which the U.S. sees on average approximately 500 per year.<sup>13</sup>

Unintentional gun deaths include a wide range of incidents, such as accidental discharge when cleaning or reloading, hunting mistakes, unintentional victims of a shootout and stray bullets, but perhaps the most preventable incidents are those involving children or young people observing or playing with a firearm in the house while unsupervised. A study looked at unintentional gun deaths in the U.S. from 2005 to 2015,<sup>14</sup> and of the estimated 430 annual fatalities during this period, 28.3% of the incidents included playing with the gun, and 17.2% included thinking the gun was unloaded. In these incidents, the rates were highest in children and young adults, ages 10 to 29.

We have already received high interest from consumers in our product, as well as from potential distribution partners in the U.S. and abroad. To do this, we plan to start by developing, testing, and producing a consumer version of our product and engage experienced professionals with successful track records of bringing products to market in the home-defense and self-defense sectors. We believe that the Commercial Market will have less obstacles to entry, and therefore could result in a shorter sales cycle, than the Professional Market. Based on the size of the U.S. consumer market for semi-automatic pistols, compared to the number of officers in the U.S. law enforcement market, the Commercial Market could potentially represent a much larger opportunity for our product if there is a high demand by consumers.

***Product Classification***

In August 2023, we received a response from the ATF's Firearm Technology Industry Services Branch ("FTISB") for our request for a product classification of The Alternative®. The ATF refers to the Bureau of Alcohol, Tobacco, Firearms and Explosives, which is the federal agency responsible for investigating and preventing federal offenses involving the unlawful use, manufacture, and possession of firearms and explosives. The ATF also regulates, via licensing, the sale, possession, and transportation of firearms, ammunition, and explosives in interstate commerce. The FTISB is a branch of the ATF that is responsible for classifying firearms and ammunition, which concluded that The Alternative® does not constitute ammunition, as defined by the Gun Control Act of 1968 ("GCA"), is not a firearm, as defined by the GCA, and not a destructive device as defined by the National Firearms Act of 1934 ("NFA") and is therefore not a listed product under the GCA or NFA. The conclusion reached by the FTISB, may remove critical restrictions related to various initiatives, such as manufacturing, importing/exporting, selling, and distribution, which we believe will have a significant positive impact for our growth efforts in the professional and commercial markets. For example, if The Alternative® would have been classified as a listed product, we would not be able to import components from certain countries designated with a weapons embargo. If The Alternative® was a listed product, we would also be required to carry specific ammunition licensing for the sale of our product in the professional and commercial markets, and only licensed distributors would be able to resell our product. While this ATF ruling allows us to sell the product in interstate commerce without licensing under the GCA or NFA, other countries may consider the product to be a controlled device by their regulatory bodies, where we may be subject to certain licensing requirements in those foreign markets to sell the product. A copy of the "ATF Final Opinion on The Alternative® Product Classification" is attached as an exhibit to this Annual Report*.*

 

In June 2025, the Company received a response from the U.S. Department of Commerce's Bureau of Industry and Security ("BIS") regarding its May 2025 request for a commodity classification for The Alternative®. BIS determined that the product is classified as EAR99 and is eligible for export to most end users under No License Required ("NLR") to most destinations, except for certain countries and restricted end users where a license is required. This classification is expected to materially reduce the regulatory burden associated with export licensing and support the Company's international expansion by streamlining export processes and minimizing shipment-by-shipment licensing requirements.

<sup>13</sup> *How Often Are Guns Involved in Accidental Deaths?,* Jennifer Mascia, The Trace, December 2022.

<sup>14</sup> *Unintentional firearm deaths in the United States 2005–2015, Sara J. Solnick and David Hemenway, Injury Epidemiology Journal, 2019.*

**Our Competitive Strengths**

The Alternative® is a unique less lethal tool that is currently available to officers in the marketplace. We believe that our technology fills a critical safety gap in situations where officers encounter non-compliant subjects, who are presenting a potential lethal threat with a weapon other than a gun. Under current protocols with traditional options, officers may identify these situations as a less-lethal encounter and proceed to call for back-up to arrive with an appropriate tool, such as the beanbag shotgun or 40mm less-lethal launchers, which deploy impact rounds in an effort to change the subject's behavior and gain compliance.

The "safety gap" referenced above relates to the time that it takes for an officer to arrive and get into position before deploying a less-lethal tool, commonly referred to by law enforcement professionals as a "planned event." Since less-lethal launchers or rifles are generally carried in the officer's vehicle or by a designated less-lethal task group, it is not an efficient option for situations where every moment is critical and the matter of life and death hangs in the balance. We acknowledge that less-lethal launchers are essential tools in these types of situations, but they are often minutes away when seconds count.

We also acknowledge that Axon Enterprise, Inc. ("Axon") (formerly Taser, Inc. ("Taser")), which manufactures one of the most well-known and successful less-lethal products on the market, the Taser conducted energy weapon, has been a major catalyst in establishing and growing the global market for less-lethal products. We believe that Taser, like less-lethal launchers, is an essential tool in policing for the purpose of safely affecting arrests. However, we do not regard Taser or other types of restraint devices as our direct competitors, due to the difference in use-case applications for various threat levels.

For example, The Alternative® is an intermediate force option for situations that involve a non-firearm weapon, which has escalated to a potential lethal threat, while Taser is widely used when dealing with non-compliant subjects who are resisting arrest and are combative, but who are generally unarmed. In cases where officers have lethal cover and time to put a plan in place, Taser is often deployed as an option to gain compliance, but movement, clothing, environment, and weather can alter effectiveness. This is a factor that departments must consider when writing policy for these types of critical incidents, and it is one of the main reasons why they opt for impact weapons to effectively address an elevated threat level. In contrast to those options that need to be called to the scene, such as less-lethal launchers, The Alternative® provides a tool that is readily available to every officer by remaining holstered on the duty belt and ready to deploy within seconds rather than minutes, and as evidenced by a comparative ballistics analysis that was conducted by NTS, The Alternative® kinetic impact energy is comparable to that of the 40mm impact rounds. We believe that this "availability" and efficiency to deploy, will save lives while protecting officers, as our solution does not require the officer to transition to a separate device.

Once The Alternative® is fired by the officer, it instantly detaches from the firearm and a new round is cycled into the chamber of the service weapon, allowing the officer to immediately retain lethal force for follow up shots if necessary to stop the threat. Our goal is not to replace any current tools, but instead, we hope to provide an additional critical option that saves lives and protects officers by allowing them to respond efficiently with appropriate force and remain in control of the situation.

Our technology has undergone extensive ballistics testing, including being the first unit in June 2021 to go through the newly published standard test method ASTM E3276, in addition to Penetration Assessment of Less Lethal Munitions (PALLM) and NIJ 0101.06 (Modified) Body Armor to assess intervening materials. All tests were conducted by NTS, one of the nation's most prominent NIJ-accredited ballistic labs. In 2022, we began working with an independent ballistics' science firm, Sydor Technologies, to assess the level of testing performed by NTS and advise on additional tests needed to prepare The Alternative® for introduction to the market.

Through the work by Sydor, it was determined that we needed to modify the dimensions of our projectile to decrease velocity so that its impact energy aligns within the range of industry accepted levels of risk for blunt trauma. This modification resulted in reducing velocity by up to 70 feet per second (ft/s), from an average velocity of 275 to 280 ft/s down to an average velocity of 210 to 220 ft/s for the 9mm projectile and 220 to 235 ft/s for the .40 caliber projectile. All velocity testing was conducted by NTS in Belcamp, MD.

This modification to the projectile design caused delays in getting the product to market and incurred significant cost, however, the changes were critical, and our management team did what was necessary to ensure that The Alternative® would be safe and effective for use in the field. The additional tests conducted by NTS under Sydor's observation included another ASTM-E3276 to assess the precision, velocity, and impact energy of the newly modified projectile, in which it performed extremely well in all categories. The new projectiles were also analyzed for injury assessment that was conducted by Dr. Cynthia Bir at Wayne State University Biomedical Engineering Research facilities. The tests at Wayne State included an f-BTTR surrogate that was previously validated to respond similarly to an average size male and was able to measure the maximum viscous criterion (VCmax), a blunt trauma injury metric and correlate it with a percent risk of certain injuries. As represented in the velocity and risk of injury tables below, it is clear that the modifications to the projectile were successful based on the lower velocities and low risk of severe blunt trauma injury. Based on the results of the ballistics data, we were able to develop its deployment protocols and establish primary, secondary, and restricted target areas of the human body.

![](partii_001.jpg)

Velocity testing was conducted by NTS and the Velocity Tables above were prepared by Sydor Technologies using the velocity measurements at muzzle and at 1 meter from the target. The drag curve was then used to calculate the velocities in 5 ft increments from muzzle to 35 ft.

![](partii_002.jpg)

VCmax measurements were completed at Wayne State University, and the risk of injury percentages were prepared by Sydor Technologies. The target areas of the Human Body were prepared by Alternative Ballistics Corporation, based on the cumulative results of all ballistics tests conducted and incorporated therein into the Company's training program.

A copy of the Sydor Ballistics Report is attached as an exhibit to this Annual Report.

**Our Historical Growth and Growth Strategy**

We are pursuing a global growth strategy focused on domestic and international professional markets within the law enforcement and security sectors. Upon achieving sufficient capitalization, we intend to introduce a consumer version for broader commercial markets worldwide. To market The Alternative®, we employ a multi-channel approach that includes direct sales efforts, participation in trade shows, live demonstrations, and targeted email and digital marketing campaigns. We also leverage the professional networks of our law enforcement team and advisory board and engaged a government relations firm to enhance awareness and develop relationships at the federal, state, and local levels, as well as with national associations and federal agencies. We have established relationships with numerous law enforcement agencies across the United States that have expressed strong interest in The Alternative® and believe that adoption timelines may accelerate as larger departments deploy the product and establish operational precedent through successful domestic and international use cases.

In March 2025, we appointed a Chief Revenue Officer for International Markets to lead its global expansion initiatives. During 2025, we entered into agreements with approximately 25 distribution partners representing more than 30 countries. We implemented a structured onboarding program that included obtaining a commodity classification from the U.S. Department of Commerce's Bureau of Industry and Security ("BIS"), which classified the product as EAR99, generally allowing exports under No License Required ("NLR"), as well as establishing logistics capabilities to support distributor fulfillment and conducting product demonstrations. In 2025, we, together with its distribution partners, conducted product demonstrations for end users in Morocco, Malaysia, Australia, Abu Dhabi, Brazil, Japan, and the Netherlands.

Domestically, we focused on opportunities in South Florida, culminating in "train-the-trainer" programs conducted with officers from Doral Police Department, Hialeah Police Department, Miramar Police Department, North Miami Police Department, Miccosukee Police Department, Bal Harbour Police Department, Miami-Dade Schools Police Department, and Miami Beach Police Department. Despite positive feedback from demonstrations and training evaluations, adoption by U.S. law enforcement agencies has progressed slowly due to factors including institutional resistance to change, operational considerations, and logistical challenges associated with implementing a novel use-of-force technology. Our primary objective remains to partner with early adopters in the United States and internationally to establish a proven track record of successful field deployments, which we believe will facilitate broader market adoption and transition us into a growth stage.

Our commercialization strategy consists of two phases:

● **Phase 1** focuses on monetization initiatives, including capital raising activities and the introduction of our products into domestic and international professional markets.

● **Phase 2** focuses on continued expansion within professional markets and the anticipated launch of a consumer version in the commercial market.

During Phase 1, we intend to pursue contracts at the local level with private security firms and municipal, county, tribal, and regional law enforcement agencies, including sheriffs' departments across patrol, corrections, and school resource functions. At the state level, we are targeting state police and highway patrol agencies. At the federal level, we are pursuing opportunities with agencies within the Department of Homeland Security (including U.S. Customs and Border Protection, Immigration and Customs Enforcement, and the U.S. Secret Service), the Department of Justice (including the Bureau of Alcohol, Tobacco, Firearms and Explosives, Drug Enforcement Administration, Federal Bureau of Investigation Police, U.S. Marshals Service, and Federal Bureau of Prisons), the Department of the Interior (including the Bureau of Land Management, U.S. Park Rangers, and U.S. Park Police), and the legislative branch (including the U.S. Capitol Police). Phase 1 also includes international expansion efforts supported by relationships developed through U.S. Commercial Service representatives.

In Phase 2, we intend to expand further within domestic and international professional markets and to launch our consumer-focused product, The Home Defense™, for the commercial market.

As a differentiated less-lethal solution, the Company believes The Alternative® addresses a critical gap in existing use-of-force options available to law enforcement personnel. The Company believes the product has the potential to enhance officer safety, preserve life, and reduce the incidence and impact of firearm-related fatalities. While initial ballistic testing and expressed interest from domestic and international agencies are encouraging, the Company cannot predict the extent or timing of market acceptance, purchase orders, or future sales. See "Risk Factors."

**Thorough Ballistics Testing of The Alternative®**

We have had The Alternative® evaluated through extensive ballistics testing conducted by third-party, independent ballistics laboratories, including National Technical Systems ("NTS") at its Chesapeake testing facility in Belcamp, Maryland (which has an accredited firing range approved by the National Institute of Justice ("NIJ") and Wayne State University in Detroit, Michigan.

We also retained one of the most respected independent data assessment and measurement companies in the United States, Sydor Technologies based in Fairport, New York, to review and analyze the data collected by NTS and Wayne State University.

Our goal in this rigorous third-party testing program was to confirm with solid empirical data that The Alternative® is truly a less-lethal option for police officers to use and, in particular, when deployed at close range (defined as zero to 35 feet) in an urgent tactical situation, The Alternative® will pose only modest but acceptable risk of serious bodily injury to a subject who has to be subdued and arrested.

Such detailed ballistics testing has thus measured and verified the precision and accuracy of the projectile when aimed at a subject within certain typical tactical distances from the officer, the velocity of the projectile at those distances from the officer, the delivered energy upon impact of the projectile, and the likelihood of the projectile's penetration of the subject's skin and injury to any vital organs within the subject's body.

Sydor Technologies has reviewed and assessed a good deal of our ballistics testing data and prepared a report entitled "Analysis of Results from Testing at Wayne State University." Full copies of our ballistics test reports are attached as an exhibit to this Annual Report.

**Objectives, Strategies, and Related Business Risks**

***Products and Services***

● <u>Future Trends</u>: Establish proof of concept and demonstrate the value of our technology as a viable less-lethal application for the law enforcement industry.

● <u>Expectations</u>: We expect that our technology can be recognized as a unique solution that fills a critical safety gap and provides an effective option for officers that has not been possible until now.

● <u>Objectives</u>: Our goal is to establish proof of concept via pilot programs with several U.S. police departments and to generate revenue through full-paying contracts in the U.S. and abroad.

● <u>Strategies</u>: Building infrastructure and workflows in our operations to create repeatable practices and provide scalability for growth.

***Marketing and Revenue***

● <u>Future Trends</u>: Work with partners to build brand awareness domestically and internationally.

● <u>Expectations</u>: Continue to expand awareness and a strong following through multiple marketing campaigns, including through our law enforcement team's professional credibility and expansive network, at the political level through our government relations firm, at the customer level through our media partners, at the global level through our international affiliates and distributors, and at the general public level through our social media campaigns, all of which may translate to revenue and gaining a foothold in the industry.

● <u>Objectives</u>: Establish best in class marketing team to articulate our mission of saving lives and illustrate our vision for safer communities through law enforcement's adoption of The Alternative®.

● <u>Strategies</u>: Leverage our law enforcement team's professional credibility and expansive network, our government relations firm for awareness at the congressional level, our media partners to build interest at the customer level (departments and agencies), our international affiliates and distributors for global expansion, and social media campaigns to build awareness with the general public.

 ****

***Research and Development***

● <u>Future Trends</u>: Continue investing in R&D to expand firearm compatibility and a launch of the consumer model for the commercial market.

● <u>Expectations</u>: Strengthen our training program, expand our law enforcement team, and establish demand based on successful training and deployments.

● <u>Objectives</u>: Utilize ongoing R&D initiatives to maximize product efficacy and safety.

● <u>Strategies</u>: Continue working with our ballistics teams at NTS, Sydor Technologies, and Wayne State University for ongoing tests and data analysis on new models.

***Technology***

● <u>Future Trends</u>: Protect our current IP and expand our IP portfolio through additional U.S. patents and international protection; ongoing product testing, and implementation of automated assembly process.

● <u>Expectations</u>: As we become known in the market and potentially expand globally, we will continue to conduct thorough testing, develop new designs for firearm models, and develop processes to enhance scalability.

● <u>Objectives</u>: Be prepared to aggressively prosecute and enforce our IP protection, and for scalability, we will eventually need to implement an automated assembly process.

● <u>Strategies</u>: Strengthen and expand our IP portfolio on a domestic and international scale, including the prosecution of new patents and the enforcement and litigation of our patents, should the need arise; automated assembly to yield an increase in productivity resulting in 20 units per minute on a sustained basis.

***Business Expansion or Restructuring***

● <u>Future Trends</u>: Create models for additional types of firearms in the law enforcement industry and models for the consumer market; ATF's FITSB report (see "Our Business—Commercial Market,") allows us to operate with limited manufacturing or selling/distribution restrictions; as we grow internationally, we may look to establish manufacturing in-country in given regions, however, product classifications in other countries may differ from the ATF's FITSB product classification ruling. See "Risk Factors."

● <u>Expectations</u>: New models of firearms may gain popularity and the consumer market is significantly larger than the law enforcement segment of the professional market; we may be able to sell a consumer version as eCommerce, through distributors, and/or through general retail/sporting goods stores. If growth and margins can be optimized by a local presence, we would consider establishing operations in-country where there is high demand and opportunity for expansion.

● <u>Objectives</u>: Optimize all manufacturing and sales initiatives; with additional capital, we can begin development on docking molds for firearms that are gaining popularity in the law enforcement industry; begin plans to launch the consumer version in the commercial market; and look for ways to optimize growth and margins with regard to production and order fulfillment.

● <u>Strategies</u>: Work with design engineering teams to stay current on popular firearm models and establish cost effective methods to build new molds, and maximize production, fulfillment, and shipping strategies domestically and internationally.

 ****

***Employment or Compensation***

● <u>Future Trends</u>: We intend to scale relative to revenue growth, which we expect to result in the strategic hiring of key personnel in the areas of sales, marketing, operations, IT, accounting, legal, administration, and regional law enforcement representatives.

● <u>Expectations</u>: The capacity to sustain key employees, as well as diversify and expand personnel, should result in our ability to maintain a full-time staff.

● <u>Objectives</u>: Execute on growth initiatives in order to attract top tier talent to enhance our goals and objectives; this includes expanding our advisory board and independent board of directors with high level professionals with entrepreneurial, law enforcement, political, and business backgrounds.

● <u>Strategies</u>: Align employment and compensation objectives to complement our vision and execution of our growth initiatives and to enhance our public appearance through strategic hiring.

**Manufacturing and Production**

We are currently able to manufacture the projectiles both domestically and internationally. The docking units are currently manufactured domestically. While there can be no guarantees regarding product costs and/or suppliers, our team continues to explore contingency options, should any disruptions occur with our current suppliers. We outsource via contract manufacturing ("CM") to multiple vendors so that we limit our reliance on a sole source.

We have multiple suppliers for each component of our platform, which includes the alloy projectile, the plastic docking unit, and the custom holster. Once the projectiles and docking units are produced, we have an in-house assembly and shipping operation. Our goal is to have a significant volume of product ready to supply departments with necessary quantities in a timely manner, however, the volatility of the shipping industry, including freight and fuel costs, backlog, and delays may adversely impact our manufacturing, production, and supply operations.

**Competition**

Based on the LLA market in 2022 with a size of $850 million,<sup>15</sup> some of the leading competitors in the space include, but are not limited to Combined Systems, Inc.; Amtech Less Lethal Systems; Nonlethal Technologies, Inc.; Wrap Technologies, Inc.; and Axon. Unlike us, these companies are not start-up companies and have significant operations and historical data upon which to evaluate their businesses.

All aforementioned companies produce standalone devices. In contrast, The Alternative® attaches to the firearm (an already held device on an officer's duty belt), giving an operator the flexibility of a multi-purpose tool. We believe that this key differentiator allows us to not compete for market share but rather carve out a new segment of the market for our next generation technology.

<sup>15</sup> Overview, Sejar Akre, Market Research Future, July 2023.

**Intellectual Property**

***Patents***

The following table gives details of our existing patents. In September 2020, we acquired the LP. Upon completion of the acquisition, the first four patents in the table below were transferred and assigned to us as the new owner of all rights to the intellectual property. In December 2021, we filed a new utility patent that was issued in January 2023 as patent number 11566876, which has since been directly filed in several other foreign markets as listed below, including a PCT Application that was filed in December 2022. Also in December 2022, we filed a continuation application on our latest U.S. patent, which issued in January 2023, to start a new family of patents. When the PCT filing window opened in June 2024, we filed in several new countries as listed in the table below.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Patent <br> Application No.** | **Patent No.** | **Patent Name** | **Date Filed** | **Date Issued** | **Expiration**<br> **Date** | **Location** |
| **11/353875** | 7526999 | Less-Lethal Force Device | 2/13/2006 | 5/5/2009 | 10/21/2040 | USPTO |
| **14/183455** | 9612074 | Less-Lethal Force Device-Impact Ratio | 2/18/2014 | 4/4/2017 | 7/8/2035 | USPTO |
| **14/598555 (continuation of 14/183455)** | 9823033 | Less-Lethal Force Device-Impact Ratio | 1/16/2015 | 11/21/2017 | 2/18/2034 | USPTO |
| **15/386281** | 10295291 | Less-Lethal Force Device | 12/12/2016 | 5/21/2019 | 12/30/2035 | USPTO |
| **17/644060** | 11566876 | Bullet Capturing Ballistic Slugs | 12/13/2021 | 1/31/2023 | 12/31/2041 | USPTO |
| **BR 10 2022 008832 2** | 102022008832-2 | Bullet Capturing Ballistic Slugs | 5/13/2022 | 1/7/2025 | 2/6/2042 | Brazil |
| **1-2022-02498** | Pending | Bullet Capturing Slugs | 5/13/2022 | Pending | N/A | Vietnam |
| **20220103403** | AR127939B1 | Bullet Capturing Slugs | 12/13/2022 | 11/28/2024 | 12/13/2042 | Argentina |
| **2022-000260** | A060137 | Bullet Capturing Slugs | 12/13/2022 | 10/24/2024 | 10/24/2044 | Venezuela |
| **22107593** | Pending | Bullet Capturing Slugs | 12/13/2022 | Pending | N/A | Paraguay |
| **PCT/US2022/81356** | N/A | International Patent Application for Bullet Capturing Slugs | 12/12/2022 | 2/1/2023 (International Artwork Search Complete) | N/A | USPTO/International Bureau |
| **18/146953** | 11835322 | Continuation Patent Application | 12/27/2022 | 12/5/2023 | 12/13/2041 | USPTO |
| **18/499714** | 12188750 | Continuation Patent Application | 11/1/2023 | 1/7/2025 | 12/13/2041 | USPTO |
| **18/977428** | Pending | Continuation Patent Application | 12/11/2024 | Pending | N/A | USPTO |
| **A50485/2024** | Pending | Bullet Capturing Slugs | 6/13/2024 | Pending | N/A | Austria |
| **3240925** | 3240925 | Bullet Capturing Slugs | 6/12/2024 | 10/7/2025 | 12/12/2042 | Canada |
| **313532** | Pending | Bullet Capturing Slugs | 6/13/2024 | Pending | N/A | Israel |
| **MX/a/2024/007289** | Pending | Bullet Capturing Slugs | 6/13/2024 | Pending | N/A | Mexico |
| **95022-01** | Pending | Bullet Capturing Slugs | 6/13/2024 | Pending | N/A | Panama |
| **1120243434** | Pending | Bullet Capturing Slugs | 6/8/2024 | Pending | N/A | Saudi Arabia |
| **202280091539.5** | Pending | Bullet Capturing Slugs | 8/12/2024 | Pending | N/A | China |
| **2022413959** | 2022413959 | Bullet Capturing Slugs | 7/12/2024 | 11/27/2025 | 12/12/2042 | Australia |
| **NC2024/0009084** | Pending | Bullet Capturing Slugs | 7/9/2024 | Pending | N/A | Colombia |
| **22908593.1** | Pending | Bullet Capturing Slugs | 7/11/2024 | Pending | N/A | Europe |
| **2024/05374** | 2024/05374 | Bullet Capturing Slugs | 7/10/2024 | 9/25/2024 | 12/12/2042 | South Africa |

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***Trademarks***

The following table gives details of our existing trademarks.

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| | | | | |
|:---|:---|:---|:---|:---|
| **Matter Number** | **Title** | **Serial No.** | **Registration No.** | **G & S** |
| **534-00003** | THE ALTERNATIVE | 77410543 | 3519634 | Less-lethal projectile, namely, a rounded metal block encapsulated in rubber, discharged from a pistol to temporarily incapacitate a person |
| **534-00004** | ![](partii_003.jpg)<br>ALTERNATIVE BALLISTICS LOGO (prior version) | 85667538 | 4712832 | Less-lethal projectile discharged from a pistol or other firearm |
| **534-00005** | ALTERNATIVE BALLISTICS LOGO 2<br> ![](partii_004.jpg) | 90411439 | Pending | Amended 4/8/2022 to: Firearm attachments having a mount for attaching bullet capturing projectiles and bullet capturing projectiles, sold as a unit or individually (Originally filed as: Weaponry, namely, less-lethal projectile discharged from a pistol or other firearm) |
| **534-00006** | THE ALTERNATIVE | 97/352515 | Pending | Firearm attachments having a mount for attaching bullet capturing projectiles and bullet capturing projectiles, sold as a unit or individually |
| **534-00007** | ALTERNATIVE BALLISTICS | 97/352517 | Pending | Firearm attachments having a mount for attaching bullet capturing projectiles and bullet capturing projectiles, sold as a unit or individually |
| **534-00008** | ALTERNATIVE BALLISTICS LOGO B&W | 97/352524 | Pending | Firearm attachments having a mount for attaching bullet capturing projectiles and bullet capturing projectiles, sold as a unit or individually |
| **534-00011 <br> (Madrid System\WIPO)** | THE ALTERNATIVE | 1662198 | 1662198 | Firearm attachments having a mount for bullet capturing projectiles and bullet capturing projectiles, sold as a unit |
| **534-00011<br> Brazil** | THE ALTERNATIVE | 501662198 | 501662198 | Firearm attachments having a mount for bullet capturing projectiles and bullet capturing projectiles, sold as a unit |

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| | | | |
|:---|:---|:---|:---|
| **534-00011 Vietnam** | THE ALTERNATIVE | 1662198 | Firearm attachments having a mount for bullet capturing projectiles and bullet capturing projectiles, sold as a unit |
| **534-00012<br> (Madrid System\WIPO)** | ALTERNATIVE BALLISTICS | 1662593 | Firearm attachments having a mount for bullet capturing projectiles and bullet capturing projectiles, sold as a unit |
| **534-00012<br> Brazil** | ALTERNATIVE BALLISTICS | 501662593 | Firearm attachments having a mount for bullet capturing projectiles and bullet capturing projectiles, sold as a unit |
| **534-00012 Vietnam** | ALTERNATIVE BALLISTICS | 1662593 | Firearm attachments having a mount for bullet capturing projectiles and bullet capturing projectiles, sold as a unit |
| **534-00013 (Madrid System\WIPO)** | ALTERNATIVE BALLISTICS LOGO B&W | 1662596 | Firearm attachments having a mount for bullet capturing projectiles and bullet capturing projectiles, sold as a unit |
| **534-00013 <br> Brazil** | ALTERNATIVE BALLISTICS LOGO B&W | 501662596 | Firearm attachments having a mount for bullet capturing projectiles and bullet capturing projectiles, sold as a unit |
| **534-00013 Vietnam** | ALTERNATIVE BALLISTICS LOGO B&W | 1662596 | Firearm attachments having a mount for bullet capturing projectiles and bullet capturing projectiles, sold as a unit |
| **534-00035** | THE HD | 99097386 | Firearm attachments, namely, mounts for attaching a bullet capture devise to capture a bullet in a less-lethal spherical projectile; Less-lethal projectiles, namely, a bullet capturing metal sphere that uses the kinetic energy of a firearm to temporarily incapacitate a target. |
| **534-00036** | THE HOME DEFENSE | 99097408 | Firearm attachments, namely, mounts for attaching a bullet capture devise to capture a bullet in a less-lethal spherical projectile; Less-lethal projectiles, namely, a bullet capturing metal sphere that uses the kinetic energy of a firearm to temporarily incapacitate a target. |

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**Human Capital**

As of the date of this Annual Report, we have three full-time employees and one part-time employee. None of our employees are members of a labor union or covered by a collective bargaining agreement.

**Properties**

We currently do not own any real property. We lease office space at 5940 S. Rainbow Blvd, Las Vegas, Nevada 89118 for $2,152 per month for a term of one year, expiring on July 31, 2026.

**Seasonality**

We do not experience seasonal variations in our quarterly operating results and capital requirements.

**Legal Proceedings**

Except for the following, we are not party to any legal proceedings the resolution of which we believe would have a material adverse effect on our business, prospects, financial condition, liquidity, or results of operation. However, we may from time to time after the date of this Annual Report become subject to claims and litigation arising in the ordinary course of business. One or more unfavorable outcomes in any claim or litigation against us could have a material adverse effect for the period in which such claim or litigation is resolved. In addition, regardless of their merits or their ultimate outcomes, such matters are costly, divert management's attention, and may materially adversely affect our reputation, even if resolved in our favor.

On November 20, 2025, the Company received a Complaint for Breach of Lease and Money Damages from the landlord of the Company's San Diego office suite for collection of rent and other expenses for an amount of "no less" than $50,000. Counsel has been engaged to represent the Company in this matter and based on initial conversations with plaintiff's counsel the Company anticipates to resolve this matter and settle out of court.

**Risk Factors**

*Investing in our securities involves risks. In addition to the other information contained in this Annual Report, you should carefully consider the following risks before deciding to purchase our securities. The occurrence of any of the following risks might cause you to lose all or a part of your investment. Some statements in this Annual Report, including statements in the following risk factors, constitute forward-looking statements. Please refer to "Cautionary Statement Regarding Forward-Looking Statements" for more information regarding forward-looking statements.*

Below is a summary of material risks, uncertainties and other factors that could have a material effect on the Company and its operations, these risks include, but are not limited to the following:

● We are an early-stage start-up with no operating history, and we may never become profitable.

● We have a limited operating history on which you can evaluate our business;

● Our independent audit firm has expressed in its report to our audited financial statements a substantial doubt about our ability to continue as a going concern;

● We have a history of operating losses and we cannot guarantee that we will be able to achieve or sustain profitability;

● We expect to require additional financing in the future to continue our development. If we do not obtain such additional financing, our business prospects, financial condition, and results of operations could be adversely affected;

● If we are unable to successfully implement our business plan for the sale of The Alternative®, our potential revenue growth could be slower than we expect;

● We are and continue to be a "controlled company" because our Chief Executive Officer beneficially owns more than 50% of our outstanding shares of voting stock;

● We have only developed The Alternative® for certain firearm models;

● We are dependent on our relationships with key source suppliers for our business;

● We rely on a limited number of third parties for shipping, transportation, logistics, marketing and sales of our products and components. A loss of any of such third-party relationships would have a material adverse effect on our operating results;

● If we deliver products with defects, we may be subject to product recalls or negative publicity, our credibility may be harmed, market acceptance of our products may decline, and we may be exposed to liability;

● Lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that we may develop;

● Our business depends on maintaining and strengthening our brand and generating and maintaining demand for our products;

● Our products and/or services may not gain market acceptance;

● Our sales cycles can be long and unpredictable, and our sales efforts require considerable time and expense;

● Due to our limited resources and access to capital, we must prioritize development of certain product candidates over other potential candidates. These decisions may prove to have been wrong and may adversely affect our revenues;

● The market for LLA is in a state of rapid technological change which could have a material adverse impact on our business, financial condition, and results of operations;

● Growth or expansion of sales of our product to schools, law enforcement, and other governmental or quasi-governmental entities may require expenditure of resources and lengthen our sale cycle;

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

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

● We are exposed to operating hazards and uninsured risks that could adversely impact our operating results and financial condition;

● If we are unable to protect our intellectual property, we may lose a competitive advantage or incur substantial litigation costs to protect our rights;

● We have not paid dividends in the past and do not expect to pay dividends in the foreseeable future.

**<u>Risks Related to Our Business</u>**

***We have a limited operating history on which you can evaluate our business****.*

We have a limited operating history on which you can evaluate our business. Although our corporate entity has existed since 2020, we have only produced minimal revenue. We only officially launched our "pilot program" in 2023. As a result, our business is subject to many of the problems, expenses, delays, and risks inherent in the development of a relatively new business and the integration of key personnel and infrastructure.

***Our independent audit firm has expressed in its report to our audited financial statements a substantial doubt about our ability to continue as a going concern.***

We have not yet begun to generate material revenues from our operations to fund our activities and are therefore dependent upon external sources for financing our operations. There is a risk that we will be unable to obtain necessary financing to continue our operations on terms acceptable to us or at all. As a result, our independent audit firm has expressed in its auditors' report on the financial statements a substantial doubt regarding our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of the uncertainty regarding our ability to continue as a going concern. This going concern opinion could materially limit our ability to raise additional funds through the issuance of equity or debt securities or otherwise. Future reports on our financial statements may include an explanatory paragraph with respect to our ability to continue as a going concern. If we cannot continue as a going concern, our shareholders may lose their entire investment.

 ****

***We have a history of operating losses and we cannot guarantee that we will be able to achieve or sustain profitability.***

We have recorded a net loss in all reporting periods since our inception through the date of this Annual Report. Our net loss for the years ended December 31, 2025, 2024, and 2023 was $41,053,717, $15,323,704, and $36,600,438, respectively. There can be no assurance that we will not experience net losses in the future and there can be no assurance of ever achieving profitability.

***We expect to require additional financing in the future to continue our development. If we do not obtain such additional financing, our business prospects, financial condition, and results of operations could be adversely affected****.*

We expect to require additional financing in the future to continue our development. There can be no assurance that such financing will be available at all or on favorable terms. Failure to achieve revenue may accelerate our need to seek such additional financing, which could result in delay of our development and sale of our products. Subsequent financing may dilute the ownership interest of our stockholders at the time of the financing and may dilute the value of their stock.

***If we are unable to successfully implement our business plan for the sale of The Alternative®, our potential revenue growth could be slower than we expect.***

The Alternative® is a new less lethal solution and it is our flagship product and its long-term adoption by the U.S. law enforcement industry, and by potential other markets including government, military, private security, and international markets, remains unknown. Among other things, production delays, excessive costs, performance failures, new legislation or regulation, competition, or negative publicity could delay or prevent its acceptance in the market and generation of revenue. In particular, negative publicity could harm our reputation, which could in turn prohibit us from marketing or otherwise commercializing The Alternative®. In addition, we have increased and may further increase our operating expenses in order to fund increases in our manufacturing, distribution, and sales and marketing efforts and increase our administrative resources in anticipation of future growth. To the extent that increases in such expenses precede or are not subsequently followed by revenues, our business, operating results, and financial condition may be materially adversely affected.

***We may not be able to effectively manage our growth****.*

As we grow our business, a lack of demand for our products, competition, a decrease in the growth rate of our overall market, failure to develop and successfully market our products, or the maturation of our business or market could harm our business. We expect to make significant investments in additional R&D and sales and marketing, expand our operations and infrastructure, design and develop or acquire new products, and enhance our existing products. If our sales do not increase at a sufficient rate to offset these increases in our operating expenses, our profitability may decline in future periods.

Since inception, our operations have expanded rapidly and the scope and complexity of our business have increased substantially. We have only a limited history operating our business at its current scale. Key members of our management team do not have substantial tenure working together. Consequently, if our operations continue to grow at a rapid pace, we may experience difficulties in managing this growth and building the appropriate processes and controls. Continued growth may increase the strain on our resources, and we could experience operating difficulties, including difficulties in sourcing, logistics, recruiting, maintaining internal controls, marketing, designing innovative products, and meeting customer needs. If we do not adapt to meet these evolving challenges, the strength of our brand may erode, the quality of our products may suffer, we may not be able to deliver products on a timely basis to our customers, and our corporate culture may be harmed.

***We are and continue to be a "controlled company" because our Chief Executive Officer beneficially owns more than 50% of our outstanding shares of voting stock.***

Steven Luna, our Chief Executive Officer, currently beneficially owns approximately 61.4% of our common stock by way of his ownership of 400,000 shares of our Series A Preferred Stock, which has 100 to one voting rights with the common stock. Accordingly, the Company is a "controlled company" meaning that more than 50% of our voting power is held by a single person, entity, or group.

Mr. Luna, as the controlling shareholder, can decide on all matters requiring shareholder approval or matters which are required to be approved by shareholders under our Bylaws by virtue of his controlling ownership of our voting stock, including the election of directors, amendment of our charter documents, and approval or disapproval of major corporate transactions, such as a change in control, a transaction with take-over effect, merger, consolidation, or sale of assets. Accordingly, our shares of common stock may be less attractive to certain investors who otherwise do not agree with Mr. Luna's positions.

***Our directors, executive officers, and significant stockholders may be able to influence us****.*

Our directors, executive officers, and other holders of more than 5% of our common stock, together with their affiliates, currently own, in the aggregate, 59.4% of our outstanding common stock and 100% of our voting stock. As a result, these stockholders, acting together, may have the ability to influence the outcome of matters submitted to our stockholders for approval, including the election of directors and any merger, consolidation, or sale of all or substantially all of our assets. In addition, these stockholders, acting together, may be able to influence the management and affairs of our company. Accordingly, this concentration of ownership might decrease the market price of our common stock by:

● delaying, deferring, or preventing a change in control;

● impeding a merger, consolidation, takeover, or other business combination involving us; or

● discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of the Company.

***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. The loss of the services of one or more of our key personnel could materially and adversely affect our operations.

Further, our success and achievement of our growth plans depend on our ability to hire, train, and retain other highly qualified personnel. Our inability to maintain or attract qualified employees could delay the development and sale of our products, disrupt our business, and interfere with our ability to execute our business plan.

***Although dependent upon certain key personnel, we do not have any key person life insurance policies on our management.***

We are dependent upon management in order to conduct our operations and execute our business plan. However, we have not purchased any insurance policies with respect to any of our management in the event of their death or disability. Therefore, should any of those key personnel, management, or founders die or become disabled, we will not receive any compensation that would assist with such person's absence. The loss of such person could negatively affect us and our operations.

***Any future litigation could have a material adverse impact on our results of operations, financial condition, and liquidity****.*

From time to time, we may be subject to litigation including product liability claims, intellectual property claims, employment-related claims, commercial disputes, regulatory and enforcement action and stockholder class and derivative actions. Risks associated with legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. In addition, our reputation could be adversely affected by negative publicity surrounding such events regardless of whether or not claims against us are successful. A successful claim brought against us in excess of available insurance or not covered by insurance or indemnification agreements, or any claim that results in significant adverse publicity against us, could have a material adverse effect on our business and our reputation. Furthermore, the litigation process can put material or excessive demands on the time of management and employees, interfering with performance of regular responsibilities and stressing or delaying business operations, and the outcome of litigation is inherently uncertain. Any future litigation will have a material adverse effect on our business.

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***Our business depends on our ability to prevent or mitigate the effects of a cybersecurity attack****.*

Our information technology systems, including third-party run payment service systems, may be subject to cyber-attacks, security breaches or computer hacking including a ransomware attack encrypting corporate information technology equipment, a directed attack against us or a data breach or cyber incident happening to a third-party network and affecting us. Regardless of our efforts, there may still be a breach, and the costs to eliminate, mitigate or address the threats and vulnerabilities before or after a cyber-incident could be significant. Any such breaches or attacks could result in interruptions, delays or cessation of operations and loss of existing or potential suppliers or customers. In addition, breaches of our information technology systems or security measures (including those of our third-party partners) and the unauthorized dissemination of sensitive personal, proprietary or confidential information about our business, our business partners, customers or other third parties could expose us to significant potential liability and reputational harm, materially damage our customer and business partner relationships, and subject us to significant reputational, financial, legal, and operational consequences. Moreover, any such breach or attack could result in litigation against us by customers or other third parties whose data is compromised by any such attack. At this time, we do not carry insurance coverage against losses resulting from a breach of our information technology systems or those of our third-party partners.

***Our business depends on our ability to prevent or mitigate the effects of commercial crime including theft by employees, forgery, and electronic crime****.*

Our internal protocols and controls cannot prevent all instances of theft, forgery, electronic crime, or other criminal activity by dishonest employees or external fraudsters. Our money, securities, and other property may be vulnerable to theft, damage, and manipulation both on our premises and in transit through a variety of criminal acts including forgery of authorized signatures on business checks, fraudulent manipulation of our computer systems, those of our third-party partners (including e-commerce and payment service systems), or those of third-party financial institution. Such activities could include an employee or hacker transferring unauthorized funds to an outside account, fraudulent electronic funds transfer instructions sent to our bank, receipt of counterfeit currency, social engineering fraud, or mismanagement or theft by persons handling funds of our qualified employee benefit plan. While we have limited coverage against forgery and employee dishonesty under our general liability policy and persons handling funds for our qualified employee benefit plan will be bonded, we do not currently have a comprehensive commercial crime insurance policy to provide broad protection from financial losses related to business-related crime. Moreover, insofar as we have limited coverage in our general insurance policy, deductibles may apply separately to related losses, a single limit may apply to a series of related losses, such coverage is likely to be inadequate to cover a material theft of this nature, particularly if a series of acts occurs over time prior to being discovered, and such coverage may not cover or be inadequate to cover certain types of losses including such indirect or consequential losses as investigative expense coverage, business interruption, loss of potential income, and legal fees, fines and penalties.

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

Our Articles of Incorporation, as amended, and Bylaws, as amended, contain 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 Articles of Incorporation, as amended, 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. Our charter documents authorizes our Board of Directors to fill vacancies or newly created directorships. 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 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 expect to 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.

**<u>Risks Related to our Products</u>**

***We have only developed The Alternative® for certain firearm models.***

Currently, the docking unit we have developed for The Alternative® is compatible with a limited selection of firearm models. To initially launch operations, we selected the most used models by the law enforcement industry, including the Glock 17, 19, and 45; Glock 22 and 23 (Pre Gen-5), Smith & Wesson M&P, CZ P-10, Springfield Echelon, Taurus TH9 and Sig Sauer P320 to produce our current docking units. However, we understand that departments may contract with other companies to supply different firearm models to their force. In this event, we may have to develop a docking unit compatible with another model sooner than anticipated. These types of changes may affect our progress, as building molds incurs significant cost for each new model that is produced.

***Sales of The Alternative® depend on the continued availability of the device's components through our current source suppliers.***

We have established multiple suppliers for each of the components for The Alternative®, which are the plastic docking unit and the alloy projectile. A disruption in the availability of raw materials and/or an increase in production costs could have an adverse impact on potential future sales of The Alternative®.

***We are dependent on our relationships with key source suppliers for our business****.*

Our future operating results depend upon our ability to obtain timely delivery of a sufficient amount with reliable quality of all components on commercially reasonable terms. Failure of a supplier's business or consolidation within the industry could further limit our ability to purchase key components in sufficient quantities and on commercially reasonable terms. Demands of competitors, including those with larger operations and stronger bargaining power, or those willing to pay a higher price or accept lower standards, could also limit our ability to purchase key components in sufficient quantities on commercially reasonable terms. Failure of our suppliers to provide sufficient quantities of components on favorable terms, meet quality standards, or deliver components on a timely basis may occur due to industry shortages of certain raw materials or other reasons. Such failures could delay or stop our production, result in possible lost sales, and seriously threaten our liquidity and revenues.

***We are dependent on the quality of parts supplied by and quality controls of our source suppliers.***

The Alternative® contains two key components, and we rely on our source suppliers to deliver these materials that comply with our specifications. While we test our finished products, we use randomized statistical inspection for components and these protocols which have inherent limitations and we may miss units that do not meet specifications. If a batch of finished products passes testing, but a unit or multiple units subsequently cause operational failures, we may need to undertake product recalls or implement protocols for improved performance or safety, which could negatively impact our reputation and business. Moreover, if any such product failure resulted in a physical injury, it could also subject us to the risks of potential product liability actions.

***Higher costs or unavailability of components, freight, materials, and accessories could adversely affect our financial results.***

Delays caused by industry allocations, material shortages (such as plastic or resins), or obsolescence could occur in the future. Such delays may take weeks or months to resolve and may result in increased costs as well as production and product fulfillment delays. In addition, in some cases, parts obsolescence may require a product re-design to ensure quality replacement components. These delays could cause significant delays in manufacturing and loss of sales, leading to adverse effects significantly impacting our financial condition or results of operations and could injure our reputation.

***If we are unable to successfully design and develop or acquire new products, our business may be harmed****.*

To maintain and increase sales we must continue to introduce new products and improve or enhance our existing products or new products. The success of our new and enhanced products depends on many factors, including anticipating consumer preferences, finding innovative solutions to consumer problems, acquiring new solutions through mergers and acquisitions, differentiating our products from those of our competitors, and maintaining the strength of our brand. The design and development of our products as well as acquisitions of other businesses are costly and we typically have several products in development at the same time. Problems in the design or quality of our products, or delays in product introduction, may harm our brand, business, financial condition, and results of operations.

***We rely on a limited number of third parties for shipping, transportation, logistics, marketing and sales of our products and components. A loss of any of such third-party relationships would have a material adverse effect on our operating results****.*

We rely on third parties to ship, transport, and provide logistics for our products and components. Our dependence on a limited number of third parties for these services leaves us particularly vulnerable due to our need to secure these parties' services on favorable terms. Loss of, or an adverse effect on, any of these relationships or failure of any of these third parties to perform as expected could have a material and adverse effect on our operations, sales, revenue, margins, liquidity, reputation, and financial and operating results.

***If we deliver products with defects, we may be subject to product recalls or negative publicity, our credibility may be harmed, market acceptance of our products may decline, and we may be exposed to liability****.*

We sell complex products including products that are new to the market and without a long performance history. These products may contain certain design and manufacturing defects including defects in materials and components that we purchase from third parties. There can be no assurance we will be able to detect and fix all defects in the products we sell. Accordingly, our products may experience quality and service problems from time to time that could result in decreased sales and operating margin and harm to our reputation.

***Our business relationships with third parties could cause us to expend significant resources and incur substantial business risk with no assurance of financial return****.*

We rely upon business relationships for the manufacturing and distribution of certain products. Our business depends upon our ability to manufacture and sell our products to our customers. We currently do not have the capability to manufacture some of our products and product components on our own and are required to enter into agreements with third parties of such services. Additionally, due to the introduction of The Alternative® in the fiscal year ended December 31, 2021, we only recently began to establish sales channels for our product by utilizing multiple marketing initiatives including media buys in digital and print publications, attending trade shows, and working with a government relations firm to build awareness and gain attention at the federal, state, and local levels. We are working with a premier media partner to educate and expand outreach in the global law enforcement market, and our team is working with affiliates and distributors in foreign markets to expand the international strategy of The Alternative®. With our reliance upon third parties for materials, components, shipping, and marketing services, there can be no assurance that such business relationships can be maintained, will be extended, renewed, or will achieve their goals. If we are unable to enter into business relationships for distribution and sales, or if any of our current business relationships are terminated or fail to achieve their goals, our business, operating results, and financial condition will be materially adversely affected.

To the extent that we internally develop a sales force, the cost of establishing and maintaining a sales force would be substantial and may exceed our cost effectiveness. The acquisition or development of a sales and distribution infrastructure could require substantial resources, which may divert the attention of our management and key personnel and defer our product development and deployment efforts. In addition, in marketing our products, we would likely compete with companies that currently have extensive and well-funded marketing and sales operations. Despite marketing and sales efforts, we may be unable to compete successfully against these companies. We may not be able to do so on favorable terms. We could rely on third parties to market and sell our products in certain territories, rather than establishing an internal sales force. When we contract with third parties, including entering into collaborations with partners, for the sale and marketing of our products, revenues depend upon the efforts of these third parties, which may not be successful. If we fail to establish successful marketing and sales capabilities or to make arrangements with third parties for such purposes, our business, financial condition, results of operations, and prospects will be materially adversely affected.

***Lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that we may develop****.*

We may be subject to proceedings or claims that may arise in the ordinary course of the business, which could include product and service warranty claims, which could be substantial. If our products fail to perform as warranted and we fail to quickly resolve product quality or performance issues in a timely manner, our reputation may be tarnished, potential sales may be lost, and we may be forced to pay damages. The occurrence of product defects and the inability to correct errors could result in the delay or loss of market acceptance of our products, material warranty expense, diversion of technological and other resources from our product development efforts, and the loss of credibility with customers, manufacturer's representatives, distributors, dealers, and end-users, any of which could have a material adverse effect on our business, operating results, and financial conditions.

Our products are used in activities and situations that involve risk of personal injury. 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. In addition, our reputation may be adversely affected by such claims, whether or not successful, including potential negative publicity about our products.

In the professional market, we intend for our product to be used by law enforcement officers involved in critical incidents as a de-escalation tool in potentially lethal situations. In the commercial market, our product is intended for use in dangerous situations as a self-defense and/or home defense tool for consumers when protecting themselves, their loved ones, or their property in potentially lethal situations.

Our product is designed for high-risk situations as an alternative to lethal force, so there is a possibility of unintended results, including wrongful death claims, if the product is not used in a manner that follows our recommended training and/or deployment guidelines. Therefore, we maintain general liability insurance that includes product liability coverage in amounts that we believe are reasonable, but there is no assurance that we will 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.

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***Our inability to obtain and retain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of products and services we develop.***

Our inability to obtain and retain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of products and services we develop. Although we plan to maintain such insurance, any claim that may be brought against us could result in a court judgment or settlement in an amount that is not covered, in whole or in part, by our insurance or that is in excess of the limits of our insurance coverage. Our insurance policies may also have various exclusions, and we may be subject to a product liability claim for which we have no coverage. We will have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts.

***Our business depends on maintaining and strengthening our brand and generating and maintaining demand for our products.***

The Alternative® name and brand image are integral to the growth of our business, as well as to the implementation of our strategies for expanding our business. Our success depends on the value and reputation of our brand, which, in turn, depends on factors such as the quality, design, performance, functionality, and durability of our products, the image of our online presence, our communication activities, including advertising, social media, and public relations, and our management of the customer experience, including direct interfaces through customer service. Maintaining, promoting, and positioning our brand are important to expanding our customer base, and will depend largely on the success of our marketing and merchandising efforts and our ability to provide consistent, high quality customer experiences. We intend to make substantial investments in these areas in order to maintain and enhance our brand, however such investments may not be successful. Ineffective marketing, negative publicity, product diversion to unauthorized distribution channels, product or manufacturing defects, counterfeit products, unfair labor practices, failure to protect the intellectual property rights in our brand, and inability to provide satisfactory customer service experience as we rapidly expand our business, are some of the potential threats to the strength of our brand, and those and other factors could rapidly and severely diminish customer confidence in us. Furthermore, these factors could cause our customers to lose the personal connection they feel with The Alternative® brand. We believe that maintaining and enhancing our brand image in our current markets and in new markets where we have limited brand recognition is important to expanding our customer base. If we are unable to maintain or enhance our brand in current or new markets, our growth strategy and results of operations could be harmed.

***Our products and/or services may not gain market acceptance.***

Our products and/or services may not gain market acceptance among law enforcement, regulators, and the gun community, which are critical to commercial success. Market acceptance of any product or service depends on a number of factors, including but not limited to the efficacy and safety of our product as demonstrated in testing and demonstrations; the timing of market introduction of such product or service as well as competitive products; and the effectiveness of our sales and marketing efforts.

***Our sales cycles can be long and unpredictable, and our sales efforts require considerable time and expense.***

The timing of our sales and related revenue recognition is difficult to predict because of the length and unpredictability of the sales cycle for our product. Government entities often undertake a significant evaluation process that lengthens the sales cycle. In addition, the impact of macroeconomic or geopolitical conditions could materially and adversely affect our business, operating results and financial condition by reducing sales, lengthening sales cycles and lowering prices for our services. We have experienced, and may experience in the future, increased scrutiny and a longer approval process for initial purchases by new customers, as a result of challenging macroeconomic conditions.

We spend substantial time and resources on our sales efforts without any assurance that our efforts will produce a sale, and it is difficult to predict whether and when a sale will be completed and when revenue from a sale will be recognized. The failure of our efforts to secure sales after investing resources in a lengthy sales process could materially and adversely affect our business and operating results.

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***Due to our limited resources and access to capital, we must prioritize development of certain product candidates over other potential candidates. These decisions may prove to have been wrong and may adversely affect our revenues.***

Because we have limited resources and access to capital to fund our operations, we must decide which product candidates to pursue and the amount of resources to allocate to each. Our decisions concerning the allocation of research, collaboration, management and financial resources toward particular product candidates may not lead to the development of viable product candidates and may divert resources away from better opportunities. Similarly, our decisions to delay, terminate or collaborate with third parties in respect of certain product candidates' development programs may also prove not to be optimal and could cause us to miss valuable opportunities. If we make incorrect determinations regarding the market potential of our product candidates or misread trends in our industry, in particular for our lead product candidate, our business, financial condition and results of operations could be materially adversely affected.

***Our business could be harmed if we are unable to accurately forecast demand for our products or our results of operations****.*

To ensure adequate inventory supply, we forecast inventory needs and often place orders with our manufacturers before we receive firm orders from our retail partners or customers. If we fail to accurately forecast demand, we may experience excess inventory levels or a shortage of product.

If we underestimate the demand for our products, we or our suppliers may not be able to scale to meet our demand, and this could result in delays in the shipment of our products and our failure to satisfy demand, as well as damage to our reputation and retail partner relationships. If we overestimate the demand for our products, we could face inventory levels in excess of demand, which could result in inventory write-downs or write-offs and the sale of excess inventory at discounted prices, which would harm our gross margins. Failures to accurately predict the level of demand for our products could cause a decline in sales and harm our results of operations and financial condition.

We may also face pricing pressures from competitors. If we fail to price our products appropriately relative to our competitors, consumers may not use our products, which could adversely affect our business and financial results.

In addition, we may not be able to accurately forecast our results of operations and growth rate. Forecasts may be particularly challenging as we expand into new markets and geographies and develop and market new products for which we have no or limited historical data. Our lack of historical data related to new products makes it particularly difficult to make forecasts related to such products.

Any of these variances would require rapid adjustments to the supply chain, production, and marketing. If we are unable to make these changes quickly or at all our inventory, production, and sales may be materially affected.

Failure to accurately forecast our results of operations and growth rate may cause us to make poor operating decisions that we may not be able to correct in a timely manner. Consequently, actual results could be materially different than anticipated. Even if the markets in which we compete expand, we have no assurance that our business will grow at similar rates, if at all.

**<u>Risks Related to Our Industry</u>**

***The market for LLA is in a state of rapid technological change which could have a material adverse impact on our business, financial condition, and results of operations****.*

The markets for LLA, in which our products and services are characterized, are associated with rapidly changing technology, which could result in product obsolescence or short product life cycles. Accordingly, our success is dependent upon our ability to anticipate technological and other changes and to successfully identify, obtain, develop, and market new products that satisfy evolving customer requirements. There can be no assurance that we will successfully develop new products or enhance and improve our existing products or that any new products and enhanced and improved existing products will achieve market acceptance. Further, there can be no assurance that competitors will not market products that have perceived advantages over our products or which render the products currently sold by us obsolete or less marketable.

We must commit significant resources to developing new products before knowing whether our investments will result in products the market will accept. To remain competitive, we may be required to invest significantly greater resources then currently anticipated in research and development and product enhancement efforts.

***The LLA industry and security products markets are highly competitive and our success depends upon our ability to effectively compete with numerous worldwide businesses.***

We face competition from a number of businesses, including worldwide businesses, many of which have substantially greater financial resources, operating scale, and a broader range of product offerings than we do. In the law enforcement market, in particular, we face competitors who have long-term, established relationships with security professionals who subscribe to an integrated suite of their products, some of which offer features that our current products do not support, and who may have made substantial investments in their hardware, creating an entry barrier to introduction of our competing product. Such competition could adversely affect our ability to win new contracts and sales and renew existing contracts. We operate in a period of intense competition in some key markets, which could affect the profitability of the contracts and sales we do win. If we cannot successfully compete in our industry and business segments, our business, financial condition, and results of operations could suffer.

***Growth or expansion of sales of our product to schools, law enforcement, and other governmental or quasi-governmental entities may require expenditure of resources and lengthen our sale cycle****.*

Generally, entities such as schools, law enforcement, and other governmental or quasi-governmental entities consider a wide range of issues before committing to purchase non-lethal defense products, including product benefits, training costs, the cost to use our products in addition to, or in place of, other products, budget constraints and product reliability, safety, and efficacy. Such considerations may result in a sales cycle that is longer than and different from sales process related to dealers and consumers. Adverse publicity surrounding our products or the safety of such products could also lengthen our sales cycle with these customers. In addition, if we successfully grow or expand sales of our products to these customers, we could encounter challenges related to funding of law enforcement and other governmental and quasi-governmental entities generally, states and municipalities that fund such entities, and the recent changes in public sentiment around police funding. We may incur substantial selling costs and expend significant effort in connection with the evaluation of our products by such potential customers before they place an order. If these potential customers do not ultimately purchase our products, we will have expended significant resources and received no revenue in return.

***Our revenues and potential profits depend on the level of funds and budgets available for our products, which is sensitive to general economic conditions and other factors****.*

The current customer base of The Alternative® is police departments, law enforcement agencies, military, and private security companies. The success of our business depends significantly on economic factors and budget constraints of these organizations. Although we have taken measures to assist U.S. police departments with funding through the grants process, volatile global economic conditions and general economic uncertainty result in factors that could adversely affect our prospects, resulting in a reduction of demand for our products and harm to our business and results of operations.

***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. When law enforcement agencies procure tactical equipment, technology, and weapons, they must do so in a process that prioritizes based on need, and the expense must fit within the agency's allotted budget for each given tactical category. Budgeted funds are usually prioritized for items to be purchased in the following year, when funds are dispersed to the agencies, which could be a factor that delays our progress and projections by extending the sales cycle. Other factors from a social and political perspective could create adverse economic effects. For example, calls to defund the police could have an effect on the availability of budgeted funds, or issues related to mandated policies could have an effect on personnel changes. Both of these types of factors could result in a reduction of demand for our products, and harm to our business and results of operations.

**<u>Risks Related to Regulation and Intellectual Property</u>**

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

We are subject to numerous federal, state, and local environmental, health and safety legislation, and other applicable regulations, laws, and measures relating to the manufacture and sale of our products. There can be no assurance that we will not experience difficulties with our efforts to comply with applicable regulations as they change in the future or that our continued compliance efforts (or failure to comply with applicable requirements) will not have a material adverse effect on our results of operations, business, prospects, and financial condition. Our continued compliance with present and changing future laws could restrict our ability to sell our products and expand our operations.

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

The manufacture, sale, purchase, possession, and use of weapons, ammunitions (including less-lethal ammunitions), firearms, and explosives are subject to federal, state, local, and foreign laws. If such regulation becomes more expansive in the future, it could have a material adverse effect on our business, operating results, financial condition, and cash flows. The Alternative® is a relatively new product that may be subject to certain laws and regulations, including those related to LLA, and future legislation or regulation. New legislation, regulations, or changes to, or new interpretations of, existing regulation could impact our ability to manufacture or sell The Alternative® or limit its market, which could impact our cost of sales and demand for our products.

We may be subject, both directly and indirectly, to the adverse impact of existing and potential future government regulation of our products, technology, operations, and markets. For example, the development, production, (re-)exportation, importation, and transfer of our products and technology is subject to U.S. and foreign export control, sanctions, customs, import and anti-boycott laws and regulations, including the Export Administration Regulations (the "EAR") (collectively, "Trade Control Laws"). If one or more of our products or technology, or the parts and components we buy from others, is or becomes subject to the International Traffic in Arms Regulations (the "ITAR") or national security controls or other controls under the EAR, this could significantly impact our operations, for example by severely limiting our ability to sell, (re-)export, or otherwise transfer our products and technology, or to release controlled technology to foreign person employees or others in the United States or abroad. We may not be able to obtain licenses and other authorizations required under the applicable Trade Control Laws. The failure to satisfy the requirements under the Trade Control Laws, including the failure or inability to obtain necessary licenses or qualify for license exceptions, could delay or prevent the development, production, (re-)export, import, and/or in-country transfer of our products and technology, which could adversely affect our revenues and profitability.

Failure by us, our employees, or others working on our behalf to comply with the applicable Trade Control Laws could result in administrative, civil, or criminal liabilities, including fines, suspension, debarment from bidding for or performing government contracts, or suspension of our export privileges, which could have a material adverse effect on us. We transact with suppliers and others who are exposed to similar risks. Violations of the Trade Control Laws or other applicable laws and regulations could materially adversely affect our products, technology, brand, growth efforts, employees, and business.

***Health and safety risks could expose us to potential liability and adversely affect our operating results and financial condition****.*

Health and safety issues related to our products may arise that could lead to litigation or other action against us, to regulation of certain of our product components, or to negative publicity. We may be required to modify our technology and may not be able to do so. We may also be required to pay damages that may adversely affect our financial condition. Even if these concerns prove to be baseless, the resulting negative publicity could affect our ability to market certain of our products and, in turn, could harm our business and results from operations.

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***We are exposed to operating hazards and uninsured risks that could adversely impact our operating results and financial condition****.*

Our business is subject to a number of risks and hazards including loss of parts or finished goods in inventory or shipment, labor disputes, and changes in the regulatory environment. Such occurrences could delay or halt production or sale of goods, result in damage to equipment, personal injury or death, monetary losses, and possible legal liability. Although we currently maintain freight and inventory insurance and general liability insurance in amounts which we consider adequate, the nature of these risks is such that liabilities might exceed policy limits, the liabilities and hazards might not be insurable, or we may elect in the future not to insure against such liabilities due to high premium costs or other reasons, in which event we could incur significant costs that could have a materially adverse effect upon our financial position.

***Tariffs, sanctions, restrictions on imports, exports, or other trade barriers between the United States and various countries may impact our revenue and results of operations****.*

Political changes and trends such as populism, protectionism, economic nationalism and sentiment toward internationally operating companies, and resulting tariffs, export controls, trade sanctions, sanctions blocking statutes, or other trade barriers, or changes to tax or other laws and policies, have been and may continue to be disruptive and costly to our business, and these can interfere with our expanding international sales, supply chain, production costs, customer relationships, and competitive position. For example, general trade tensions between the United States and China escalated in 2018, with multiple rounds of U.S. tariffs on Chinese-made goods taking effect, and we have seen the effects of the war in Ukraine, and the war in Palestine and Israel, having an effect on international trade. In addition, on February 1, 2025, the United States imposed a 25% tariff on imports from Canada and Mexico, which were subsequently suspended for a period of one month, and a 10% additional tariff on imports from China. Historically, tariffs have led to increased trade and political tensions, between not only the United States and China, but also between the United States and other countries in the international community. In response to tariffs, other countries have implemented retaliatory tariffs on U.S. goods. We work closely with third parties who monitor, evaluate, and keep us informed about the potential impact of the effective and proposed tariffs as well as other recent changes in foreign trade policy on our supply chain, costs, and potential sales and seek to implement strategies to mitigate such impact, including reviewing sourcing options and working with our vendors and merchants in existing and new product development and select suppliers in low cost regions where international trade issues are less challenging. Notwithstanding these efforts, it is possible that future trade barriers or restrictions could cause us to raise prices or make changes to our operations, any of which could materially harm our revenue or operating results. Further escalation of global trade conflict, more broadly, could be harmful to global economic growth and related decreases in confidence or investment activity in the global markets would adversely affect our business performance. We intend to do business in emerging market jurisdictions, where economic, political, and legal risks are heightened.

***Data privacy and security laws and regulations in the jurisdictions in which we do business could increase the cost of our operations and subject us to possible sanctions and other penalties****.*

Our business is subject to a number of federal, state, local, and foreign laws and regulations governing data privacy and security, including with respect to the collection, storage, use, transmission, and protection of personal information.

In addition, a number of U.S. states have enacted data privacy and security laws and regulations that govern the collection, use, disclosure, transfer, storage, disposal, and protection of sensitive personal information, such as social security numbers, financial information, and other personal information. For example, all 50 states now have data breach laws that require timely notification to individual victims, and at times regulators, if a company has experienced the unauthorized access or acquisition of sensitive personal data. State law developments, which may impose substantial penalties for violations, could impose significant costs for investigations and compliance, allow private class-action litigation and carry significant potential liability for our business. We do not currently have insurance to cover us in the event of a data breach.

The interpretation and enforcement of these laws and regulations are uncertain and subject to change, and it may require substantial costs to assess, monitor and implement compliance with any additional requirements. Failure to comply with applicable law, including international data protection laws and regulations could result in government enforcement actions (which could include substantial civil or criminal penalties), private litigation or adverse publicity and could negatively affect our operating results and 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****.*

We, our business partners, and the industries in which we operate are subject to continuing scrutiny by regulators, other governmental authorities and private sector entities or individuals in the United States, South Africa, the European Union, China, and other jurisdictions, which may lead to enforcement actions, adverse changes to our business practices, fines and penalties, or the assertion of private litigation claims and damages that could be material. For example, the expansion of our business internationally exposes us to export controls, trade sanctions import and export clearance requirements, customs, tariffs, anti-corruption legislation, anti-boycott requirements and other obligations and restrictions imposed by the United States and other governments. The U.S. Departments of Justice, Commerce, Treasury, State, U.S. Customs and Border Protection, and other U.S. and foreign agencies and authorities have a broad range of civil and criminal penalties they may seek to impose against companies for violations of export controls, trade sanctions, import and export clearance requirements, customs regulations, anti-corruption legislation, including the Foreign Corrupt Practices Act, anti-boycott requirements 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 becoming and staying compliant, and we may be subject to enforcement actions or penalties for noncompliance, including fines, suspension, debarment from bidding for or performing government contracts, or suspension of our export privileges, which could materially adversely affect our business, operations, products, technology, brand, growth efforts, employees, and business partners. 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. There can be no assurance that the risk management and compliance programs we adopt will mitigate legal and compliance risks.

***If our independent suppliers and manufacturing partners do not comply with ethical business practices or with applicable laws and regulations, our reputation, business, and results of operations would be harmed.***

Our reputation and our potential customers' willingness to purchase our products depend in part on our suppliers', manufacturers', and retail partners' compliance with ethical employment practices, such as with respect to child labor, wages and benefits, forced labor, discrimination, safe and healthy working conditions, and with all legal and regulatory requirements relating to the conduct of their businesses. We do not exercise control over our suppliers, manufacturers, and retail partners and cannot guarantee their compliance with ethical and lawful business practices. If our suppliers, manufacturers, or retail partners fail to comply with applicable laws, regulations, safety codes, employment practices, human rights standards, quality standards, environmental standards, production practices, or other obligations, norms, or ethical standards, our reputation and brand image could be harmed and we could be exposed to litigation and additional costs that would harm our business, reputation, and results of operations.

***Our employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could have a material adverse effect on our business.***

We are exposed to the risk of employee fraud or other misconduct. Misconduct by employees could include, but is not limited to, intentional failures to comply with regulatory regulations that may apply, provide accurate information to regulatory agencies, comply with manufacturing standards we have established, comply with federal and state laws and regulations, report financial information or data accurately or disclose unauthorized activities to us. Sales, marketing, and business arrangements in the law enforcement and ammunitions industry are subject to extensive laws and regulations intended to prevent fraud, kickbacks, self-dealing, and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs, and other business arrangements. Employee misconduct could also involve the improper use of information obtained in the course of our testing and trials, which could result in regulatory sanctions and serious harm to our reputation. It is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business and results of operations, including the imposition of significant fines or other sanctions.

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***We rely in part upon trade secret protection to protect our intellectual property; it may be difficult and costly to protect our proprietary rights and we may not be able to ensure its protection.***

We currently rely in part on trade secrets. While we use reasonable efforts to protect these trade secrets, we cannot assure that our employees, consultants, contractors, or advisors will not, unintentionally or willfully, disclose our trade secrets to competitors or other third parties. In addition, courts outside the United States are sometimes less willing to protect trade secrets. Moreover, our competitors may independently develop equivalent knowledge, methods, and know-how. If we are unable to defend our trade secrets from others use, or if our competitors develop equivalent knowledge, it could have a material adverse effect on our business. Any infringement of our proprietary rights could result in significant litigation costs, and any failure to adequately protect our proprietary rights could result in our competitors offering similar products, potentially resulting in loss of a competitive advantage and decreased revenue. Existing patent, copyright, trademark, and trade secret laws afford only limited protection. In addition, the laws of some foreign countries do not protect our proprietary rights to the same extent as do the laws of the United States. Therefore, we may not be able to protect our proprietary rights against unauthorized third-party use. Enforcing a claim that a third party illegally obtained and is using our trade secrets could be expensive and time consuming, and the outcome of such a claim is unpredictable. Litigation may be necessary in the future to enforce our intellectual property rights, to protect our trade secrets or to determine the validity and scope of the proprietary rights of others. This litigation could result in substantial costs and diversion of resources and could materially adversely affect our future operating results.

***If we are unable to protect our intellectual property, we may lose a competitive advantage or incur substantial litigation costs to protect our rights****.*

Our future success depends upon our proprietary technology. Our protective measures, including patent and trade secret protection and nondisclosure agreements, may prove inadequate to protect our proprietary rights. The right to stop others from misusing our trademarks, service marks, patents, designs, and copyright in commerce depends to some extent on our ability to show evidence of enforcement of our rights against such misuse in commerce. Our efforts to stop improper use, if insufficient, may lead to loss of trademark and service mark rights, brand loyalty, and notoriety among our customers and prospective customers. The scope of any patent that we have or may obtain may not prevent others from developing and selling competing products. The validity and breadth of claims covered in technology patents involve complex legal and factual questions, and the resolution of such claims may be highly uncertain, and expensive. In addition, our patents may be held invalid upon challenge, or others may claim rights in or ownership of our patents. We may be subject to intellectual property infringement claims, which could cause us to incur litigation costs and divert management attention from our business.

While we believe that our products and intellectual property do not infringe upon the proprietary rights of third parties, and undertake efforts to design around existing third-party patents or designs that we are aware of, a substantial portion of our commercial success depends upon us not infringing the intellectual property rights of others. We may become subject to claims by third parties that our technology infringes their intellectual property rights. Although all reasonable efforts are made to avoid third-party patents, there is no assurance that were a lawsuit to be brought by a third party, we would prevail. We may also become subject to these claims through indemnities that we provide to manufacturer's representatives, distributors, dealers, retail partners, and certain service providers and consultants.

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, and any allegation of infringement could cause certain reputational damage for us and our brand. Royalty and licensing agreements, if required, may not be available on terms acceptable to us or at all.

**<u>Risks Related to the Ownership of our Securities</u>**

***An investment in our securities is speculative and could result in a loss of your entire investment.***

An investment in our securities is speculative and involves a high degree of risk. There is no assurance that investors will obtain any return on their investment. You should not purchase the securities if you cannot afford the loss of your entire investment.

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***There is currently no public market for our securities and the price of our securities may be volatile and could decline substantially following this offering.***

There is currently no public market for our securities. Accordingly, no assurance can be given as to the following:

● the likelihood that an active trading market for our securities will develop or be sustained;

● the liquidity of any such market;

● the ability of our shareholders to sell their shares of common stock; or

● the price that our shareholders may obtain for their common stock.

If an active market for our securities does not develop or is not maintained, the market price of our securities may decline, and you may not be able to sell your shares. The market price of our securities may be highly volatile and subject to wide fluctuations. Our financial performance, government regulatory action, tax laws, interest rates, and market conditions in general could have a significant impact on the future market price of our securities.

Some of the factors that could negatively affect or result in fluctuations in the market price of our securities include:

● actual or anticipated variations in our quarterly operating results;

● changes in market valuations of similar companies;

● adverse market reaction to the level of our indebtedness;

● additions or departures of key personnel;

● actions by shareholders;

● speculation in the press or investment community;

● general market, economic, and political conditions, including an economic slowdown or dislocation in the global credit markets;

● our operating performance and the performance of other similar companies;

● changes in accounting principles; and

● passage of legislation or other regulatory developments.

***Public disclosure requirements and compliance with changing regulation of corporate governance pose challenges for our management team and result in additional expenses and costs which may reduce the focus of management and the profitability of our Company.***

Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations promulgated thereunder, the Sarbanes-Oxley Act and SEC regulations, have created uncertainty for public companies and significantly increased the costs and risks associated with accessing the U.S. public markets. Our management team will need to devote significant time and financial resources to comply with both existing and evolving standards for public companies, which will lead to increased general and administrative expenses and a diversion of management time and attention from revenue generating activities to compliance activities.

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***We have not paid dividends in the past and do not expect to pay dividends in the foreseeable future.***

We have never paid cash dividends on our securities and do not anticipate paying cash dividends in the foreseeable future. We currently intend to retain our future earnings, if any, to finance the development and expansion of our business. The determination to pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, restrictions contained in any financing instruments, and such other factors as our board of directors deems relevant in its discretion. Accordingly, you may need to sell your shares of our common stock to realize a return on your investment, and you may not be able to sell your shares at or above the price you paid for them, or at all for an indefinite period of time, except as permitted under the Securities Act and the applicable securities laws of any other jurisdiction.

***Exercise of options or warrants or vesting of restricted shares of common stock may have a dilutive effect on your percentage ownership and may result in a dilution of your voting power and an increase in the number of shares of common stock eligible for future resale in the public market, which may negatively impact any trading price of our shares of common stock****.*

The exercise of some or all of our outstanding options and warrants, and the vesting of restricted shares of common stock, could result in significant dilution in the percentage ownership interest of our stockholders and in a significant dilution of voting rights and earnings per share. As the date of this Annual Report, we have outstanding warrants exercisable for 360,000 shares of common stock.

***A failure of our control systems to prevent error or fraud may materially harm our Company.***

Proper systems of internal controls over financial accounting and disclosure are critical to the operation of a public company. Given the size of our company and the limited number of full-time employees that we have employed, there may continue to be certain limitations on the effectiveness of our internal controls. Moreover, we do not expect that disclosure controls or internal control over financial reporting will prevent all errors and all fraud, if any. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Failure of our control systems to prevent error or fraud could materially and adversely impact us.

***We are an "emerging growth company," and we cannot be certain if the reduced reporting and disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.***

We are an "emerging-growth company," as defined in the Exchange Act. As such, we are eligible to take, and intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies for as long as we continue to be an emerging growth company, including (i) the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act; (ii) the exemptions from say-on-pay, say-on-frequency, and say-on-golden parachute voting requirements; and (iii) reduced disclosure obligations regarding executive compensation in our periodic reports.

In addition, the Exchange Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this extended transition period and, as a result, we may adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-public companies instead of the dates required for other public companies. If we cease to be an emerging growth company, we will no longer be able to use the extended transition period for complying with new or revised accounting standards.

We cannot predict if investors will find our common stock less attractive as a result of choosing to rely on these exemptions. For example, if we do not adopt a new or revised accounting standard, our future results of operations will not be as comparable to the results of operations of certain other companies in our industry that adopted such standards. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile.

***We have made assumptions in our projections and in forward-looking statements that may not be accurate.***

The discussions and information in this Annual Report may contain both historical and "forward-looking statements" which can be identified by the use of forward-looking terminology including the terms "believes," "anticipates," "continues," "expects," "intends," "may," "would," "should," or, in each case, their negative or other variations or comparable terminology. You should not place undue reliance on forward-looking statements. These forward-looking statements include matters that are not historical facts. Forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Forward-looking statements contained in this Annual Report based on past trends or activities should not be taken as a representation that such trends or activities will continue in the future. To the extent that the Annual Report contains forward-looking statements regarding the financial condition, operating results, business prospects, or any other aspect of our business, please be advised that our actual financial condition, operating results, and business performance may differ materially from that projected or estimated by us. We have attempted to identify, in context, certain of the factors we currently believe may cause actual future experience and results to differ from its current expectations. The differences may be caused by a variety of factors, including but not limited to adverse economic conditions, lack of market acceptance, reduction of consumer demand, unexpected costs and operating deficits, lower sales and revenues than forecast, default on leases or other indebtedness, loss of suppliers, loss of supply, loss of distribution and service contracts, price increases for capital, supplies and materials, inadequate capital, inability to raise capital or financing, failure to obtain customers, loss of customers and failure to obtain new customers, the risk of litigation and administrative proceedings involving us or our employees, loss of government licenses and permits or failure to obtain them, higher than anticipated labor costs, the possible acquisition of new businesses or products that result in operating losses or that do not perform as anticipated, resulting in unanticipated losses, the possible fluctuation and volatility of our operating results and financial condition, adverse publicity and news coverage, inability to carry out marketing and sales plans, loss of key executives, changes in interest rates, inflationary factors, and other specific risks that may be referred to in this Annual Report or in other reports issued by us or by third-party publishers.

**<u>Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations</u>**

The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and the notes to those statements that are included elsewhere in this Annual Report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the Risk Factors, Cautionary Notice Regarding Forward-Looking Statements and Business sections in this Annual Report. We use words such as "anticipate," "estimate," "plan," "project," "continuing," "ongoing," "expect," "believe," "intend," "may," "will," "should," "could," and similar expressions to identify forward-looking statements. Our future operating results, however, are impossible to predict and no guaranty or warranty is to be inferred from those forward-looking statements.

**Overview**

Alternative Ballistics Corporation, a Nevada corporation, was formed on August 27, 2020 for the purpose of acquiring Alternative Ballistics, L.P. ("LP"), a California limited partnership, and merging into the new corporate entity ("ABC"). Our corporate office is in Las Vegas, Nevada.

We are in the LLA market of the law enforcement industry. This is a niche market with multiple tools and options available to law enforcement personnel for the deployment of various types of ammunition designed to temporarily incapacitate, stun, or cause temporary discomfort to a person without penetrating the body. Less-lethal technologies are continuously evolving, and law enforcement agencies are generally open to reviewing data, scheduling demonstrations, or procuring ammunition samples to conduct their own internal testing, which is influencing the growth of the LLA global market.

Our immediate plan of operations includes continuing to pursue early stage adoption in the domestic professional market, securing our first international contracts, expanding product compatibility, and progressing toward the commercial launch of our consumer product. We intend to penetrate both domestic and international professional markets by continuing to introduce The Alternative® to law enforcement agencies, private security firms, and other relevant federal and governmental agencies. Concurrently, we plan to launch our initial go-to-market strategy for The Home Defense™ that is focused on targeted distribution through privately owned gun ranges and certified Concealed Carry Weapon (CCW) training providers. We intend to leverage this approach to gain direct access to engaged and qualified civilian consumers for early adoption, product education, and initial revenue generation.

We anticipate that our training program will represent one of our most significant and operationally complex initiatives. This program will involve deploying domestic and international training teams to conduct multi-day presentations, demonstrations, and instructional programs. These activities will require transporting equipment, product inventory, and custom gear, including training targets and support infrastructure. As the program scales, we expect a need to expand our personnel by onboarding additional qualified trainers, particularly individuals with professional law enforcement experience.

There can be no assurance that our planned operations will be successfully executed as anticipated. Investors are encouraged to carefully review the "Risk Factors" section of this Annual Report for a discussion of risks associated with our business.

**<u>Results of Operations for the Fiscal Year Ended December 31, 2025 Compared to the Fiscal Year Ended December 31, 2024</u>**

*Revenue*

Revenue for the year ended December 31, 2025 were approximately $0.008 million compared to approximately $0.007 million for the year ended December 31, 2024. The increase of approximately $0.001 million in gross revenues primarily relates to initial equipment sold to new international distribution partners.

*General and Administrative Expenses*

General and administrative expenses for the year ended December 31, 2025 were approximately $39.4 million compared to approximately $14.3 million for the year ended December 31, 2024. The increase of approximately $25.1 million in general and administrative expenses primarily relates to stock based compensation. We expect to see further increases in general and administrative expenses in future periods as we grow our operations.

During the year ended December 31, 2025, we issued a total of $38.4 million of stock compensation within general and administrative expenses: $0.2 million to our Board of Directors and advisory board, $0.1 million to our employees, $13.6 million to our executives as shares for services as well as settlement of deferred compensation, $24.0 million to a related party for the extension of a convertible note, and $0.5 million on consulting services which included fundraising initiatives, investor relations, sales consulting and marketing services.

*Sales and Marketing Expenses*

Sales and marketing expenses for the year ended December 31, 2025 were approximately $0.5 million compared to approximately $0.5 million for the year ended December 31, 2024. Sales and marketing expenses primarily relates to media campaigns, trade shows, and demonstrations.

*Professional Fees*

Professional fees for the year ended December 31, 2025 were approximately $0.4 million compared to approximately $0.3 million for the year ended December 31, 2024. The increase of approximately $0.1 million in professional fees primarily relates to additional legal services associated with legal advisory related to offerings. All these fees were paid in cash and none were paid to our related parties.

*Research and Development Expenses*

Research and development expenses for the year ended December 31, 2025 were approximately $0.0003 million compared to approximately $0.01 million for the year ended December 31, 2024. The decrease of approximately $0.0007 million in research and development expenses in 2024 from 2023 primarily relates to a reduction in ballistics development testing

 

*Interest Expense*

Interest expense for the years ended December 31, 2025 and 2024 was approximately $0.8 million and $0.2 million respectively, and the increase of approximately $0.6 million was primarily related to interest on the convertible notes issued during 2025 and financing costs of warrants related to the convertible notes. Going forward, we expect an increase in our interest expense because of the interest on existing debt.

*Operating Activities*

During the year ended December 31, 2025, operating activities used approximately $1.2 million of cash, primarily resulting from our net loss of approximately $41.1 million, partially offset by stock based compensation of approximately $38.4 million, amortization of debt issuance costs of $0.6 million and an increase in accounts payable and accrued expenses of $1.1 million.

During the year ended December 31, 2024, operating activities used approximately $1.6 million of cash, primarily resulting from our net loss of approximately $15.3 million, partially offset by shares issued for services of approximately $12.7 million.

*Financing Activities*

During the year ended December 31, 2025, net cash provided by financing activities was approximately $0.9 million, consisting of proceeds from a convertible notes payable of $0.8 million and proceeds from the sale of common stock of $0.1 million.

During the year ended December 31, 2024, net cash provided by financing activities was approximately $1.3 million, consisting of proceeds from a note payable of $1 million.

*Funding Requirements*

We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we advance our management team, marketing, and research and development.

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations through a combination of equity offerings and debt financing. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of such stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures, or declaring dividends.

**Liquidity and Capital Resources**

As indicated in the accompanying financial statements, we had an accumulated deficit of approximately $99.6 million as of December 31, 2025. We incurred a net loss of approximately $41.1 million and cash outflows from operations of approximately $1.2 million for the year ended December 31, 2025. We had an accumulated deficit of approximately $58.5 million as of December 31, 2024. We incurred a net loss of approximately $15.3 million and cash outflows from operations of approximately $1.6 million for the year ended December 31, 2024. We expect to continue to incur significant costs in the pursuit of our business plans. We cannot assure you that our plans to raise capital or to complete our research and development activities and commercialize our products will be successful. These factors, among others, raise substantial doubt about our ability to continue as a going concern.

Since our inception, we have incurred significant operating losses. We expect to incur significant expenses and operating losses for the foreseeable future. To date, we have funded our operations with proceeds from sales of common stock and borrowings under convertible promissory notes. As of December 31, 2025, we had cash and cash equivalents of approximately $0.004 million.

Our short-term material cash requirements are approximately $4.7 million, which we expect can provide us with one year of operating capital and payment of debt obligations. Our long-term material cash requirements are approximately $9.7 million, which we expect can provide us with five years of operating capital and payment of debt obligations. The anticipated source of funds to satisfy our cash requirements are through equity investments.

We have a total of current material debt of $3.1 million in principal in the form of convertible promissory notes and accrued interest. We obtained a Working Capital Loan of $1 million from Solyco on August 2, 2024, which is accruing interest at 18% per annum, Please see more detailed information in "—Working Capital Loan." We also completed a bridge financing on January 28, 2025 and July 22, 2025, whereby we issued to Solyco a convertible note of $500,000 and $300,000, respectively, which both convertible notes bear an interest rate of 18% per annum and are convertible into shares of the Company's common stock at a 50% discount to the "Qualified Offering Price," as defined therein. Please see more detailed discussion under "Certain Relationships and Related Party Transactions—Related Party Promissory Note—Solyco Capital Bridge Loan."

**Critical Accounting Policies**

See Note 2 in our Financial Statements for our Significant Accounting Policies.

**Revenue Recognition**

We generate revenue through the distribution of our products and accessories to dealers/distributors, security companies, and law enforcement agencies. Revenue is recognized upon transfer of control of goods to the customer, which generally occurs when title to goods is passed and risk of loss transfers to the customer. Depending on the contract terms, transfer of control is upon shipment of goods to or upon the customer's pick-up of the goods.

We recognize revenue in accordance with ASC 606, Revenue from Contracts with Customers, which requires that five basic criteria be met before revenue can be recognized: (i) identify the contract with the customer; (ii) identity the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price; and (v) recognize revenue when or as the entity satisfied a performance obligation.

**Stock Based Compensation**

We follow the fair value recognition provisions issued by the Financial Accounting Standards Board ("FASB") in Accounting Standards Codification ("ASC") Topic 718, Stock Compensation ("ASC 718") *Compensation – Stock Compensation*.

The Company issues stock options and warrants, shares of common stock and restricted stock units as share-based compensation to employees and non-employees. Share-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the requisite service period. Recognition of compensation expense for non-employees is in the same period and manner as if the Company had paid cash for services. Forfeitures are accounted for as they occur. The fair value of restricted stock units is determined based on the number of shares granted and the quoted price of our common stock and is recognized as expense over the service period. We also use Black-Scholes option pricing model for the purpose of estimating the fair value of options and warrants. Changes in our Black-Scholes assumptions, or if we were to utilize an alternative method for valuing options or warrants issued to our vendors, could impact our expense and our results of operations.

**Off-Balance Sheet Arrangements**

During the periods presented, we did not have and we do not currently have any off-balance sheet arrangements, as defined in the rules and regulations of the Commission.

**Working Capital Loans**

We have issued the following Working Capital Loans to Solyco in order to fund our working capital needs:

On August 2, 2024, we borrowed $1 million in promissory note. which has an interest rate of 18% and matured on December 31, 2025.

On January 28, 2025, we borrowed $500,000 in promissory note, which has an interest rate of 18% and matured on December 31, 2025.

On July 22, 2025, we borrowed $300,000in promissory note which has an interest rate of 18% and matures on April 22, 2026.

In connection with the Working Capital Loan, we also issued to Solyco warrants to purchase shares of our common stock equal to the number of shares that Solyco would receive assuming full conversion of the Note (the "Warrant"). The Warrants have an exercise price equal to the lower of: (i) $5.00 or (ii) a 50% discount to the "Qualified Offering Price," as defined therein, and a term of five years.

The above summary of our Working Capital Loan is qualified in its entirety by reference to the full text of the Loan Agreements, Promissory Notes, and Warrants which are filed as exhibits to this Annual Report.

**<u>Item 3. Directors and Officers</u>**

We are managed by our directors and executive officers. Our Board of Directors consists of five directors, two of whom are independent. Our directors serve for one-year terms and until their successors are duly elected and qualified. Set forth below are the names, ages, and positions of our directors and executive officers as of the date of this Annual Report:

---

| | | | |
|:---|:---|:---|:---|
| **Name** | **Age** | **Position** | **Term** |
| **Steven Luna** | 42 | Chief Executive Officer and Director | September 2020 to Present |
| **Jason LeBlanc** | 52 | Chief Operations Officer and Director | March 2021 to Present |
| **Vanessa Luna** | 42 | Executive Vice President and Chairperson of the Board | April 2022 to Present |
| **John Lomoro** | 56 | Chief Financial Officer | May 2025 to Present |
| **Bruce Culver** | 80 | Director | September 2024 to Present |
| **Bruce Amaro** | 49 | Director | September 2024 to Present |

---

**Biographical Information**

**Steven Luna, *Chief Executive Officer and Director***

Mr. Luna began his career in 2006 working for Pendum armored as a Supervising Technician, where he carried a firearm daily while performing duties in the field as a driver, technician, and guard. Then, in 2009 Mr. Luna was a Sales and Investigative Resolution Specialist in the legal industry working for one of the nation's leading litigation support companies (First Legal Investigations). In 2013, Mr. Luna transitioned from legal into the marketing technology sector as a regional account executive providing web development and search engine optimization (SEO) services for key clients in Los Angeles and Orange County, California, which was his first exposure to the public markets through a company named LiveDeal (Nasdaq:LIVE). In 2013, he became Senior Advisor of Investor Relations for a Las Vegas, Nevada firm, and from there he launched a consultant group with two of his partners, where they focused on business development and investor relations for private and public entities named Luna Consultant Group, which he cofounded with his sister, Vanessa Luna, in 2015. In 2018, Mr. Luna joined Global Payout (OTCPK:GOHE) as Director of Investor Relations. His career expertise in the public markets enabled Mr. Luna to assist over two dozen publicly traded companies on OTC and Nasdaq to create investor awareness and maintain or increase operational efficiencies. Mr. Luna has been instrumental in business execution, public and investor relations, product launch, effective go-to-market strategies, and realized revenue.

Mr. Luna attended Mt. San Antonio College, where he took courses in Criminal Justice. Although he pursued studies in this field, he did not complete a degree.

Mr. Luna brings a wide range of business skills to our board of directors from his experience in various sectors of the legal and technology industries and through his time as Vice President of his own business and investor relations consulting firm. We believe that these skills as well as his experience in the public markets will be valuable to our board of directors.

**Jason LeBlanc, *Chief Operations Officer and Director***

From 2008 to 2018, Mr. Leblanc began as a Court Department Manager and ascended through the ranks becoming the San Diego Senior Division Partner of First Legal, a premier litigation support company working with some of the largest law firms in the world, with over 13 locations throughout California, Nevada, and Arizona. At First Legal, he served as the Regional Director overseeing all aspects of the business from sales and development, to operations. He led a team of more than 30 employees and was responsible for the San Diego region's profit and loss, which ranked in the company's top three performers out of all locations as well as for profit margin and the lowest employee turnover rate in the company.

After his ten-year tenure at First Legal, in 2018, Mr. LeBlanc moved into an OTC fintech company, first as Director of Business Development and then as Chief Operations Officer, (OTC: GOHE) where he helped the company realize millions of dollars in revenue within his first year as a C-Level executive. From the Chief Operations position, he moved to Chief Compliance Officer, where he was instrumental in government relations activities, presenting to regulators and legislators in several states, including California, Washington, Nevada, Ohio, and New Jersey.

Mr. LeBlanc began his college education at the University of Louisiana, completing several semesters before relocating to San Diego. There, he continued his studies at the University of Phoenix, earning a Bachelor of Science degree in Business Finance in 2009.

Mr. LeBlanc provides a wide range of professional acumen to our board of directors from his experience in business development, operations, and compliance, which he has built through his experience in the legal, fintech, and finance industries. We believe that these experiences qualify Mr. LeBlanc to serve on our board of directors.

**Vanessa Luna, *Executive Vice President and Chairperson of the Board***

In her more than 20 years of professional experience, Ms. Luna has held multiple C-Suite, Director, Board, and management-related positions where her experience and keen business acumen have been crucial in driving significant growth and profitability as well as the development and launch of initiatives focused on maximizing internal processes and procedures to create a more productive work environment. This experience includes executive and management roles at OTC, Nasdaq, and Fortune 500 companies, the American Red Cross, and some of the nation's leading service organizations in the private sector including legal, prepaid card, financial, construction, technology, real estate, high-risk, and other service industries Ms. Luna's professional experience spans from 2001 through 2008 and includes roles at GreenDot Corporation, Bank of America Corporation, ARC-San Diego, Thornton Financial, West Coast Drywall, Michelson Labs, and Apollo EDI, Inc. From 2008 through 2013 Ms. Luna worked as Finance Manager/Account Executive for First Legal Network. More recently, Ms. Luna worked as Chief Operating Officer at GreenBox POS (now, RYVYL, Inc.) from 2021 through 2022 (Nasdaq: RVYL); Global Payout, Inc. as Chief Executive Officer from 2016 through 2020 (OTC:GOHE); Luna Consultant Group, LLC as President and CEO from 2015 to Present; and Director of Business Development at LiveDeal Inc. in 2013 (Nasdaq: LIVE).

Her prior and ongoing experience remain as an acting CEO to Luna Consultant Group, LLC ("LCG") a private corporate strategy, communications, and business development firm which she co-founded in January 2015 where she works to drive profitability and bring awareness to small-to-mid-cap companies across a diverse range of professional sectors representing both public and private clientele. Ms. Luna has worked with over two dozen publicly traded companies and continues to consult for public companies.

Ms. Luna attended Mt. San Antonio College, studying Business Management for several semesters. Although she did not complete a degree, she launched into the corporate world, where she gained hands-on business development experience. Her achievements in these roles provided her with insights and expertise in business.

We believe that Ms. Luna is qualified to serve as our Chairperson due to her extensive experience and background in business development, operations, and organizational growth initiatives for both private and public companies.

**John Lomoro, *Chief Financial Officer***

Mr. Lomoro has more than 30 years of experience in private and publicly held companies in such industries as life sciences, Software-as-a-Service (SaaS) and manufacturing. Mr. Lomoro has a significant amount of experience in scaling financial operations and reporting of fast-growing companies. Mr. Lomoro also currently serves as the CFO for a few companies in the life science space. From 2011-2019, Mr. Lomoro was with Kyriba Corp. (a SaaS Fin-tech company) as the SVP Finance, North America during their time of significant growth in the U.S. as well as internationally. Mr. Lomoro held various senior financial roles in other companies such as Carl Zeiss Vision and DJO Global, Inc. Mr. Lomoro started his career in public accounting at Ernst & Young LLP from 1992-1998. He is a licensed certified public accountant in California and received his B.S. degree in Accounting from St. Cloud State University in Minnesota.

As our Chief Financial Officer, Mr. Lomoro oversees all strategic financial reporting, supports the company's control environment, and plays a critical role in financial audits. His leadership in establishing financial and accounting best practices will be instrumental as we continue to pursue our anticipated growth trajectory.

**Bruce R. Culver, *Director***

 

Mr. Culver is a distinguished entrepreneur, investor, executive, and scientist with a career spanning over four decades. In 1985, Mr. Culver founded Lab Support, Inc. a company he led as its CEO, Chairman, and Director until 1990. In 1990, he founded Profession Staff PLC, a UK specialty staffing business, and served as its CEO and Chairman. In 1993, Mr. Culver acquired California Distribution, Inc. a logistics and distribution company, which he managed until its sale in 2009. Currently, Culver is a General Partner and Investor with Solyco Advisors, a private equity investment firm based in Detroit. He remains an active investor, advisor, mentor, and director for various companies, including Digital Map Products, Newscrafted, Moonlighting, and Futures.

Mr. Culver played an integral role in the launch and growth of Taser (Nasdaq:AXON), which manufactures and distributes a less lethal device. At Taser's point of going public, Mr. Culver was the largest shareholder at Taser and was a member of its Board of Directors for over 16 years and held positions on various committees for the company.

Mr. Culver earned his Bachelor of Science in Chemistry from the University of South Dakota and a Master of Science in Analytical Chemistry from Montana State University. He served on the Board of Trustees for the Santa Barbara Museum of Natural History from 2005 to 2011 and is a member of the Business Advisory Council for the California State University Channel Islands Smith Business School. Presently, he serves as Chairman of God's Hidden Treasures, a non-profit organization in Ukraine.

We believe that Mr. Culver is qualified to serve as our director due to his extensive experience in the less lethal technology industry, including his pivotal role in the growth and success of Taser (now Axon), where he was the largest shareholder at the time of its initial public offering and served on its board of directors for over 16 years. His strong scientific background, with a Bachelor's and Master's degrees in Chemistry, provides him with a deep understanding of the technology behind less lethal devices. Additionally, his proven leadership as an entrepreneur, investor, and executive, along with his governance experience on multiple boards and committees, equips him with the strategic insight necessary to drive innovation and growth in this field.

**Bruce Amaro, *Director***

Mr. Amaro is a seasoned Project Accountant with over 20 years of experience in financial management across various industries. Mr. Amaro's career began at JWT, where he held various roles from June 1999 to May 2004, including Financial Analyst Coordinator and Time of Staff Administrator. After JWT, Amaro joined David Yurman as part of the Accounting Services team, where he worked from 2005 to 2007. In 2007, Amaro transitioned to R/GA Media Group, where he served as Accounts Payables Manager for five months before becoming the Client Team Finance Manager. Following his tenure at R/GA, Amaro held positions at PSL Group and Interactive One as a Project Accountant and Senior Revenue Accountant, respectively, from 2010 to 2014. From 2014 to 2017, Amaro worked at Kaltura and Everyday Health Inc. where a critical aspect of his work included SOX Compliance and Audit support and was the Business Manager at BCB Group from May 2017 to June 2018. Since July 2018, Mr. Amaro has been the Financial Account Manager at Gensler where he is responsible for financial account management and analysis for the firm's projects and business practices.

We believe that Mr. Amaro is qualified to serve as our director due to his extensive financial management experience spanning over 20 years across various industries, including his expertise in project accounting, financial analysis, and compliance. His career progression—from financial roles at JWT, David Yurman, and R/GA Media Group to senior accounting positions at PSL Group, Interactive One, and Kaltura—demonstrates his ability to manage complex financial operations and ensure fiscal responsibility. Additionally, his experience with SOX compliance and audit support highlights his strong understanding of regulatory frameworks, making him well-equipped to oversee financial governance. His depth of experience in financial oversight, compliance, and business management makes him a valuable asset in a director role.

**Law Enforcement Consultant**

**Alex Perez, *Strategic Law Enforcement Consultant***

Chief Perez (ret.), a 28-year veteran of the North Las Vegas Police Department (the "NLVPD"), recently completed his honorable and decorated career serving as the city's top law enforcement leader. Starting as a Patrol Officer in the early 1990s, he steadily rose through the ranks to working as a Narcotics Investigator on an FBI Task Force and transitioning to a position with the Joint Terrorism Task Force shortly after 9/11. He continued earning promotions to Sergeant and Lieutenant before graduating from the FBI National Academy #245 in 2011. He became Assistant Chief shortly before settling into his executive leadership role in 2015, as the city's first Latino Chief of Police.

During his time as the city's top cop, Chief Perez expanded the NLVPD force from 245 officers to 350 sworn officers and oversaw a team of over 150 civilian support staff. He was an innovative public official, who managed financial aspects of the department by securing and monitoring the use of budgetary monies and prepared requests to government agencies to obtain funds for special operations and equipment for the department.

Chief Perez's success was defined by his ability to bring the community together through action and dialogue. He cultivated inclusiveness, mutual trust, transparency, and respect within the department and with the public. One of his remarkable achievements was starting the Hispanic Citizen's Academy to educate Spanish speaking citizens on how law enforcement works, which successfully bridged a stronger relationship between the community and the department.

Chief Perez is widely regarded as one of the most effective chiefs to serve the City of North Las Vegas, and he remains a member of various law enforcement associations, such as the Nevada Sheriffs & Chiefs Association, the International Association of Chiefs of Police, and the Latino Peace Officers Association. He is a current board member of 10,000 Kids and Nevada Child Seekers, two non-profit organizations that focus on community initiatives in Nevada and around the country, which include assisting families and law enforcement in the location of missing children and putting an end to child trafficking.

In his role as Strategic Law Enforcement Consultant, Chief Perez leverages his deep experience as a police officer and public official to help articulate and lend credibility to our mission. He plans to continue to connect with federal, state, and local law enforcement leaders across the country to share his vision and support of The Alternative®, as an expedient less-lethal device that is accurate and effective in stopping threats at longer ranges and designed with officer safety in mind.

**Board Composition**

Our Bylaws provide that the Board of Directors shall consist of at least one member, and that our Board shall determine the number of directors from time to time. Each director serves for a term that expires until the next annual meeting of shareholders or until their successor shall have been elected and qualified, or until their earlier resignation, removal from office, or death.

**Advisory Board**

Our Board approved the establishment of an Advisory Board on August 14, 2023 of three to five members to provide advisory services to us, including utilizing their networks to introduce The Alternative, advise us on potential market penetration, and counsel us on public policy initiatives.

Our Advisory Board is mandated to meet no less than once per month and to have an annual weekend retreat to discuss strategic initiatives for the following year.

We plan to compensate the members of our Advisory Board $5,000 per calendar quarter, payable in arrears, and options to purchase 20,000 shares of common stock, which shall vest every calendar quarter, payable in arrears, with a term of ten years, and an exercise price based on the current "Fair Market Value," which shall be determined by the Board of Directors or, if the common stock is traded or quoted on an exchange or over the counter marketplace, by the average of the last sale price of the common stock for the ten trading days prior to the last day of the calendar quarter.

Currently, we have one person on our Advisory Board:

**Kevin Faulconer, *Advisory Board***

Kevin Faulconer is a distinguished expert in governance, public policy, and operational improvement in large organizations. Mr. Faulconer served as the 36th Mayor of San Diego from 2014 to 2020. He also served in several national organizations, and as vice president at the global public relations firm, Porter Novelli, specializing in strategic crisis management and public affairs. He is currently a strategic advisor at Collaborate for California and Visiting Fellow at Pepperdine University School of Public Policy.

**Family Relationships**

Steven Luna, Chief Executive Officer, and Vanessa Luna, Executive Vice President, are brother and sister.

**Role of Our Board of Directors in Risk Oversight**

One of the key functions of our board of directors is informed oversight of our risk management process. Our board of directors administers this oversight function directly, and will have supporting committees, including the audit committee, compensation committee, and the nominating and corporate governance committee, who each will then support the board of directors by addressing risks specific to its respective areas of oversight. In particular, our audit committee has the responsibility to consider and discuss our major financial risk exposures and the steps our management takes to monitor and control these exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken. The audit committee also monitors compliance with legal and regulatory requirements, in addition to oversight of the performance of our internal audit function. Our compensation committee assesses and monitors whether any of our compensation policies and programs has the potential to encourage excessive risk-taking.

**Code of Business Conduct and Ethics**

We have adopted a written code of business conduct and ethics that will apply to our directors, officers, and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions and agents and representatives, including consultants. We intend to disclose future amendments to such code, or any waivers of its requirements, applicable to any principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions or our directors on our website identified above. The inclusion of our website address in this Annual Report does not include or incorporate by reference the information on our website into this Annual Report.

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

There are limitations of liability and indemnification and advancement rights applicable to our directors and officers. See "Description of Securities—Limitation on Liability and Indemnification of Directors and Officers."

**Executive Compensation**

***Summary Compensation Table***

The table below summarizes the total compensation paid or earned by our executive officers for the years ended December 31, 2025 and 2024:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Name and Principal Position** | **Year** | **Salary<br> ($)** | **Stock<br> Awards<br> ($)** | **Option<br> Awards<br> ($)** | **All Other<br> Compensation<br> ($)** | **Total <br> ($)** |
| Steven Luna*, Chief Executive Officer and Director* (1) | 2025 | 210000 | 2750000 |  |  | 2960000 |
|  | 2024 | 250000 |  | 16990 |  | 266990 |
| Jason LeBlanc, *Chief Operations Officer And Director* (1) | 2025 | 166667 | 1660000 |  |  | 1826667 |
|  | 2024 | 200000 |  | 25675 |  | 225675 |
| Vanessa Luna, *Executive Vice President and Chairperson of the Board* (1) | 2025 | 191667 | 2200000 |  |  | 2391667 |
|  | 2024 | 225000 |  | 25675 |  | 250675 |
| John Lomoro, *Chief Financial Officer* | 2025 | 31250 |  |  |  | 31250 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) –
 On May 1, 2025, Executive received common stock in settlement of deferred compensation earned
 from August 2024 and through April 2025. The value of the settlement for Mr. LeBlanc, Mr.
 Luna and Ms. Luna was $120,192, $160,257 and $160,257, respectively.

***Narrative to Summary Compensation Table***

We believe that the primary goal of executive compensation is to align the interests of our executive officers with those of our shareholders in a way that allows us to attract and retain the best executive talent.

*Annual Base Salary*. Base salary is designed to compensate our named executive officers at a fixed level of compensation that serves as a retention tool throughout the executive's career. In determining base salaries, our Board of Directors considers each executive's role and responsibilities, unique skills, future potential with us, salary levels for similar positions in our market, geographical location, and internal pay equity.

*Option Awards.* We plan to offer option awards to executives and other employees, in the discretion of the Board of Directors, considering the executive's role and other compensation.

*Health/Welfare Plans.* In 2024, we had a medical healthcare plan in place, however, this plan was terminated in 2025.As part of their employment agreements, each Executive is entitled to a medical stipend which ranges by Executive from $2,000 to $3,500 per month.

**Employment Agreements with our Named Executive Officers**

Each of our Executive Officers, except Mr. Lomoro, entered into an Employment Agreements effective May 1, 2025 for a term ending on December 31, 2025, subject to automatic renewal. Each of the Employment Agreements include the following terms:

*Medical Stipend.* The Executive Officer is entitled to a medical stipend which ranges by Executive from $2,000 to $3,500 per month.

*PTO Plan.* Each Executive Officer is entitled to PTO, in accordance with PTO Freedom Plan, subject to prior approval by the CEO or EVP, so long as doing so is consistent and in balance with their job responsibilities and business needs.

*Annual Cash Bonus.* The Board of Directors shall award each Executive Officer an annual cash bonus based on an evaluation of performance and Peer Group compensation practices, taking into account company and individual performance objectives.

*Golden Parachute.* Each of our Executive Officers has golden parachute provisions in their employment contracts in the event there is a change-in-control of the Company, which includes a lump sum cash payment and ranges by Executive from one to three times of the Executive Officer's annual salary, cash bonus, and incentive awards.

*Severance Payments.* Executives are entitled to severance payments in the event of a termination without cause, which include a lump sum payment and ranges by Executive from one to three times the Executive Officer's annual salary, cash bonus, and incentive awards.

*Compensation Terms for Steven Luna*

Steven Luna is entitled to annual compensation of $190,000 and a restricted stock award of $750,000 worth of shares of common stock, vesting in three equal installments, the first installment vesting on the last day of each quarter through the term of the Employment Agreement granted at the then current fair market value, which will be determined by the Board of Directors. After entering into the employment agreement, Mr. Luna agreed to forego $500,000 worth of the shares of common stock.

*Compensation Terms for Jason LeBlanc*

Jason LeBlanc is entitled to annual compensation of $150,000 and a restricted stock award of $480,000 worth of shares of common stock, vesting in three equal installments, the first installment vesting on the last day of each quarter through the term of the Employment Agreement granted at the then current fair market value, which will be determined by the Board of Directors. After entering into the employment agreement, Mr. LeBlanc agreed to forego $320,000 worth of the shares of common stock.

*Compensation Terms for Vanessa Luna*

Vanessa Luna is entitled to annual compensation of $175,000 and a restricted stock award of $600,000 worth of shares of common stock, vesting in three equal installments, the first installment vesting on the last day of each quarter through the term of the Employment Agreement granted at the then current fair market value, which will be determined by the Board of Directors. After entering into the employment agreement, Ms. Luna agreed to forego $400,000 worth of the shares of common stock.

*Compensation Terms for John Lomoro*

John Lomoro entered into an offer of employment on May 15, 2025 and is entitled to annual compensation of $60,000 on a part-time basis and a signing bonus of 50,000 shares of common stock after 90 days of employment, which shares were not issued in 2025.

As part of the Executive Employment Agreements, each executive has the option of election to defer a portion or all of their annual salary. At the time of this filing, each executive has elected to defer a portion of their annual salary.

 

*Amendment to 2023 A&R Employment Agreement*

On November 1, 2024, the Company entered into another amendment to the respective A&R Employment Agreement with each Steven Luna, Jason LeBlanc and Vanessa Luna (collectively, the "Amendment to A&R Employment Agreement"), whereby each of these executive officers returned certain number of shares of common stock issued to them during the first three quarters of 2024 (collectively, the "Returned Executive Shares") back to the Company. The Returned Executive Shares have been returned to the Company's treasury and credited back to the Company's equity incentive plan and will be issued back to these executives no later than December 31, 2025. In the event that the Company's common stock becomes listed on any stock exchange, the Company agrees to issue the Returned Executive Shares immediately to these executives, all of which will vest immediately upon such issuance. Copies of the Amendment to A&R Employment Agreements are filed as Exhibits 10.5 to 10.8.

**Long-Term Incentive Plan Awards**

We established the 2021 Equity Compensation Plan, effective July 15, 2021, for the benefit of the directors, executives, independent contractors, and key employees. Awards under the 2021 Equity Compensation Plan may be made in the form of (i) Incentive Stock Options; (ii) Nonqualified Stock Options; (iii) Stock Appreciation Rights; (iv) Restricted Stock; (v) Deferred Stock; (vi) Stock Awards; (vii) Performance Shares; and (viii) Other Stock-Based Awards.

*Administration.* The Plan is administered by the Board of Directors, and once established, will be administered by the Compensation Committee.

*Authorized Shares.* The aggregate number of shares reserved for issuance under the 2021 Equity Compensation Plan is 2,500,000 shares of common stock.

*Stock Options.* Stock options may be granted under the 2021 Equity Compensation Plan. The exercise price of options granted under our 2021 Equity Compensation Plan must at least be equal to the fair market value of our common stock on the date of grant. The term of an incentive stock option may not exceed ten years, except that with respect to any participant who owns more than 10% of the voting power of all classes of our outstanding stock, the term must not exceed five years and the exercise price must equal at least 110% of the fair market value on the grant date. The administrator will determine the methods of payment of the exercise price of an option, which may include cash, shares, or other property acceptable to the administrator, as well as other types of consideration permitted by applicable law. After the termination of service of an employee, director, or consultant, they may exercise their options for the period of time stated in their option agreement. Generally, if termination is due to death or disability, the option will remain exercisable for 12 months. In all other cases, the option will generally remain exercisable for three months following the termination of service. However, in no event may an option be exercised later than the expiration of its term. Subject to the provisions of our 2021 Equity Compensation Plan, the administrator determines the other terms of options.

*Stock Appreciation Rights.* Stock Appreciation Rights may be granted in connection with Stock Options. The administrator determines whether payment with respect to exercise shall be made in cash, stock, or a combination thereof.

*Restricted Stock.* Terms of the Restricted Stock Awards will be determined by the administrator, including price, length, restrictions, lapse of restrictions, dividends, and distributions. If employment terminates prior to the vesting of the award, then the shares are forfeited.

 

*Stock Awards*

The administrator is authorized to grant Stock Awards and will, in their sole discretion, determine the recipients and the number of shares of common stock underlying each Stock Award. Each Stock Award will be subject to such terms and conditions consistent with the 2021 Equity Compensation Plan as determined by the administrator and as set forth in an Award agreement, including, without limitation, restrictions on the sale or other disposition of such shares and our right to reacquire such shares for no consideration upon termination of the Participant's employment or membership on the board, as applicable, within specified periods.

*Performance Shares*

The administrator is authorized to grant Performance Awards and will, in their sole discretion, determine the recipients and the number of shares of common stock that may be subject to each Performance Award. Each Performance Award will be subject to such terms and conditions consistent with the 2021 Equity Compensation Plan as determined by the administrator and as set forth in an Award agreement. The administrator will set performance targets at their discretion which, depending on the extent to which they are met, will determine the number of Performance Awards that will be paid out to the Participants and may attach to such Performance Awards one or more restrictions. Performance targets may be based upon, without limitation, Company-wide, divisional, and/or individual performance.

*Section 409A of the Code*

Awards under the 2021 Equity Compensation Plan are intended either to be exempt from the rules of Section 409A of the Code or to satisfy those rules and shall be construed accordingly. However, we will not be liable to any Participant or other holder of an Award with respect to any Award-related adverse tax consequences arising under Section 409A or other provision of the Code.

*Section 422 of the Code*

The 2021 Equity Compensation Plan provides for the grant of incentive stock options within the meaning Section 422 of the Code.

*Awards Granted*

As of the date of this Annual Report, there have been options to purchase 20,000 shares of common stock granted under the 2021 Equity Compensation Plan.

**Director Compensation**

In April 2024, we paid an aggregate of $9,000 to the then current three members of the Board. There has been no other compensation paid to the members of the Board since our inception for services rendered as a director.

On September 27, 2024, we entered into Director Agreements with each of our directors that provide compensation to our directors of (a) cash compensation of $5,000 per quarter and (b) options to purchase 20,000 shares of common stock, which shall vest in four equal installments of 5,000 shares per calendar quarter, paid in arrears, with the first installment vesting on December 31, 2024. The options have a term of five to ten years and exercise prices ranging from $2.00 to $2.20, pursuant to our 2021 Omnibus Equity Compensation Plan. In June 2025, the Director Agreements were amended to replace the $5,000 of cash compensation with $5,000 worth of shares of common stock.

**<u>Item 4. Security Ownership of Management and Certain Securityholders</u>**

As of the date of this Annual Report, there are 31,776,246 shares of our common stock outstanding. The following table sets forth the beneficial ownership of our common stock as the date of this Annual Report:

● each of our directors;

● each of our named executive officers;

● all of our directors and executive officers as a group; and

● each person known by us to be the beneficial owner of 10% or more of our outstanding common stock.

We have determined beneficial ownership in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities. In addition, the rules include shares of common stock issuable pursuant to the exercise of stock options and warrants that are either immediately exercisable or exercisable on or before the date which is 60 days after the date of this Annual Report. These shares are deemed to be outstanding and beneficially owned by the person holding those options and warrants for the purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them, subject to applicable community property laws.

---

| | | |
|:---|:---|:---|
| | **Amount and Nature of Beneficial**<br> **Ownership** | **Amount and Nature of Beneficial**<br> **Ownership** |
| <br>**Name and Address of Beneficial Owner** | **Shares**<br> **Owned** | **Percentage of the Class** |
| **Directors and Named Executive Officers:<sup>(1)</sup>** |  |  |
| Steven Luna, *Chief Executive Officer and Director* (3) | 4107206 | 12.9% |
| Jason LeBlanc, *Chief Operations Officer and Director* (3) | 3666154 | 11.5% |
| Vanessa Luna, *Executive Vice President and Chairperson of the Board* (2)(3) | 4352206 | 13.7% |
| All directors and executive officers as a group (three persons) | 12125566 | 38.2% |
| **5% of More Holders:** |  |  |
| Sky Financial &Intelligence, LLC(4) | 4011274 | 12.6% |
| Richard Nagle, Individual Control Person | 3745323 | 11.8% |

---

\*Less than 1%.

&nbsp;&nbsp;&nbsp;&nbsp;(1) The
 address for all of the officers and directors is 5940 S. Rainbow Blvd., Las Vegas, NV 89118.

(2) Includes
 600,000 shares of common stock owned by Luna Consultant Group, LLC.

(3) Includes
 4,000 shares issuable upon exercise of options exercisable within 60 days.

(4) Includes
 1,000,000 shares of common stock underlying convertible debt as of December 31, 2025, , which is subject to a 9.99% ownership blocker
 in the aggregate.

(5) The
 address of Sky Financial & Intelligence, LLC is 7611 Phoenix Peak Street Las Vegas, NV, 89166 and its beneficial owner is Kenneth
 Haller, its sole member.

**<u>Item 5. Interest of Management and Others in Certain Transactions</u>**

Since January 1, 2024, we had the following transactions with related parties:

**Family Relationship**

Our Chief Executive Officer, Steven Luna, and Executive Vice President, Vanessa Luna are brother and sister.

**RELATED PARTY CONVERTIBLE PROMISSORY NOTES** 

On August 13, 2021, the Company issued a convertible promissory note to Sky Financial & Intelligence, LLC ("Sky Financial") with a principal amount of $250,000. The note bore an interest at 15% per annum and matured on August, 2022. The note and accrued interest are convertible at the option of Sky Financial at $0.50 per share but would mandatorily convert to common stock at the same price upon an up list to a national exchange and will have piggyback registration rights to register the shares of common stock underlying the conversion of the notes. In August, 2022, upon maturity of the $250,000 convertible promissory note, the Company paid the accrued interest to Sky Financial and extended the term of the promissory note until August 13, 2023. In August, 2023, upon maturity of the $250,000 convertible promissory note, the company converted the principal balance on the note into 1,000,000 shares of common stock and paid the accrued interest on the note, pursuant to the terms in the agreement.

On December 31, 2021, the Company issued a convertible promissory note to Sky Financial with a principal amount of $350,000. The note bore an interest at a rate of 15% per annum, matured on December 31, 2022. On December 31, 2022 upon maturity of the $350,000 convertible promissory note, the Company extended the term of the promissory note until December 31, 2024 at the same rate of interest. The notes and accrued interest are convertible at the option of Sky Financial at $0.10 per share but will mandatorily convert to common stock at the same price upon an up list to a national exchange and will have piggyback registration rights to register the shares of common stock underlying the conversion of the notes. In October, 2023 the company paid $200,000 of principal and accrued interest and converted the remaining principal of the $350,000 convertible promissory into 513,040 shares of common stock, pursuant to the terms in the agreement.

On March 29, 2022, the Company issued a convertible promissory note to Sky Financial with a principal amount of $1,000,000. The note bore an interest at a rate of 15% per annum and matured on March 29, 2024. In 2023, the company agreed to extend the term of the promissory note until March 29, 2025, at the same rate of interest. As consideration for the extension, the Company issued 2,000,000 shares on 17-month warrants exercisable at $0.125 per share. On March 29, 2024, the Company extended the term of the $1,000,000 promissory note until March 29, 2025, at the same rate of interest. In August, 2024, the Company issued 300 000 shares of its common stock valued at $3,000,000 to settle interest on the debt payable in the amount of $300,000.

On May 21, 2025, the Company extended the term of the $1,000,000 promissory note until March 29, 2027. In exchange for the extension and for no interest to accrue over the extended term, the Company issued 2,400,000 shares of common stock valued at $24,000,000, which is recorded as related party stock compensation expense in general and administrative expenses

Sky Financial's interest expense and accrued interest for the twelve months ended December 31, 2025 were $0 and $0, respectively. Sky Financial's interest expense and accrued interest in connection with these notes for the year ended December 31, 2024 was $117,930 and $0, respectively.

As Sky Financial's convertible promissory note does not accrue interest, imputed interest was calculated and for the twelve months ended December 31, 2025 was $242,214. Imputed interest for the year ended December 31, 2024 was $90,740.

On July 2, 2025 and November 14, 2025, the Company issued convertible notes in the amounts of $25,000 and $15,000, respectively, to Luna Consultant Group, of which our Chairperson Vanessa Luna serves as the President. The notes bear interest at 15% per annum. Interest expense and accrued interest associated with these convertible notes for the year ended December 31, 2025 and 2024 was $2,135 and $2,135, respectively.

On January 14, 2026, the Company issued a convertible note in the amount of $10,000 to Luna Consultant Group, of which our Chairperson Vanessa Luna serves as the President. The note bears interest at 15% per annum, matures six months from the date of the note, and is convertible into shares of the Company's common stock at a 50% discount to the "Qualified Offering Price," as defined therein.

 **

***Solyco Capital Bridge Loan***

 **

Mr. Culver, a member of our board of directors is a General Partner and Investor with Solyco Advisors, a private equity investment firm based in Detroit, Michigan. Solyco Advisors is the general partner of Solyco CAC, LLC ("Solyco").

On August 2, 2024, we borrowed $1 million to fund our working capital needs pursuant to the Working Capital Loan. The promissory note has an interest rate, as amended, of 14% and matured on December 31, 2025.

In connection with the Working Capital Loan, we also issued to Solyco the Warrant to purchase up to 200,000 shares of common stock at an exercise price equal to the lower of: (i) $5.00 or (ii) a 50% discount to the "Qualified Offering Price," as defined therein, and a term of five years.

On January 28, 2025, the Company entered into a subscription agreement with Solyco, pursuant to which the Company agreed to issue a $500,000 convertible promissory note (the "Solyco Convertible Note") and a warrant to Solyco. The Solyco Convertible Note bears an interest rate, as amended, of 18% per annum, matured on December 31, 2025 and is convertible into shares of the Company's common stock at a 50% discount to the "Qualified Offering Price," as defined therein. The accompanying warrant entitles Solyco to purchase up to 100,000 shares of common stock at an exercise price of the lower of (i) $5.00 per share, or (ii) a 50% discount to the "Qualified Offering Price," as defined therein (the "Solyco Warrant Exercise Price"), and is exercisable through January 27, 2030. In further consideration of the Working Capital Loan and the Solyco Convertible Note, Solyco is also entitled but not required to designate one member of the Company's Board of Directors and to appoint a non-voting board observer until the Solyco Convertible Note and the Working Capital Loan are repaid and Solyco ceases to be a shareholder of the Company. The agreement includes customary representations and warranties and standard indemnification provisions. A copy of the Solyco Convertible Note and the accompanying subscription agreement and warrant is filed as Exhibit 6.27 this Annual Report.

On July 22, 2025, the Company entered into a subscription agreement with Solyco, pursuant to which the Company agreed to issue a $300,000 convertible promissory note (the "Solyco Convertible Note") and a warrant to Solyco. The Solyco Convertible Note bears an interest rate, as amended, of 18% per annum, matures on April 22, 2026 and is convertible into shares of the Company's common stock at a 50% discount to the "Qualified Offering Price," as defined therein. The accompanying warrant entitles Solyco to purchase up to 60,000 shares of common stock at an exercise price of the lower of (i) $5.00 per share, or (ii) a 50% discount to the "Qualified Offering Price," as defined therein (the "Solyco Warrant Exercise Price"), and is exercisable through July 22, 2030.

**Shares Issued to Related Parties for Services**

During the first three quarters of 2024, the Company issued an aggregate of 2,250,000 shares of common stock to our executive officers, including Jason LeBlanc, , Steven Luna and Vanessa Luna, in exchange for their services, all of which were voluntarily returned back to the pursuant to the respective Amendment to the A&R Employment Agreement. Please also see our discussion under "Executive and Director Compensation—Employment Agreements with our Named Executive Officers—Amendment to A&R Employment Agreements" for more details.

**<u>Item 6. Other Information</u>**

**Lendspark Financing**

On March 13, 2026, the Company entered into a Securities Purchase Agreement with Lendspark Corporation ("Lendspark"), pursuant to which the Company agreed to issue a secured promissory note with a principal amount of $550,000, which includes an original issue discount of $50,000, resulting in net proceeds to the Company of $500,000 (the "Lendspark Note"). The Lendspark Note bears a one-time interest charge of 12% on the principal amount ($66,000), which is earned in full as of the issue date. The Lendspark Note matures on March 13, 2027 and is convertible into shares of the Company's common stock at a conversion price equal to 65% of the lowest traded price of the common stock during the ten trading days immediately preceding the conversion date. The Company also issued to Lendspark a warrant to purchase 166,667 shares of common stock at an exercise price of $5.00 per share (the "Lendspark Warrant"). The Lendspark Note is secured by all assets of the Company pursuant to a Security Agreement entered into on the same date.

Lendspark has the right, at its sole discretion, during the one-year period following the date of the Securities Purchase Agreement, to provide additional funding of up to $500,000 on the same terms as the Lendspark Note. The Securities Purchase Agreement includes customary representations, warranties, and covenants, as well as piggy-back registration rights for shares issuable upon conversion of the Lendspark Note and exercise of the Lendspark Warrant. Copies of the Securities Purchase Agreement, Secured Promissory Note, Security Agreement, and Common Stock Purchase Warrant are filed as Exhibits 6.28 through 6.31 to this Annual Report.

**<u>Item 7. Financial Statements</u>**

**INDEX TO FINANCIAL STATEMENTS AND<br> FINANCIAL STATEMENTS**

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| | |
|:---|:---|
|  | **Page** |
| [Report of Independent Registered Public Accounting Firm](#sw_010) (PCAOB ID No. 2738) | **F-2** |
| [Balance Sheets as of December 31, 2025 and 2024](#ds_001) | **F-3** |
| [Statements of Operations for the years ended December 31, 2025 and 2024](#ds_002) | **F-4** |
| [Statements of Stockholders' Deficit for the years ended December 31, 2025 and 2024](#ds_004) | **F-5** |
| [Statements of Cash Flows for the years ended December 31, 2025 and 2024](#ds_003) | **F-6** |
| [Notes to the Financial Statements](#ds_005) | **F-7** |

---

![](partii_005.jpg)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Alternative Ballistics Corporation, Inc.

 **Opinion on the Financial Statements** 

We have audited the accompanying balance sheets of Alternative Ballistics Corporation. (the Company) as of December 31, 2025 and 2024, and the related statements of operations, statements of stockholders' deficit, and cash flows for the two years period ended December 31, 2025, 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 in the two years period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

 **The Company's Ability to Continue as a Going Concern** 

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the accompanying financial statements, the Company has not yet generated any significant revenue, has incurred recurring losses from operations, generated negative cash flows from operating activities and had an accumulated deficit that raise substantial doubt about the Company's ability to continue as a going concern. Management's evaluation of the events and conditions and management's plans in regarding these matters are also described in Note 1. 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. 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.

 **Critical Audit Matter** 

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

 **Going Concern** 

As discussed in Note 1, the Company has not yet generated any significant revenue, has incurred recurring losses from operations, generated negative cash flows from operating activities and had an accumulated deficit that raise substantial doubt about the Company's ability to continue as a going concern. Auditing management's evaluation of a going concern can be a significant judgment given the fact that the Company uses management estimates on future revenues and expenses, which are difficult to substantiate.

We evaluated the appropriateness of the going concern, we examined and evaluated the financial information along with management's plans to mitigate the going concern and management's disclosure on going concern.

/s/ M&K CPAS, PLLC

We have served as the Company's auditor since 2021. The Woodlands, Texas

April 30, 2026

**Alternative Ballistics Corporation <br> Balance Sheets**

---

| | | |
|:---|:---|:---|
|  | December 31,<br>2025 | December 31,<br>2024 |
| ASSETS |  |  |
| Current assets |  |  |
| &nbsp;&nbsp;&nbsp; Cash | $4116 | $234907 |
| &nbsp;&nbsp;&nbsp; Inventory | 20327 | 25058 |
| &nbsp;&nbsp;&nbsp; Prepaid expenses & Other current assets | 23449 | 21006 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current assets | 47892 | 280971 |
| Other Assets |  |  |
| &nbsp;&nbsp;&nbsp; Fixed Assets, net | 5078 | 7645 |
| &nbsp;&nbsp;&nbsp; ROU Asset, net | - | 62812 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total other assets | 5078 | 70457 |
| Total assets | $52970 | $351428 |
| LIABILITIES AND STOCKHOLDERS' DEFICIT |  |  |
| Current liabilities |  |  |
| &nbsp;&nbsp;&nbsp; Accounts payable | 527835 | 162873 |
| &nbsp;&nbsp;&nbsp; Accrued liabilities | 551281 | 755269 |
| &nbsp;&nbsp;&nbsp; Lease liability |  | 64306 |
| &nbsp;&nbsp;&nbsp; Interest payable | 307275 | 38530 |
| &nbsp;&nbsp;&nbsp; Convertible notes payable - short term, net of debt discount | 1727633 | 751268 |
| &nbsp;&nbsp;&nbsp; Related party convertible notes payable | 40000 | 1000000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current liabilities | 3154024 | 2772246 |
| &nbsp;&nbsp;&nbsp; Related party convertible notes payable - long term | 1000000 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total long-term liabilities | 1000000 | - |
| Total liabilities | 4154024 | 2772246 |
| Stockholders' deficit |  |  |
| &nbsp;&nbsp;&nbsp; Preferred stock, $0.001 par value, 400,000 shares authorized, 400,000 and 400,000 shares issued and outstanding as of December 31, 2025 and December 31, 2023, respectively | 400 | 400 |
| &nbsp;&nbsp;&nbsp; Common stock, $0.001 par value, 50,000,000 shares authorized, 31,776,245 and 27,942,806 shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively | 31787 | 27953 |
| &nbsp;&nbsp;&nbsp; Additional paid in capital | 95447597 | 56077950 |
| &nbsp;&nbsp;&nbsp; Subscription payable | 50000 |  |
| &nbsp;&nbsp;&nbsp; Accumulated deficit | (99630838) | (58527121) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total stockholders' deficit | (4101054) | (2420818) |
| Total liabilities and stockholders' deficit | $52970 | $351428 |

---

**Alternative Ballistics Corporation**

**Statements of Operations**

---

| | | |
|:---|:---|:---|
|  | For the years ended | For the years ended |
|  | December 31, 2025 | December 31, 2024 |
| Revenue | $7550 | $7000 |
| Less: Cost of Sales | 2244 | 1150 |
| Gross Margin | 5306 | 5850 |
| Operating expenses |  |  |
| &nbsp;&nbsp;&nbsp; General and Administrative | 39433273 | 14259711 |
| &nbsp;&nbsp;&nbsp; Sales and marketing | 499400 | 462478 |
| &nbsp;&nbsp;&nbsp; Professional fees | 392275 | 348931 |
| &nbsp;&nbsp;&nbsp; Research and development | 2610 | 10597 |
| Total operating expenses | 40327558 | 15081717 |
| &nbsp;&nbsp;&nbsp; Loss from operations | (40322252) | (15075867) |
| &nbsp;&nbsp;&nbsp; Other expenses |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest expense | (781465) | (247837) |
| Total other expenses | (781465) | (247837) |
| Net loss before tax provision | (41103717) | (15323704) |
| Tax provision | - | - |
| Net loss | $(41103717) | $(15323704) |
| Net loss per common share - basic and diluted | $(1.35) | $(0.56) |
| Weighted average number of common shares outstanding - basic and diluted | 30370501 | 27226816 |

---

**Alternative Ballistics Corporation <br> Statements of Stockholders' Deficit**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Series A Preferred Stock** | **Series A Preferred Stock** | **Common Stock** | **Common Stock** | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Additional Paid-in**<br> **Capital** | <br>**Subscriptions** <br> **Payable** | <br> **Accumulated** <br> **Deficit** | **Stockholder's**<br> **Deficit** |
| **Balance, December 31, 2023** | 400000 | $400 | 26545156 | $26545 | $41984610 | $123334 | $(43203417) | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1068528) |
| Shares issued for cash, net of offering cost |  |  | 24550 | 32 | 245468 |  |  | 245500 |
| Shares issued for services |  |  | 1008100 | 1011 | 10079989 | (83334) |  | 9997666 |
| Forgiveness of stock payable, related party |  |  |  |  | 40000 | (40000) |  |  |
| Shares issued on conversion of Notes Payable, related party |  |  | 300000 | 300 | 299700 |  |  | 300000 |
| Shares issued on warrant exercise |  |  | 65000 | 65 | 137435 |  |  | 137500 |
| Fair value of warrants issued for service |  |  |  |  | 2638287 |  |  | 2638287 |
| Fair value of warrants issued on debt discount |  |  |  |  | 561721 |  |  | 561721 |
| Imputed interest on notes payable - related party |  |  |  |  | 90740 |  |  | 90740 |
| Net loss | - | - | - | - | - | - | (15323704) | (15323704) |
| **Balance, December 31, 2024** | 400000 | $400 | 27942806 | $27953 | $56077950 | $- | $(58527121) | $(2420818) |
| Shares issued for cash, net of offering cost |  |  | 8850 | 9 | 88491 |  |  | 88500 |
| Shares issued for services |  |  | 65700 | 66 | 656934 | 50000 |  | 707000 |
| Shares issued for conversion of deferred compensation |  |  | 547889 | 548 | 5478324 |  |  | 5478872 |
| Shares issued for services, related party |  |  | 811000 | 811 | 8109189 |  |  | 8110000 |
| Shares issued for extension of note payable-related party |  |  | 2400000 | 2400 | 23997600 |  |  | 24000000 |
| Imputed interest on notes payable - related party |  |  |  |  | 242214 |  |  | 242214 |
| Stock compensation for stock options |  |  |  |  | 89769 |  |  | 89769 |
| Fair value of warrants issued on debt discount |  |  |  |  | 461723 |  |  | 707126 |
| Financing costs from revaluation of warrants |  |  |  |  | 245403 |  |  |  |
| Net loss | - | - | - | - | - | - | (41103717) | (41103717) |
| **Balance, December 31, 2025** | 400000 | $400 | 31776245 | $31787 | $95447597 | $50000 | $(99630838) | $(4101054) |

---

**Alternative Ballistics Corporation <br> Statements of Cash flows**

---

| | | |
|:---|:---|:---|
|  | For the years ended | For the years ended |
|  | December 31, 2025 | December 31, 2024 |
| Cash Flows from Operating Activities |  |  |
| &nbsp;&nbsp;&nbsp; Net loss | $(41103717) | $(15323704) |
| &nbsp;&nbsp;&nbsp; Stock based compensation | 796769 | 10081000 |
| &nbsp;&nbsp;&nbsp; Stock based compensation, related party | 8110000 |  |
| &nbsp;&nbsp;&nbsp; Stock based compensation for extension of convertible note payable, related party | 24000000 |  |
| &nbsp;&nbsp;&nbsp; Stock based compensation, loss on conversion of deferred compensation | 4820937 |  |
| &nbsp;&nbsp;&nbsp; Amortization of debt issuance costs | 638088 | 312989 |
| &nbsp;&nbsp;&nbsp; Financing costs from revaluation of warrants | 245403 |  |
| &nbsp;&nbsp;&nbsp; Stock based compensation - warrants |  | 2638287 |
| &nbsp;&nbsp;&nbsp; Gain on forgiveness on stock payable |  | (83334) |
| &nbsp;&nbsp;&nbsp; Loss on disposal of fixed assets | 800 |  |
| &nbsp;&nbsp;&nbsp; ROU asset | 62812 | (62812) |
| &nbsp;&nbsp;&nbsp; ROU liability | (64306) | 64306 |
| &nbsp;&nbsp;&nbsp; Depreciation | 3458 | 11771 |
| &nbsp;&nbsp;&nbsp; Imputed interest | 242214 | 90740 |
| Changes in assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp; Prepaid expenses and other current assets | (2443) | (16056) |
| &nbsp;&nbsp;&nbsp; Inventory | 4731 | 7113 |
| &nbsp;&nbsp;&nbsp; Accounts payable and accrued liabilities | 1087654 | 688248 |
| &nbsp;&nbsp;&nbsp; Related party interest payable | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash used in operating activities | (1157600) | (1591452) |
| Cash Flows from Investing Activities: |  |  |
| &nbsp;&nbsp;&nbsp; Purchase of fixed assets | (1691) | (1798) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash used in investing activities | (1691) | (1798) |
| Cash Flows from Financing Activities: |  |  |
| &nbsp;&nbsp;&nbsp; Warrants exercised for cash |  | 137500 |
| &nbsp;&nbsp;&nbsp; Proceeds from convertible notes payable – related party | 40000 |  |
| &nbsp;&nbsp;&nbsp; Proceeds from convertible notes payable | 800000 | 1000000 |
| &nbsp;&nbsp;&nbsp; Proceeds from sale of common stock | 88500 | 245500 |
| &nbsp;&nbsp;&nbsp; Principal payments on debt – interest | - | (116488) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash provided by financing activities | 928500 | 1266512 |
| Net (decrease) increase in cash | (230791) | (326738) |
| Cash, beginning of period | 234907 | 561645 |
| Cash, end of period | $4116 | $234907 |
| Supplemental disclosure of cash flow information |  |  |
| &nbsp;&nbsp;&nbsp; Cash paid for interest | $25104 | $116488 |
| **SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:** |  |  |
| Loans payable – related party settled with stock | $- | $300000 |
| Deferred compensation exchanged for stock | $657935 | $- |
| Forgiveness of stock payable – related party | $- | $40000 |
| Warrant issued on convertible note payable (debt discount) | $461723 | $561721 |

---

**1.** **ORGANIZATION AND BUSINESS OPERATIONS** 

Alternative Ballistics Corporation (the "Company") was incorporated in the State of Nevada on August 27, 2020. Our offices are located at 5940 S. Rainbow Blvd, Las Vegas, NV 89118.

Alternative Ballistics Corporation is a next generation less-lethal technology company. It is a new venture, which specializes in the production and distribution of a less-lethal impact munition known as "The Alternative® - to Lethal Force" designed for the law enforcement industry.

*Basis of Presentation*

The accompanying financial statements represent the results of operations, financial position and cash flows of Alternative Ballistics Corporation. prepared on the accrual basis of accounting and conform to accounting principles generally accepted in the United States of America.

 

*Going Concern*

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Management evaluated all relevant conditions and events that are reasonably known or reasonably knowable, in the aggregate, as of the date the financial statements are issued and determined that substantial doubt exists about the Company's ability to continue as a going concern. The Company's ability to continue as a going concern is dependent on the Company's ability to generate revenues and raise capital. The Company has not generated sufficient revenues to provide sufficient cash flows to enable the Company to finance its operations internally. As of December 31, 2025 and 2024, the Company had $4,116 and $234,907 cash on hand, respectively. At December 31, 2025 and 2024, the Company has an accumulated deficit of $99,580,838 and $58,527,121, respectively. For the twelve months ended December 31, 2025, the Company had a net loss and cash used in operations of $41,053,717 and $1,157,600, respectively. For the twelve months ended December 31, 2024, the Company had a net loss and cash used in operations of $15,323,704 and $1,591,452, respectively. These factors raise substantial doubt about the Company's ability to continue as a going concern.

Over the next twelve months management intends to raise additional capital through debt and equity financing in order to promote and sell its products. If the Company fails to obtain additional capital the Company may be forced to scale back or discontinue its operations. However, there is no guarantee the Company will raise capital to continue operations. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

**2.** **SIGNIFICANT ACCOUNTING POLICIES** 

*Basis of Presentation*

The accompanying financial statements represent the results of operations, financial position and cash flows of Alternative Ballistics Corporation. prepared on the accrual basis of accounting and conform to accounting principles generally accepted in the United States of America.

On August 8, 2025, the Company effected a 1-for-5 reverse stock split of its common and preferred stock. As a result, every 5 shares of issued and outstanding common and preferred stock were automatically combined into 1 share of common or preferred stock. All share and per-share amounts in the financial statements and accompanying notes have been retroactively adjusted to reflect the reverse stock split.

*Reclassifications*

Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations.

*Use of Estimates*

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and also requires disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

 

*Fair Value of Financial Instruments*

The Company measures fair value in accordance with Accounting Standards Codification ("ASC") 820 – Fair Value Measurements. ASC 820 defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurements. ASC 820 establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by ASC 820 are:

Level 1 — Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2 — Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument's anticipated life.

Level 3 — Inputs reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Valuation of instruments includes unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

As defined by ASC 820, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale, which was further clarified as the price that would be received to sell an asset or paid to transfer a liability ("an exit price") in an orderly transaction between market participants at the measurement date.

The reported fair values for financial instruments that use Level 2 and Level 3 inputs to determine fair value are based on a variety of factors and assumptions. Accordingly, certain fair values may not represent actual values of the Company's financial instruments that could have been realized as of December 31, 205 and 2024 or that will be recognized in the future, and do not include expenses that could be incurred in an actual settlement. The carrying amounts of the Company's financial assets and liabilities, such as cash, prepaid expenses, inventory, accounts payable and accrued liabilities, and related party and third-party notes payables approximate fair value due to their relatively short maturities. The Company's notes payable to related parties approximates the fair value of such instrument based upon management's best estimate of terms that would be available to the Company for similar financial arrangements at December 31, 2025 and 2024.

The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs.

 

 

*Related parties*

The Company follows ASC 850, "Related Party Disclosures" for reporting activities with related parties. A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.

*Impairment of Long-Lived Assets*

Long-lived assets, including intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. In such situations, long-lived assets are considered impaired when future undiscounted cash flows resulting the use of the asset and its eventual disposition are less than the asset's carrying amount. In such situations, the asset is written down to the present value of the estimated future cash flows. Factors that are considered when evaluating long-lived assets for impairment include a current expectation that it is more likely than not that the long-lived asset will be sold significantly before the end of its useful life, a significant decrease in the market price of the long-lived asset, and a change in the extent of manner in which the long-lived asset is being used. Based on management's assessment there were no impairments to its long-lived assets at December 31, 2025 and 2024.

 

*Property and Equipment*

Property and equipment are recorded at cost for purchases over $500 and depreciated using the straight-line method over the estimated useful lives ranging from three to ten years. The Company capitalizes direct costs associated with property and equipment in accordance with ASC 360 – Property, Plant, and Equipment. Leasehold improvements are amortized on a straight-line basis over the shorter of their useful life or the term of the related lease. Expenditures for ordinary repairs and maintenance are expensed as incurred.

 

*Advertising*

The Company expenses the cost of advertising, including promotional expenses, as incurred. Advertising expenses for the twelve months ended December 31, 2025, and 2024 were $139,764 and $197,763, respectively.

*Research and Development*

Costs related to the conceptual formulation and design of products and processes are charged to Research and Development as incurred. Development of a product is deemed complete when it is qualified through reviews and tests for performance and reliability. Subsequent to product qualification, product costs are included in cost of goods sold. Research and Development expenses for the twelve months ended December 31, 2025, and 2024 were $2,610 and $10,597, respectively.

*Stock-based Compensation*

The Company recognizes stock-based compensation issued to employees in accordance with ASC 718 – Compensation: Stock Compensation, based on the fair value of the equity instrument in exchange for employee or consulting services and the resulting recognition of compensation expense.

*Income Taxes*

The Company accounts for its income taxes in accordance with FASB Codification Topic ASC 740-10, "Income Taxes", which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered 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.

*Concentrations of Credit Risk and Financial Instruments*

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash.

The Company's cash balances are placed at financial institutions, which at times, may exceed federally insured limits. Generally, these deposits may be redeemed upon demand and, therefore, bear minimal risk. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risk on cash

*Basic and Diluted Loss per Share*

The Company follows ASC Topic 260 to account for the earnings per share. Basic earnings per common share ("EPS") calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.

The Company reports earnings (loss) per share in accordance with FASB Codification Topic ASC 260-10 "Earnings Per Share", Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted average number of common shares available. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted earnings (loss) per share has not been presented for the years ending December 31, 2025 and 2024, respectively, since the effect of the assumed exercise of options and warrants to purchase common shares (common stock equivalents) would have an anti-dilutive effect. There are 3,527,275 and 19,016,807 additional shares issuable in connection with outstanding options, warrants, stock payable and convertible debts as of December 31, 2025 and 2024, respectively.

*Recent Accounting Pronouncements*

In November 2024, the FASB issued Accounting Standard Update No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"). This standard requires additional disclosures over certain expenses, including purchases of inventory, employee compensation, depreciation, intangible asset amortization, and other specific expense categories. This standard also requires disclosure of the total amount of selling expenses and the Company's definition of selling expenses. This update is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. We are evaluating the impact this update will have on our annual disclosures; however, there was no impact our financial condition, results of operations, or cash flows.

*Reclassifications of Prior Period Amounts*

 

Certain prior period amounts have been reclassified within operating expenses to conform to the current period presentation. These changes were made to better reflect the Company's cost structure and improve consistency in financial reporting. The reclassifications had no effect on previously reported total operating expenses, net income (loss), total assets, or shareholders' equity.

**3.** **BUSINESS SEGMENT INFORMATION** 

Our flagship product, The Alternative®, is currently the only offering in our reportable segment focused on less-lethal technologies. This segment encompasses all of the Company's global efforts in promoting and selling The Alternative® to domestic and international professional markets, including law enforcement, military, and private security end users.

This is a niche market that offers various tools and options for law enforcement, military, and security personnel to deploy types of ammunition designed to temporarily incapacitate, stun, or cause temporary discomfort without penetrating the body. Our product stands out as the only less-lethal technology available that can be carried by officers, allowing them to instantly and temporarily convert their service weapon into a less-lethal kinetic device without the need to transition to a completely separate platform.

The accounting policies for the less-lethal technologies segment align with those outlined in the summary of significant accounting policies. The Chief Executive Officer is the Chief Operating Decision Maker ("CODM") and assesses the performance of this segment and allocates resources based on net income, which is reflected in the income statement as total income. The measure of segment assets is represented as total assets on the balance sheet.

The CODM evaluates the income generated from segment assets, known as return on assets, using net income. This information assists the CODM in deciding whether to reinvest profits into the less lethal technologies segment or allocate resources to other areas of the business, such as acquisitions or dividend payments.

Net income is also utilized to monitor the difference between budgeted and actual results, offering insights into financial performance and guiding any necessary corrective actions. Additionally, the CODM employs net income for competitive analysis by comparing the performance of the less lethal technologies segment against competitors.

This combination of competitive analysis and budget-to-actual monitoring is crucial for assessing the segment's performance and determining management compensation.

The company does not engage in any intra-entity sales or transfers.

The Company has identified one reportable segment: the less lethal technologies segment. The less lethal technologies segment primarily generates revenue in North America, and the company manages its sole product sales and associated expenses on a total basis.

**4.** **PREPAID EXPENSES AND OTHER CURRENT ASSETS** 

As of December 31, 2025, prepaid expenses and other current assets consist of accounts receivable of $5,578, prepaid insurance of $6,915 and a lease deposit of $10,956.

As of December 31, 2024, prepaid expenses and other current assets consist of prepaid trade shows of $5,050, lease deposit of $10,956, and receivables from deposits for stock purchases of $5,000 held at the Company's securities offering subscription platform which had not been released to the Company..

**5.** **PROPERTY AND EQUIPMENT, NET** 

Property and equipment as of December 31, 2025 and 2024 comprise of the following:

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31,** | **December 31,** | **Estimated Useful Lives** |
|  | **2025** | **2024** |  |
| Tooling and molds | $86711 | $86711 | 10 years |
| Computer equipment | 10956 | 9265 | 3 years |
| Furniture and fixtures | 2844 | 3964 | 5 years |
|  | 100511 | 99940 |  |
| Less accumulated deprecation | (95433) | (92295) |  |
| Total property and equipment, net | $5078 | $7645 |  |

---

Depreciation expense for the twelve months ended December 31, 2025 and 2024 was $3,458 and $11,771, respectively.

**6.** **LEASES** 

On January 1, 2024, the Company entered into a two-year non-cancellable property lease, for 996 square feet of office space, at a monthly lease term of $5,229 with a second year monthly escalation to $5,478. Included in the lease are utilities and property taxes.

On May 23, 2025 the company entered into a one-year lease for an office space in Las Vegas, NV, at $2,152 a month for the term August 1, 2025-July 31, 2025..

Supplemental balance sheet information related to leases was as follows:

---

| | | |
|:---|:---|:---|
|  | For the Year Ended | For the Year Ended |
|  | December 31, | December 31, |
| Operating lease: | 2025 | 2024 |
| Operating lease assets | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | $62.812 |
| Current portion of operating lease liabilities | $- | $64306 |
| Noncurrent operating lease liabilities | - | - |
| Total operating lease liability | $- | $64.306 |
| Weighted average remaining lease term |  |  |
| Operating leases (years) |  | 1 |
| Weighted average discount rate: |  | 4.08% |

---

Supplemental cash flow and other information related to operating leases was as follows:

---

| | | |
|:---|:---|:---|
|  | For the Twelve Months Ended | For the Twelve Months Ended |
|  | December 31, | December 31, |
|  | 2025 | 2024 |
| Cash paid for amounts included in the measurement of lease liabilities: |  |  |
| Operating cash flows used for operating leases | $64306 | $64242 |
| Total operating lease liabilities | $- | $64306 |

---

Our anticipated future lease commitments on a calendar year basis in US dollars, under non-cancelable operating leases are as follows:

---

| | |
|:---|:---|
|  | Minimum |
| Year Ending | Lease |
| December 31, | Commitments |
| 2025 | 15064 |
| Total future minimum lease liabilities | $15064 |

---

**7.** **CONVERTIBLE NOTES** 

The Company has the following notes outstanding:

---

| | | |
|:---|:---|:---|
|  | **December 31,** <br> **2025**  | **December 31, <br> 2024**  |
| Note payable18% interest, due December 31, 2025 | $1000000 | $1000000 |
| Note payable, 18% interest, due December 31, 2025 | 500000 |  |
| Note payable, 18% interest, due April 22, 2026 | 300000 |  |
| Discount on Note Payable | (72367) | (248732) |
| Note Payable (Net of Discount) | $1727633 | $751268 |

---

On August 2, 2024, the Company issued a convertible promissory note with a principal amount of $1,000,000. As amended on July 22, 2025 and September 2, 2025, the notes bear interest at a rate of 18% per annum and the maturity date was modified to December 31, 2025, respectively. The amendment on July 22, 2025 modified the conversion rate to 50% discount of a Qualified Offering Price. Also, the amendment modified the exercise price of the warrants issued with these convertible notes to the lower of (i) $5.00 per share or (ii) 50% discount to the Qualified Offering Price The proceeds received were allocated between the convertible note and warrants on a relative fair value basis. From the initial agreement and the amendments, the aggregate estimated value of the warrants, using the Black-Scholes Pricing Model, based on a weighted average volatility rate of 70.2% and a weighted average call option value of $1.282, was $1,281,598. The warrants resulted in a debt discount of $248,732, which was fully amortized by the end of 2025 using a straight-line method, which approximates the effective interest method.

On January 28, 2025 the Company issued a convertible promissory note with a principal amount of $500,000. As amended on July 22, 2025 and September 2, 2025, the notes bear interest at a rate of 18% per annum and the maturity date was modified to December 31, 2025, respectively. Furthermore, the amendment on July 22, 2025 modified the conversion rate to 50% discount of a Qualified Offering Price. Also, the amendment modified the exercise price of the warrants issued with these convertible notes to the lower of (i) $5.00 per share or (ii) 50% discount to the Qualified Offering Price. The proceeds received were allocated between the convertible note and warrants on a relative fair value basis. The aggregate estimated value of the warrants using the Black-Scholes Pricing Model, based on a weighted average volatility rate of 70.2% and a weighted average call option value of $1.295, was $647,408. The warrants resulted in a debt discount of $282,118, which was fully amortized during 2025 using the straight-line method, which approximates the effective interest method.

On July 22, 2025 the Company issued a convertible note in the amount of $300,000. The note bears interest at 18% and matures on April 22, 2026. The principal balance and accrued interest are convertible at a conversion price equal to the lower of (i) a 50% discount to the Qualified Offering Price and (ii) any conversion price offered to other noteholders on notes issued subsequent to the date of this convertible note. In connection with the note the company issued warrants convertible to 60,000 shares of common stock. The exercise price of the warrants issued with these convertible notes to the lower of (i) $5.00 per share or (ii) 50% discount to the Qualified Offering Price. The proceeds received were allocated between the convertible note and warrants on a relative fair value basis. The aggregate estimated value of the warrants using the Black-Scholes Pricing Model, based on a weighted average volatility rate of 71.5% and a weighted average call option value of $1.492, was $447,544. The warrants resulted in a debt discount of $179,606. The aggregate debt discounts of $72,367, as of December 31, 2025, are being amortized over the life of the loan using the straight-line method, which approximates the effective interest method.

Interest expense and accrued interest associated with these convertible notes for the twelve months ended December 31, 2025 was $358,545 and $305,115, respectively. Interest expense and accrued interest associated with convertible notes for the twelve months ended December 31, 2024 was $38,530 and $38,350, respectively.

**8.** **CONVERTIBLE NOTES PAYABLE TO RELATED PARTIES** 

The company had the following convertible notes payable related party outstanding:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
| Related Party convertible Note payable, 15% interest, due March 2027 | $1000000 | $1000000 |
| Related Party convertible Note payable, 15% interest, due April 2026 | 25000 |  |
| Related Party convertible Note payable, 15% interest, due August 2026 | 15000 | - |
|  | $1040000 | $1000000 |

---

On March 29, 2022, the Company issued a convertible promissory note with a principal amount of $1,000,000. The note bore an interest at a rate of 15% per annum and matured on March 29, 2024. The notes and accrued interest are convertible at the option of the noteholder at $1.00 per share but will mandatorily convert to common stock at the same price upon an up list to a national exchange and will have piggyback registration rights to register the shares of common stock underlying the conversion of the notes. In 2023, the company agreed to extend the term of the promissory note until March 29, 2025, at the same rate of interest. As consideration for the extension, the Company issued 2,000,000 shares on 17-month warrants exercisable at $0.125 per share. On March 29, 2024, the Company extended the term of the $1,000,000 promissory note until March 29, 2025, at the same rate of interest. In August, 2024, the Company issued 300 000 shares of its common stock valued at $3,000,000 to settle interest on the debt payable in the amount of $300,000.

On May 21, 2025, the Company extended the term of the $1,000,000 promissory note until March 29, 2027. In exchange for the extension and for no interest to accrue over the extended term, the Company issued 2,400,000 shares of common stock valued at $24,000,000, which is recorded as related party stock compensation expense in general and administrative expenses

Related Party interest expense and accrued interest for the twelve months ended December 31, 2025 were $0 and $0, respectively. Related Party interest expense and accrued interest in connection with these notes for the year ended December 31, 2024 was $117,930 and $0, respectively.

As the Related Party convertible promissory note does not accrue interest, imputed interest was calculated and for the twelve months ended December 31, 2025 was $242,214. Imputed interest for the year ended December 31, 2024 was $90,740.

On July 2, 2025 and November 14, 2025, the Company issued convertible notes in the amounts of $25,000 and $15,000, respectively, to another related party. The notes bear interest at 15% per annum The principal balance and accrued interest are convertible at a conversion price equal to the lower of (i) a 50% discount to the Qualified Offering Price and (ii) any conversion price offered to other noteholders on notes issued subsequent to the date of this convertible note. Interest expense and accrued interest associated with these convertible notes for the year ended December 31, 2025 was $2,135 and $2,135, respectively.

**9.** **STOCKHOLDERS' EQUITY** 

*<u>Overview</u>*

The Company is authorized to issue up to 50,000,000 shares of common stock with a par value of $0.001. The Company is also authorized to issue 400,000 and 400,000 shares of preferred stock and Series A preferred stock with a par value of $0.001, respectively.

As of December 31, 2025 and December 31, 2024, there were 31,776,245 and 27,942,806 shares of common stock issued and outstanding, respectively.

As of December 31, 2025 and 2024, there were 400,000 shares of Series A Preferred stock issued and outstanding.

*<u>Stock Warrants</u>*

 

On April 1, 2024, the company issued 300,000 shares on three month warrants exercisable at $2.50 per share. On July 1, 2024, warrants were partially exercised into shares 45,000 shares of common stock at $2.50 per share. The remaining 255,000 warrants were forfeited.

On April 4, 2024, the company extended 400,000 share terms on the 1-year warrants issued on October 3, 2023, to December 31, 2024. On December 31, 2024, the warrant terms were further extended to February 15, 2025 at $1.25 per share.

On July 1, 2024, the company issued 50,000 shares on nine month warrants exercisable at $2.50 per share for services rendered.

On July 11, 2024, warrants were partially exercised into shares 20,000 shares of common stock at $1.25 per share. The remaining 60,000 warrants were forfeited.

On August 2, 2024, the company issued 200,000 shares on 5-year warrants exercisable at $10.00 per share as consideration for a note payable of $1,000,000. On July 22, 2025, the exercise price was amended to the lower of (i) $5.00 per share or (ii) 50% discount to the Qualified Offering Price.

On January 21, 2025, the company extended 200, 0000 share terms on the 5-year warrants issued on August 2, 2024 to January 21, 2030.

On January 28, 2025, the company issued 100,000 shares on 5-year warrants exercisable at $10.00 per share as consideration for a note payable of $500,000. On July 22, 2025 the exercise price was amended to the lower of (i) $5.00 per share or (ii) 50% discount to the Qualified Offering Price.

On July 22, 2025, the company issued 60,000 shares on 5-year warrants exercisable at lower of (i) $5.00 per share or (ii) 50% discount to the Qualified Offering Price per share as consideration for a note payable of $300,000.

The fair value of each warrant grant is estimated on the date of grant recognizing share-based compensation expense over the vesting period based on the estimated number of equity instruments expected to vest and uses Plain Vanilla for calculating the expected terms of options, using the Black-Scholes option pricing model with the following weighted-average assumptions used for grants under the fixed option plan:

---

| | | |
|:---|:---|:---|
|  | December 31, 2025 | December 31, 2024 |
| Average risk-free interest rates | 3.88-3.91% | 3.62 – 5.15% |
| Average expected life (in years) | 4.5-5.0 | 0.4 - 5.0 |
| Volatility | 70.2-71.5% | 62.9 - 68.2% |

---

<u>The following is a summary of activity of outstanding common stock warrants:</u>

---

| | | |
|:---|:---|:---|
|  | Number of Shares | Weighted Average Exercise Price |
| Balance, December 31, 2023 | 2880000 | $0.469 |
| Warrants expired | (715000) | $1.696 |
| Warrants Converted into stock | (65000) | $2.115 |
| Warrants granted and assumed | 550000 | $3.41 |
| Balance, December 31, 2024 | 2650000 | $0.708 |
| Warrants expired | (2450000) | $0.357 |
| Warrants granted and assumed | 160000 | $5.000 |
| Balance, December 31, 2025 | 360.000 | $5.000 |

---

*<u>Stock Options</u>*

On September 20, 2024, the Company granted options to four members of the board of directors. The options expire ten years following issuance and have an exercise price of $10.00. The options vest quarterly and have a total fair value of $102,700. The Company valued the options using the Black-Scholes model with the following key assumptions: fair value stock price, $10.00, Exercise price, $10.00, Term 10 years, Expected term 5 years, Volatility 73%, and Discount rate 3.43% and a dividend yield of 0%.

On September 20, 2024, the Company granted options to a member of the board of directors. The options expire five years following issuance and have an exercise price of $11.00. The options vest quarterly and have a total fair value of $16,990. The Company valued the options using the Black-Scholes model with the following key assumptions: fair value stock price, $10.00, Exercise price, $11.00, Term 5 years, Expected term 3.0 years, Volatility 64%, and Discount rate 3.42% and a dividend yield of 0%.

The following is a summary of activity of common stock options:

---

| | | |
|:---|:---|:---|
|  | Number of Shares | Weighted Average Exercise Price |
| Balance, December 31, 2023 |  | $- |
| Options expired |  | $- |
| Options granted | 20000 | $10.20 |
| Balance, December 31, 2024 | 20000 | $10.20 |
| Options expired |  | $- |
| Options granted | - | $- |
| Balance, December 31, 2025 | 20000 | $10.20 |

---

*<u>Series A Preferred Stock</u>*

On September 10, 2020, the Board of Directors approved the designation of a class of preferred stock "Series A Preferred Stock" consisting of 2,000,000 shares, par value $0.001.

On September 10, 2020, the Company issued 400,000 shares of Preferred Stock to its CEO as founder shares.

Under the Certificate of Designation, holders of the Series A Preferred Stock are entitled to vote together with the holders of the Company's common stock on all matters submitted to shareholders at a rate of one hundred (100) votes for each share held. The formal designation was filed on September 30, 2022.

As of December 31, 2025 and 2024, there were 400,000 shares of preferred stock issued and outstanding.

*<u>Common Stock</u>*

During the year ended December 31, 2024, the Company issued 24,550 shares for cash proceeds of $245,500.

During the year ended December 31, 2024, the Company issued 300,000 shares to settle accrued interest on convertible promissory notes of $300,000.

During the year ended December 31, 2024, stock warrants were exercised, resulting in an increase of 65,000 shares, valued at $137,500.

During the year ended December 31, 2024, the Company issued 1,008,100 shares valued at $10,081,000 for service, which is based on the price the Company raised capital during the year.

During the year ended December 31, 2024, the Company forgave stock payable in the amount of $83,334 which was recorded to APIC.

During the year ended December 31, 2025, the Company issued 8,850 shares for cash proceeds of $88,500.

During the year ended December 31, 2025, the Company issued 2,400,000 shares valued at $24,000,000 to a related party to extend the maturity date on convertible promissory notes of $1,000,000.

During the year ended December 31, 2025, the Company issued 876,700 shares valued at $8,767,000 for service, which is based on the price the Company raised capital during the year.

During the year ended December 31, 2025, the Company issued 547,887 shares valued at $5,478,872 for conversion of deferred compensation, which is based on the price the Company raised capital during the year. As a result of this conversion, the shares were issued at a price of $0.25 per share, which was below the estimated fair value of $2.00 per share at the time of conversion. Accordingly, the Company recognized a loss of approximately $4.8 million related to this transaction.

*Subscriptions payable*

 

During the year ended December 31, 2025, the Company accrued $50,000 in stock payable for services, which is based on the price the Company raised capital during the year.

**10.** **INCOME TAXES** 

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company recorded the valuation allowance due to the uncertainty of future realization of federal and state net operating loss carryforwards. The deferred income tax assets are comprised of the following at December 31, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Deferred income tax assets: | $3101837 | $1514477 |
| &nbsp;&nbsp;&nbsp; Valuation allowance | (3101837) | (1514477) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net deferred tax asset | $- | $- |

---

Reconciliation between the statutory rate and the effective tax rate is as follows at December 31, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Effective Tax Rate Reconciliation: |  |  |
| Federal statutory tax rate | 21.00% | 21.00% |
| State taxes, net of federal benefit | 0% | 0% |
| Change in valuation allowance | -21.00% | -21.00% |
| Effective tax rate | 0.00% | 0.00% |

---

The current income tax benefit of $1,587,361 and $546,928 generated for the year ended December 31, 2025 and 2024, respectively, was offset by an equal increase in the valuation allowance. The valuation allowance was increased due to uncertainties as to the Company's ability to generate sufficient taxable income to utilize the net operating loss carryforwards which is the only significant component of deferred taxes.

As of December 31, 2025, the Company had California net operating loss ("NOL") carryforwards of approximately $14,770,654. All California NOLs were generated in tax years beginning in 2020 or later.

For California income tax purposes, these NOL carryforwards are generally available for use for up to 20 years from the year generated and are subject to annual utilization limitations, which may include percentage-based limitations or temporary suspensions under applicable California tax law.

For U.S. federal income tax purposes, NOLs generated in tax years beginning after December 31, 2017 may be carried forward indefinitely. Federal NOL utilization is generally limited to 80% of taxable income in any given year, subject to applicable federal tax law provisions.

The Company recognizes interest and penalties related to uncertain tax positions in general and administrative expense. As of December 31, 2025 and 2024 the Company has no unrecognized uncertain tax positions, including interest and penalties.

**11.** **COMMITMENTS AND CONTIGENCIES** 

The Company's commitments are disclosed in other footnotes to the financial statements.

The Company is subject to a claim related to past due rent arising in the ordinary course of business. As of December 31, 2025, the Company has recorded an accrual for this matter in the accompanying financial statements. Management believes the recorded amount represents its best estimate of the probable loss associated with this claim. While the ultimate outcome cannot be predicted with certainty, management does not expect the resolution of this matter to have a material adverse effect on the Company's financial position, results of operations, or cash flows.

**12.** **SUBSEQUENT EVENTS** 

On January 14, 2026 the Company issued a convertible note in the amount of $10,000 to a related party. The note bears interest at 15%.

On January 28, 2026, the Company issued 250,000 shares of common stock to a consultant to provide strategic business development and networking services.

On January 29, 2026, the Company issued a convertible note in the amount of $50,000. The note bears interest at 18% and the conversion price is $1.00. In connection with the note the company will issue warrants convertible to 50,000 shares of common stock at an exercise price of $1.00.

On February 2, 2026, the Company issued a convertible note in the amount of $50,000. The note bears interest at 18% and the conversion price is $1.00. In connection with the note the company will issue warrants convertible to 50,000 shares of common stock at an exercise price of $1.00.

On March 17, 2026, the Company issued a secured convertible promissory note with a principal amount of $550,000 for gross proceeds of $500,000, reflecting an original issue discount of $50,000. The note bears interest at 12% per annum. The outstanding principal and accrued interest are convertible into shares of the Company's common stock at a conversion price equal to a 35% discount to the market price at the time of conversion. In connection with the issuance of the note, the Company agreed to issue warrants to purchase up to 100,000 shares of common stock at an exercise price of $5.00 per share.

**<u>Item 8. Exhibits</u>**

**Item 4.** **Exhibits**

---

| | | |
|:---|:---|:---|
| ***Exhibit*** |  | ***Description*** |
| 2.1 | \* | [Articles of Incorporation of the Registrant filed with the Nevada Secretary of State on August 27, 2020](https://www.sec.gov/Archives/edgar/data/1834868/000149315223039034/ex2-1.htm) |
| 2.2 | \* | [Certificate of Amendment to Articles of Incorporation of the Registrant filed with the Nevada Secretary of State on July 8, 2021](https://www.sec.gov/Archives/edgar/data/1834868/000149315223039034/ex2-2.htm) |
| 2.3 | \* | [Certificate of Designation of the Registrant filed with the Nevada Secretary of State on July 12, 2021](https://www.sec.gov/Archives/edgar/data/1834868/000149315223039034/ex2-3.htm) |
| 2.4 | \* | [Certificate of Amendment to Articles of Incorporation of the Registrant filed with the Nevada Secretary of State on July 18, 2022](https://www.sec.gov/Archives/edgar/data/1834868/000149315223039034/ex2-4.htm) |
| 2.5 | \* | [Certificate of Amendment to Certificate of Designation of the Registrant filed with the Nevada Secretary of State on September 30, 2022](https://www.sec.gov/Archives/edgar/data/1834868/000149315223039034/ex2-5.htm) |
| 2.6 | \* | [Bylaws of the Registrant](https://www.sec.gov/Archives/edgar/data/1834868/000149315223039034/ex2-6.htm) |
| 2.7 | \* | [Certificate of Charter Amendment](https://www.sec.gov/Archives/edgar/data/1834868/000149315225014059/ex3-1.htm) |
| 2.8 | \* | [Certificate of Designation Amendment](https://www.sec.gov/Archives/edgar/data/1834868/000149315225014059/ex3-2.htm) |
| 3.1 | †\* | [2021 Omnibus Equity Compensation Plan of the Registrant](https://www.sec.gov/Archives/edgar/data/1834868/000149315223039034/ex3-1.htm) |
| 6.1 | †\* | [A&R Executive Employment Agreement between the Registrant and Steven Luna dated August 24, 2021](https://www.sec.gov/Archives/edgar/data/1834868/000149315223039034/ex6-1.htm) |
| 6.2 | †\* | [A&R Executive Employment Agreement between the Registrant and Jason LeBlanc dated August 24, 2021](https://www.sec.gov/Archives/edgar/data/1834868/000149315223039034/ex6-2.htm) |
| 6.3 | †\* | [A&R Executive Employment Agreement between the Registrant and Richard Nagle dated August 24, 2022](https://www.sec.gov/Archives/edgar/data/1834868/000149315223039034/ex6-3.htm) |
| 6.4 | †\* | [A&R Executive Employment Agreement between the Registrant and Vanessa Luna dated August 24, 2022](https://www.sec.gov/Archives/edgar/data/1834868/000149315223039034/ex6-4.htm) |
| 6.5 | \* | [Form of Advisory Agreement](https://www.sec.gov/Archives/edgar/data/1834868/000164117225001778/ex6-9.htm) |
| 6.6 | \* | [Lease Agreement between the Registrant and Premier Workspaces dated May 17, 2023](https://www.sec.gov/Archives/edgar/data/1834868/000164117225001778/ex6-10.htm) |
| 6.7 | \* | [Agreement with Issuance, Inc. dated November 17, 2023](https://www.sec.gov/Archives/edgar/data/1834868/000164117225001778/ex6-11.htm) |
| 6.8 | \* | [Agreement with GrowthTurbine dated January 30, 2024](https://www.sec.gov/Archives/edgar/data/1834868/000164117225001778/ex6-12.htm) |
| 6.9 | \* | [2025 Executive Employment Agreement with Steven Luna, dated May 1, 2025](https://www.sec.gov/Archives/edgar/data/1834868/000149315225016376/ex6-9.htm) |
| 6.10 | \* | [2025 Executive Employment Agreement with Vanessa Luna, dated May 1, 2025](https://www.sec.gov/Archives/edgar/data/1834868/000149315225016376/ex6-10.htm) |
| 6.11 | \* | [2025 Executive Employment Agreement with Jason LeBlanc, dated May 1, 2025](https://www.sec.gov/Archives/edgar/data/1834868/000149315225016376/ex6-11.htm) |
| 6.12 | \* | [Addendum To Director Agreement with Bruce Culver, dated June 25, 2025](https://www.sec.gov/Archives/edgar/data/1834868/000149315225016376/ex6-12.htm) |
| 6.13 | \* | [Addendum To Director Agreement with Bruce Amaro, dated June 25, 2025](https://www.sec.gov/Archives/edgar/data/1834868/000149315225016376/ex6-13.htm) |
| 6.14 | \* | [Restricted Common Stock Award Agreement with Cuento LLC, dated January 1, 2025](https://www.sec.gov/Archives/edgar/data/1834868/000149315225016376/ex6-14.htm) |
| 6.15 | \* | [Amended And Restated Warrant Agreement with Solyco CAC, LLC, dated January 21, 2025](https://www.sec.gov/Archives/edgar/data/1834868/000149315225016376/ex6-15.htm) |
| 6.16 | \* | [Third Amendment To Convertible Promissory Note Sky Financial & Intelligence, LLC, dated May 21, 2025](https://www.sec.gov/Archives/edgar/data/1834868/000149315225016376/ex6-16.htm) |
| 6.17 | \* | [Bridge Loan Offering Documents with Vanessa Luna, dated July 2, 2025](https://www.sec.gov/Archives/edgar/data/1834868/000149315225016376/ex6-17.htm) |
| 6.18 | \* | [Bridge Loan Offering Documents with Solyco CAC, LLC, dated July 22, 2025](https://www.sec.gov/Archives/edgar/data/1834868/000149315225016376/ex6-18.htm) |
| 6.19 | \* | [Omnibus Amendment No. 1 to Bridge Loan Documents with Solyco CAC, LLC, dated July 22, 2025](https://www.sec.gov/Archives/edgar/data/1834868/000149315225016376/ex6-19.htm) |
| 6.20 | \* | [Omnibus Amendment No. 2 to Bridge Loan Documents with Solyco CAC, LLC, dated July 22, 2025](https://www.sec.gov/Archives/edgar/data/1834868/000149315225016376/ex6-20.htm) |
| 6.21 | \* | [Omnibus Amendment No. 1 to Bridge Loan Documents with Solyco CAC, LLC, dated September 2, 2025](https://www.sec.gov/Archives/edgar/data/1834868/000149315225016376/ex6-21.htm) |
| 6.22 | \* | [Omnibus Amendment No. 2 to Bridge Loan Documents with Solyco CAC, LLC, dated September 2, 2025](https://www.sec.gov/Archives/edgar/data/1834868/000149315225016376/ex6-22.htm) |
| 6.23 | \*\* | [Bridge Loan Offering Documents with Vanessa Luna, dated November 14, 2025](ex6-23.htm) |
| 6.24 | \*\* | [Bridge Loan Offering Documents with Vanessa Luna, dated January 14, 2026](ex6-24.htm) |
| 6.25 | \*\* | [Bridge Loan Offering Documents with Michael Breede, dated January 29, 2026](ex6-25.htm) |
| 6.26 | \*\* | [Bridge Loan Offering Documents with Katinger Family Trust, a Revocable Trust, dated February 2, 2026](ex6-26.htm) |
| 6.27 | \*\* | [Consulting Services Agreement with Aries Capital dated January 26, 2026](ex6-27.htm) |
| 6.28 | \*\* | [Secured Promissory Note with Lendspark Corporation, dated March 13, 2026](ex6-28.htm) |
| 6.29 | \*\* | [Secured Agreement with Lendspark Corporation, dated March 13, 2026](ex6-29.htm) |
| 6.30 | \*\* | [Securities Purchase Agreement with Lendspark Corporation, dated March 13, 2026](ex6-30.htm) |
| 6.31 | \*\* | [Common Stock Purchase Warrant with Lendspark Corporation, dated March 13, 2026](ex6-31.htm) |
| 6.32 | \*\*  | [Amendment No. 1 to Securities Purchase Agreement with Lendspark Corporation, dated March 17, 2026](ex6-32.htm) |

---

† Indicates management contract or compensatory plan <br> \* Previously filed <br> \*\* Filed herewith

**SIGNATURES**

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

---

| | | |
|:---|:---|:---|
|  | **Alternative Ballistics Corporation** | **Alternative Ballistics Corporation** |
| Dated: April 30, 2026 |  |  |
|  | By: | */s/ Steven Luna* |
|  | Name: | Steven Luna |
|  | Title: | Chief Executive Officer |

---

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

---

| | | |
|:---|:---|:---|
| | **Name** | **Title** |
| Dated: April 30, 2026 | */s/ Steven Luna* | Chief Executive Officer |
|  | Steven Luna | (Principal Executive Officer) |
| Dated: April 30, 2026 | */s/ John Lomoro* | Chief Financial Officer |
|  | John Lomoro | (Principal Financial Officer and Principal Accounting Officer) |

---

## Add

**Exhibit 6.23**

**ALTERNATIVE BALLISTICS CORPORATION,** 

**A NEVADA CORPORATION**

**BRIDGE LOAN OFFERING DOCUMENTS**

***November 14, 2025***

**Documents included in this package:**

&nbsp;&nbsp;&nbsp;&nbsp;**1.** **Instructions for Payment** 

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **Subscription Agreement** 

&nbsp;&nbsp;&nbsp;&nbsp;**3.** **Investor Representations and Warranties Agreement** 

&nbsp;&nbsp;&nbsp;&nbsp;**4.** **Convertible Note** 

&nbsp;&nbsp;&nbsp;&nbsp;**5.** **Disclosure Document** 

**INSTRUCTIONS FOR PAYMENT**

Review and complete the Bridge Loan Offering Documents and mail or deliver them, along with a check made payable to "Alternative Ballistics Corporation" in the amount of your investment to:

**Alternative Ballistics Corporation**

Attn: Steve Luna, Chief Executive Officer

5940 S. Rainbow Blvd.

Las Vegas, NV 89118

For any inquiries, please contact:

Steve Luna, Chief Executive Officer

Email: steve@alternativeballistics.com

Phone: 619-326-4411

We prefer you to send a wire transfer instead of a check. Please scan and email the signed Bridge Loan Offering Documents to the email address above and send the wire transfer using these instructions:

**Wiring Instructions:**

US Bank

Wire Transfer Department

P.O. Box 64830

St. Paul, MN 55164-0830

Phone: 800-872-2657

Routing Number: 122235821

For Further Credit to: Alternative Ballistics Corporation

Account Number: 157523676557

**<u>SUBSCRIPTION AGREEMENT</u>**

This SUBSCRIPTION AGREEMENT is made on November 14, 2025 by and between Alternative Ballistics Corporation, a Nevada corporation (the "Company") and Luna Consultant Group (the "Investor") (the Company and the Investor may be referred to individually as a "Party" or collectively as the "Parties") as of the date set forth on the signature page of this Agreement.

**RECITALS:**

WHEREAS, the Company is offering to Investor a $15,000 Convertible Note, convertible into shares of common stock at a 50% discount to the Qualified Offering Price (defined below) (the "Note");

WHEREAS, the Investor desires to subscribe for the Notes (and together with the shares of common stock into which the Note is convertible, referred to herein as the "Securities") for the purchase price of $15,000 (the "Purchase Price"); and

WHEREAS, this Subscription Agreement is part of a package of documents, including Instructions for Payment, Investor Representations, the Note, and Disclosure Document (hereinafter defined), all of which are incorporated herein by reference (the "Transaction Documents").

NOW THEREFORE, in consideration of the promises and respective mutual agreements herein contained, it is agreed by and between the Parties hereto as follows:

**ARTICLE I.**

**THE SECURITIES**

<u>Section 1.01. THE PURCHASE OF THE SECURITIES</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *Subscription*. The Investor is purchasing the Securities, on the terms set forth in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *Convertible Note*. The Note shall be in the form attached hereto, the terms of which are hereby incorporated herein as if such Note was fully set forth herein; provided, however, that in the event of any conflict between the express provisions of the Note and this Subscription Agreement, the provisions of the Note shall control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. Loan
 Amount. The Note shall be in the amount of $15,000. Investor shall pay for the Securities
 in one installment, as follows:

---

| | |
|:---|:---|
| Amount | Payment Date |
| $15000 | November 14, 2025 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. Maturity
 Date. The principal balance and all accrued and unpaid interest thereon shall be due and
 payable six (6) months from the date of the Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. Interest
 Rate. The Note shall bear an interest rate of 15% per annum.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv. Prepayment.
 In the event of a prepayment of the Loan prior to the Maturity Date, the Company shall pay
 120% of the Principal Balance plus any accrued and unpaid interest on the original Principal
 Balance of the Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;v. Repayment
 Upon a Qualified Offering. In the event a Qualified Offering (defined below) closes prior
 to the Maturity Date, the Investor has the option (a) to be repaid from the proceeds of the
 Qualified Offering within five days from the closing of the Qualified Offering; or (b) in
 the event that the Investor does not exercise such option for repayment, then the Note shall
 automatically convert into shares of common stock 30 days following the closing of the Qualified
 Offering pursuant to the conversion terms set forth below. A "Qualified Offering"
 shall mean a public offering in the United States pursuant to a registration statement declared
 effective by the Securities and Exchange Commission (the "Commission") pursuant
 to the Securities Act of 1933 (the "Act"), with minimum gross proceeds of $5,000,000,
 pursuant to which the common stock is listed for trading on Nasdaq or a similar U.S. nationally-recognized
 stock exchange.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vi. Conversion.
 The Principal Balance and all accrued and unpaid interest may be converted at any time prior
 to the Maturity Date at the option of the Company into shares of common stock at the Conversion
 Price. The "Conversion Price" shall be such price equal to the lower of (i) a
 50% discount to the "Qualified Offering Price," which shall be defined as the
 price at which the Qualified Offering is consummated and (ii) any conversion price offered
 to other noteholders on notes issued subsequent to the issue date of the Note.

<u>Section 1.02. CLOSING</u>.

The purchase and sale of the Securities will take place at one closing (the "Closing") at a time and date as soon as practicable after all the conditions set forth in Articles III and IV hereof have been satisfied ("Closing Date"), and at such time and location as the Investor and the Company shall agree.

<u>Section 1.03. DELIVERY</u>.

At or prior to the Closing, the Investor shall deliver to the Company the Purchase Price for the Securities and all Transaction Documents signed by the Investor. At the Closing, the Company shall deliver to the Investor all Transaction Documents counter-signed by the Company.

<u>Section 1.04. LEGENDS; SECURITIES NOT REGISTERED UNDER THE SECURITIES ACT OF 1933</u>.

The Securities have not been registered under the Securities Act of 1933, as amended (the "Act"). Each of the certificates for the Securities shall bear substantially the following legend:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE.

The Offering is not a public offering and is intended to be made pursuant to exemptions from registration as set forth in Section 4(2) of the Act and Regulation D as promulgated by the Securities and Exchange Commission ("SEC") under the Act. This Offering is also intended to be exempt from the registration requirements of various state securities laws as may be applicable.

**ARTICLE II.**

**REPRESENTATIONS AND WARRANTIES**

<u>Section 2.01. INVESTOR REPRESENTATIONS AND WARRANTIES</u>.

The Investor makes each and every one of the representations and warranties set forth in the document entitled Investor Representations and Warranties Agreement attached hereto and incorporated herein by this reference as if such document were set forth herein in its entirety.

<u>Section 2.02. COMPANY REPRESENTATIONS AND WARRANTIES</u>.

The Company hereby represents, warrants, and covenants to the Investor as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company has been duly organized and validly existing as a corporation in good standing under the laws of the state of its incorporation. The Company is duly qualified or licensed and in good standing as a foreign corporation in each jurisdiction in which its ownership or leasing of any properties or the character of its operations requires such qualification or licensing and where failure to so qualify would have a material effect on the Company. The Company has all requisite corporate power and authority, and all material and necessary authorizations, approvals, orders, licenses, certificates, and permits of and from all governmental regulatory officials and bodies to own or lease its properties and conduct its businesses as described in the Company's Offering Circular on Form 1-A dated June 10, 2024 (hereinafter, the "Disclosure Document") and the Company is doing business in compliance with all such authorizations, approvals, orders, licenses, certificates, and permits and all federal, state, and local laws, rules, and regulations concerning the business in which it is engaged except where the failure so to do business in compliance would not have a material adverse effect on the business of the Company. The disclosures herein and in the Disclosure Document concerning the effects of federal, state, and local regulation on the Company's business as currently conducted and as contemplated are correct in all material respects and do not omit to state a material fact. The Company has all corporate power and authority to enter into the Transaction Documents and to carry out the provisions and conditions hereof and thereof, and all consents, authorizations, approvals, and orders required in connection herewith and therewith have been obtained or will have been obtained prior to the Closing Date. No consent, authorization, or order of, and no filing with any court, government agency, or other body is required for the issuance of the Securities pursuant to this Agreement except with respect to applicable federal and state securities laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) This Agreement and the Transaction Documents have been duly and validly authorized, executed, and delivered by the Company and are valid and binding agreements of the Company, enforceable in accordance with their respective terms, except to the extent that the enforceability hereof or thereof may be limited by (A) bankruptcy, insolvency, reorganization, moratorium, or similar laws from time to time in effect and affecting the rights of creditors generally; (B) limitations upon the power of a court to grant specific performance or any other equitable remedy; or (C) a finding by a court of competent jurisdiction that the indemnification provisions herein are in violation of public policy. The Securities have been duly authorized and are validly issued, fully paid, and non-assessable; all corporate action required to be taken for the authorization, issue, and sale of such securities has been duly and validly taken; and to the best knowledge of the Company, the Securities are not and will not be subject to the preemptive rights of any stockholder of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Company has good and marketable title to, or valid and enforceable leasehold estates in, all items of real and personal property owned or leased by it, free and clear of all liens, claims, encumbrances, security interests, and defects of any material nature whatsoever, except for Permitted Liens. "Permitted Liens" means liens, claims, encumbrances, security interests, and defects of any material nature whatsoever that are described in the Disclosure Document or otherwise disclosed to the Investor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) There is no litigation or governmental proceeding pending or threatened against or involving the properties or business of the Company which the Company believes would materially adversely affect the value or the operation of the properties or the business of the Company, except as set forth in the Disclosure Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) There has been no material adverse change in the condition or prospects for commercialization of the Company, financial or otherwise, as of the latest dates as of which such condition or prospects, respectively, are set forth in this Agreement and the Disclosure Document; and the outstanding debt, property, and the business of the Company conform in all material respects to the descriptions thereof contained herein and therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Securities shall conform in all respects to all statements in relation thereto contained herein or in the Disclosure Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Company is not in material violation of its Articles of Incorporation, or its Bylaws. Neither the execution and delivery of the Transaction Documents, nor the issuance of the Securities, nor the consummation of any of the transactions contemplated herein or in the Note, nor the compliance by the Company with the terms and provisions contained herein, or in the Note, has conflicted with or will conflict with, or has resulted in or will result in a breach of, any of the terms and provisions of, or has constituted or will constitute a default under, or has resulted in or will result in the creation or imposition of any lien, charge, or encumbrance upon any property or assets of the Company pursuant to the terms of any indenture, mortgage, deed of trust, note, loan or credit agreement, or any other agreement or instrument evidencing an obligation for borrowed money, or any other agreement or instrument to which the Company is subject; nor will such action result in any violation of the provisions of the Articles of Incorporation or the Bylaws of the Company, or any statute or any order, rule, or regulation applicable to the Company of any court or of any federal, state, or other regulatory authority or other government body having jurisdiction over the Company; except for any conflict, breach, default, lien, charge, or encumbrance which does not have a material and adverse effect on the Company, any of its business, property, or assets or any transactions contemplated hereby or by the Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Subsequent to the dates as of which information is given in this Agreement or the Disclosure Document, and except as may otherwise be indicated or contemplated herein or therein, the Company has not entered into any transaction other than in the ordinary course of business or declared or paid any dividend or made any other distribution on or in respect of its capital stock. The Investor acknowledges that the Company may conduct financing activities in the future which would result in the issuance of securities of the Company to third parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Company owns or possesses, free and clear of all liens or encumbrances and rights thereto or therein by third parties, other than Permitted Liens, the requisite licenses or other rights to use all trademarks, service marks, copyrights, service names, trade names, patents, patents applications, and licenses necessary to conduct and material to their businesses (including, without limitation any such licenses or rights described herein as being owned or possessed by the Company), and there is no material claim or action by any person pertaining to, or proceeding, pending or threatened, which challenges the exclusive rights of the Company with respect to any trademarks, service marks, copyrights, service names, trade names, patents, patent applications, and licenses used in the conduct of the Company's business (including, without limitation, any such licenses or rights described herein or in the Disclosure Document as being owned or possessed by the Company); the Company's current products, services, and processes do not and will not infringe on any patents currently held by third parties, to the best knowledge of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Neither the Disclosure Document nor any of the documents contained in the Transaction Documents contain any untrue statement of a material fact or omits to state any material fact required to be stated herein or therein or necessary to make the statements herein or therein, considering the circumstances under which they were made, not misleading. All statements of material facts herein or therein (including, without limitation, any attachment, exhibit, or schedule hereto or thereto) are true and correct as of the date hereof and will be true and correct on the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) The Company shall use the proceeds from this Offering for costs and expenses of related to its initial public offering as well as for general working capital purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) Neither the Company, nor any of its respective officers, directors, employees, or agents, nor any other person acting on behalf of the Company has, directly or indirectly, given or agreed to give any money, gift, or similar benefit (other than legal price concessions to customers in the ordinary course of business) to any customer, supplier, employee, or agent of a customer or supplier, or official or employee of a customer or supplier, or official or employee of any governmental agency or instrumentality of any government (domestic or foreign) or any political party or candidate for office (domestic or foreign), or other person who is or may be in a position to help or hinder the business of the Company (or assist it in connection with any actual or proposed transaction) which (A) might subject the Company to any damage or penalty in any civil, criminal, or governmental litigation or proceeding; (B) if not given in the past, might have had a materially adverse effect on the assets, business, or operations of the Company as reflected in the financial statements delivered to the Investor, if any; or (C) if not continued in the future, might adversely affect the assets, business, operations, or prospects of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) The Company has not paid or promised to pay any form of compensation to any unlicensed finders, whether in the form of finder's fees, origination fees, referral fees, or otherwise, in connection with this Offering.

**ARTICLE III.**

**CONDITIONS TO THE INVESTOR'S OBLIGATIONS**

The obligation of the Investor to purchase the Securities at Closing is subject to the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The representations and warranties of the Company contained herein shall be true and correct in all material respects on and as of the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) There shall be no preliminary or permanent injunction or other order, decree, or ruling issued by a court of competent jurisdiction or by a governmental, regulatory, or administrative agency or commission, nor any statute, rule, regulation, or order promulgated or enacted by any governmental authority, prohibiting, or otherwise restraining the sale or purchase of the Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) On or prior to the Closing Date, the Investor shall have been furnished such documents, certificates, and opinions as they may reasonably require for the purpose of enabling them to review or pass upon the matters set forth herein, or in order to evidence the accuracy, completeness, or satisfaction of any of the representations, warranties, or conditions herein contained.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Prior to the Closing, (i) there shall have been no material adverse change nor development involving a prospective change in the condition, prospects, or the business activities, financial or otherwise, of the Company as a whole, from the latest dates as of which such condition is set forth in this Subscription Agreement and the Disclosure Document; (ii) there shall have been no transaction, not in the ordinary course of business, entered into by the Company from the latest date as of which the financial condition of the Company is set forth in this Subscription Agreement which is material to the Company and which has not been disclosed to the Investor in writing; (iii) the Company shall not be in default in any material respect under any provision of any instrument relating to any outstanding indebtedness; (iv) no material amount of the assets of the Company shall have been pledged or mortgaged; and (v) no action, suit, or proceeding, at law or in equity, shall have been pending or threatened against the Company or affecting any of its respective properties or businesses before or by any court of federal or state commission, board, or other administrative agency wherein an unfavorable decision, ruling, or finding could materially adversely affect the business, operations, prospects, or financial condition or income of the Company.

**ARTICLE IV.**

**CONDITIONS TO THE COMPANY'S OBLIGATIONS**

The obligation of the Company to sell the Securities under this Agreement at the Closing is subject to the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The representations and warranties of the Investor contained in the document entitled Investor Representations and Warranties Agreement attached hereto shall be true and correct in material respects on and as of the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) There shall be no preliminary or permanent injunction or other order, decree, or ruling issued by a court of competent jurisdiction or by a governmental, regulatory, or administrative agency or commission, nor any statute, rule, regulation, or order promulgated or enacted by any governmental authority, prohibiting, or otherwise restraining the sale or purchase of the Securities.

**ARTICLE V.**

**INDEMNIFICATION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company hereby agrees to defend, indemnify, and hold harmless the Investor, their stockholders, directors, partners, employees, agents, attorneys, and each person, if any, who controls such Investor within the meaning of the Act against any and all losses, claims, damages, or liabilities to which such Investor or any such stockholder, director, partner, employee, agent, attorney, or controlling person may become subject under the Act or otherwise, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained herein, in the Disclosure Document, or in any statement made to or in any filing with the Commission or to or with any state securities commission, bureau, or office (including any amendments thereto), or arise out of or based upon the omission or alleged omission to state herein or therein a material fact required to be stated herein or therein or necessary to make the statements herein or therein not misleading (unless such statements are made or omitted in reliance upon and in conformity with written information furnished to the Company with respect to such Investor by such Investor expressly for use herein or therein or any amendment hereof or supplement hereto), or any violation by the Company of the Act or state "blue sky" laws, or any breach by the Company of their obligations, representations, or warranties hereunder or with respect to the Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Investor hereby agrees to defend, indemnify, and hold harmless the Company and its respective stockholders, directors, employees, agents, and each person, if any, who controls any of the foregoing within the meaning of the Act against any and all losses, claims, damages, or liabilities to which the Company or any of the Company's stockholders, directors, employees, agents, or controlling persons may become subject under the Act or otherwise, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any written statement as it relates to the Offering, as made by the Investor, its stockholders, directors, partners, agents, or employees or any breach by such Investor of its obligations, representations, or warranties hereunder, provided that such statement or breach was made knowingly and intentionally.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Promptly after receipt by an indemnified party under either subparagraph (a) or (b), as the case may be, of the notice of commencement of any action covered by subparagraph (a) or (b), such indemnified party shall within five business days notify the indemnifying party of the commencement thereof; the omission by one indemnified party to so notify such indemnifying party shall not relieve the indemnifying party of its obligations hereunder except to the extent such indemnifying party has been materially prejudiced by such omission, shall not relieve the indemnifying party of its obligation to indemnify any other indemnified party that has given such notice and shall not relieve the indemnifying party of any liability outside of this indemnification. If any action is brought against the indemnified party, it shall notify the indemnifying party in a timely manner, the indemnifying party will be entitled to participate in such action and, to the extent it may desire, to assume and control the defense thereof with counsel chosen by it. After notice from the indemnifying party to such indemnified party of its election to so assume the defense thereof, the indemnifying party will not be liable to such indemnified party under such subparagraph for any legal or other expense subsequently incurred by such indemnified party in connection with the defense thereof, but the indemnified party may, at its own expenses, participate in such defense by counsel chosen by it without, however, impairing the indemnifying party's control of the defense. Notwithstanding anything to the contrary contained herein, the indemnified party shall have the right to choose its own counsel and control the defense of any action, all at the reasonable expense of the indemnifying party, if (i) the employment of such counsel shall have been authorized in writing by the indemnifying party in connection with the defense of such action at the expense of the indemnifying party; (ii) the indemnifying party shall not have employed counsel reasonably satisfactory to such indemnified party to have charge of the defense of such action within a reasonable time after notice of commencement of the action; or (iii) such indemnified party shall have reasonably concluded that there may be defenses available to such indemnified party that differ from the defenses available to the indemnifying party (in which case the indemnifying party shall not have the right to direct the defense of such action on behalf of such indemnified party), in any of which events such reasonable fees and expenses of one additional counsel (for all indemnified parties) shall be borne by the indemnifying party (in the case of the Investor, one additional counsel for Investor). No settlement of any action or proceeding against an indemnified party shall be made without the consent of the indemnified party, which consent shall not be unreasonably withheld.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) In order to provide for just and equitable contribution under the Act in any case in which (i) any indemnified party makes a claim for indemnification pursuant to this paragraph but it is judicially determined (by entry of a final judgment or decree by a court of competent jurisdiction and the expiration of the time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case, notwithstanding the fact the this paragraph provides for indemnification in such case, or (ii) contribution under the Act is required on the part of any such person in circumstances for which indemnification is provided under this paragraph, then, in each such case, the Company shall be solely responsible for all aggregate losses, claims, damages, or liabilities, and the Investor shall not be required to contribute to these losses beyond the amount of the Securities purchased by such Investor pursuant to the Subscription Agreement; provided, that in any such case, no person guilty of a fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

**ARTICLE VI.**

**NOTICES**

Any notice, request, instruction, or other document required by the terms of this Agreement, or deemed by any of the Parties hereto to be desirable, to be given to any other Party hereto shall be in writing and shall be given by personal delivery, overnight delivery, mailed by registered or certified mail, postage prepaid, with return receipt requested, or sent by electronic mail (with receipt confirmed) to the addresses of the Parties as follows:

---

| | |
|:---|:---|
| Company: | Alternative Ballistics Corporation |
|  | 5940 S. Rainbow Blvd. |
|  | Las Vegas, NV 89118 |
|  | Email: steve@alternativeballistics.com |
|  | Attn: Steven Luna, CEO |
| Investor: | At the address below Investor's signature on this Agreement |

---

The persons and addresses set forth above may be changed from time to time by a notice sent as aforesaid. If notice is given by personal delivery or overnight delivery in accordance with the provisions of this Section, such notice shall be conclusively deemed given at the time of such delivery provided a receipt is obtained from the recipient. If notice is given by mail in accordance with the provisions of this Article, such notice shall be conclusively deemed given upon receipt and delivery or refusal. If notice is given by electronic mail transmission in accordance with the provisions of this Article, such notice shall be conclusively deemed given at the time of delivery if during business hours and if not during business hours, at the next business day after delivery, provided a confirmation is obtained by the sender.

**ARTICLE VII.**

**MISCELLANEOUS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of California applicable to contracts made and to be performed entirely therein, without giving effect to the rules of conflicts of law. The Parties agree that the courts of the County of Orange, State of California shall have sole and exclusive jurisdiction and venue for the resolution of all disputes arising under the terms of this Agreement and the transactions contemplated herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) This Agreement represents the entire agreement between the Parties relating to the subject matter hereof, superseding any and all prior to contemporaneous oral and prior written agreements and understandings. This Agreement may not be modified or amended, nor may any right be waived except by a writing signed by the party against whom the modification or waiver is sought to be enforced.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The warranties, representations, and covenants of the Company and the Investor contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The captions and headings contained herein are solely for convenience of reference and do not constitute a part of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Each of the Transaction Documents is hereby incorporated herein as if each of such attachments were fully set forth herein in its entirety. Each of such attachments is hereby expressly made a part of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The Parties agree that this Agreement may be executed by facsimile signatures and such signatures shall be deemed originals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) All Parties to this Agreement have been given the opportunity to consult with counsel of their choice regarding their rights under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The term "days," as used in this Agreement and in all documents contained in the Transaction Documents, refers to calendar days unless otherwise clearly indicated.

**[SIGNATURE PAGE FOLLOWS]**

**IN WITNESS WHEREOF**, intending to be legally bound, the Parties hereto have executed this Agreement as of the November 14, 2025.

---

| | |
|:---|:---|
| **COMPANY:** | **COMPANY:** |
| **Alternative Ballistics Corporation,** | **Alternative Ballistics Corporation,** |
| a Nevada corporation | a Nevada corporation |
| */s/ Steven Luna* | */s/ Steven Luna* |
| By: | Steven Luna |
| Its: | Chief Executive Officer |

---

---

| | |
|:---|:---|
| **INVESTOR:** | **INVESTOR:** |
| **Luna Consultant Group** | **Luna Consultant Group** |
| */s/ Vanessa Luna* | */s/ Vanessa Luna* |
| By: | Vanessa Luna |
| Its: | President |

---

**PLEASE CHECK ONE:**

I. **If INVESTOR is an individual**:

I certify that I am an "accredited investor" because:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** ☐ I
 had an individual income of more than $200,000 in each of the two most recent calendar years, and I reasonably expect to have an
 individual income in excess of $200,000 in the current calendar year; or my spouse and I had joint income in excess of $300,000 in
 each of the two most recent calendar years, and we reasonably expect to have a joint income in excess of $300,000 in the current
 calendar year; **or** 

**2.** ☐ I
 have an individual net worth, or my spouse and I have a joint net worth, in excess of $1,000,000 (excluding my (our) primary
 residence); **or** 

**3.** ☐ I
 hold, in good standing, a Series 7, Series 65, or Series 82 license.

II. **If INVESTOR is a corporation, partnership, employee benefit plan or IRA**, it certifies as
 follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Has
 the subscribing entity been formed for the specific purpose of investing in the Securities?

---

| | |
|:---|:---|
| **☐ YES** | **☐ **NO** |

---

If your answer to question A is "No" CHECK whichever of the following statements (1-5) is applicable to you. If your answer to question A is "Yes" the subscribing entity must be able to certify to statement **(B)** below in order to qualify as an "accredited investor."

The undersigned entity certifies that it is an "accredited investor" because it is:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** ☐ an
 employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974, provided that the
 investment decision is made by a plan fiduciary, as defined in section 3(21) of such Act, and the plan fiduciary is a bank, savings
 and loan association, insurance company or registered investment adviser; **or** 

**2.** ☐ an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974 that has total
 assets in excess of $5,000,000; **or** 

**3.** ☐ each
 of its shareholders, partners, or beneficiaries meets at least one of the following conditions described above under INDIVIDUAL
 ACCREDITED INVESTOR STATUS. Please also CHECK the appropriate space in that section; **or** 

**4.** ☐ the
 plan is a self directed employee benefit plan and the investment decision is made solely by a person that meets at least one of the
 conditions described above under INDIVIDUAL ACCREDITED INVESTOR STATUS; **or** 

**5.** ☐ a
 corporation, a partnership or a Massachusetts or similar business trust with total assets in excess of $5,000,000; **or** 

**6.** ☐ all
 equity owners are Accredited Investors.

&nbsp;&nbsp;&nbsp;&nbsp;B. If
 the answer to Question A above is "Yes," please certify the statement below is
 true and correct:

☐ The undersigned entity certifies that it is an accredited investor because each of its shareholder or beneficiaries meets at least one of the following conditions described above under INDIVIDUAL ACCREDITED INVESTOR STATUS. Please also CHECK the appropriate space in that section.

&nbsp;&nbsp;&nbsp;&nbsp;III. **If INVESTOR is a Trust**, it certifies as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Has the subscribing entity been formed for the specific purpose of investing in the Securities?

---

| | |
|:---|:---|
| ☐ **YES** | ☐ **NO** |

---

If your answer to question A is "No" CHECK whichever of the following statements (1-3) is applicable to the subscribing entity. If your answer to question A is "Yes" the subscribing entity must be able to certify to the statement **(3)** below in order to qualify as an "accredited investor."

The undersigned trustee certifies that the trust is an "accredited investor" because:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** ☐
 the trust has total assets in excess of $5,000,000 and the investment decision has been made by a "sophisticated
 person"; **or** 

**2.** ☐ the
 trustee making the investment decision on its behalf is a bank (as defined in Section 3(a)(2) of acc), a saving and loan association
 or other institution as defined in Section 3(a)(5)(A) of the Securities Act, acting in its fiduciary capacity; **or** 

**3.** ☐ the
 undersigned trustee certifies that the trust is an accredited investor because the grantor(s) of the trust may revoke the trust at
 any time and regain title to the trust assets and has (have) retained sole investment control over the assets of the trust and the
 (each) grantor(s) meets at least one of the following conditions described above under INDIVIDUAL ACCREDITED INVESTOR STATUS. Please
 also CHECK the appropriate space in that section.

**Print Name: Vanessa Luna** 

---

| |
|:---|
| [Signature] |
| 315 Calgrove Street |
| Address |
| Las Vegas, NV 89138 |
| Address |
| Email Address |
| Social Security/Tax I.D. Number |

---

**INVESTOR REPRESENTATIONS AND WARRANTIES AGREEMENT**

This INVESTOR REPRESENTATIONS AND WARRANTIES AGREEMENT ("Agreement"), dated as of the date set forth on the signature page of this Agreement, is by and between Alternative Ballistics Corporation, a Nevada corporation (the "Company") and the purchaser set forth on the signature page of this Agreement, or assigns (the "Investor") (the Company and the Investor may be referred to individually as a "Party" and, collectively, as the "Parties").

**RECITALS:**

This Agreement is being made pursuant to an Offering by the Company of the purchase of a Convertible Note (the "Note") to purchase shares of common stock (collectively with the Note, the shares of common stock into which the Note is convertible, the "Securities"). The Securities are being issued on the Closing (as defined in the Subscription Agreement) pursuant to a Subscription Agreement of even date herewith between the Company and the Investor which contains representations and warranties and additional covenants of the Company with respect to the sale of the Securities. Capitalized terms not otherwise defined herein shall have the meaning set forth in the Subscription Agreement. THE PROVISIONS OF THE SUBSCRIPTION AGREEMENT ARE INCORPORATED HEREIN BY REFERENCE.

**ARTICLE 1.**

**REPRESENTATIONS AND WARRANTIES OF THE INVESTOR**

The Investor hereby represents and warrants that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Investor acknowledges that the Securities are "restricted securities" (as such term is defined in Rule 144 promulgated under the Securities Act of 1933, as amended ("Rule 144"), that the Securities will include the restrictive legend set forth in Section 1.04 of the Subscription Agreement, and, except as otherwise set forth in the Subscription Agreement, that the Securities cannot be sold unless registered with the United States Securities and Exchange Commission ("SEC") and qualified by appropriate state securities regulators, or unless Investor otherwise complies with an exemption from such registration and qualification (including, without limitation, compliance with Rule 144).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Investor has adequate means of providing for current needs and contingencies, has no need for liquidity in the investment, and is able to bear the economic risk of an investment in the Securities. Investor represents that Investor is able to bear the economic risk of the investment and at the present time could afford a complete loss of such investment. Investor has reviewed the Transaction Documents with care. Additionally, Investor has had a full opportunity to inspect the Disclosure Document and to make any and all inquiries of Company officers and directors regarding the Company and its business as Investor has deemed appropriate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Investor is an "Accredited Investor" as defined in Regulation D of the Act. Investor, either alone or with Investor's professional advisers who are unaffiliated with, have no equity interest in, and are not compensated by the Company or any affiliate or selling agent of the Company, directly or indirectly, has sufficient knowledge and experience in financial and business matters that Investor is capable of evaluating the merits and risks of an investment in the Securities offered by the Company and of making an informed investment decision with respect thereto and has the capacity to protect Investor's own interests in connection with Investor's proposed investment in the Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Investor is acquiring the Securities solely for Investor's own account as principal, for investment purposes only and not with a view to the resale or distribution thereof, in whole or in part, and no other person or entity has a direct or indirect beneficial interest in such Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Investor will not sell or otherwise transfer the Securities without registration under the Act or an exemption therefrom and fully understands and agrees that Investor must bear the economic risk of Investor's purchase for an indefinite period of time because, among other reasons, the Securities have not been registered under the Act or under the securities laws of any state and, therefore, cannot be resold, pledged, assigned, or otherwise disposed of unless they are subsequently registered under the Act and under the applicable securities laws of such states or unless an exemption from such registration is available.

**ARTICLE 2.**

**MISCELLANEOUS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of California applicable to contracts made and to be performed entirely therein, without giving effect to the rules of conflicts of law. The Parties agree that the courts of the County of Orange, State of California shall have sole and exclusive jurisdiction and venue for the resolution of all disputes arising under the terms of this Agreement and the transactions contemplated herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The warranties and representations of the Investor contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The Parties agree that this Agreement may be executed by facsimile signatures and such signatures shall be deemed originals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) All Parties to this Agreement have been given the opportunity to consult with counsel of their choice regarding their rights under this Agreement.

**IN WITNESS WHEREOF**, intending to be legally bound, the Parties hereto have executed this Agreement as of November 14, 2025.

---

| | |
|:---|:---|
| **COMPANY:** | **COMPANY:** |
| **Alternative Ballistics Corporation,** | **Alternative Ballistics Corporation,** |
| a Nevada corporation | a Nevada corporation |
| By: | Steven Luna |
| Its: | Chief Executive Officer |

---

---

| | |
|:---|:---|
| **INVESTOR:** | **INVESTOR:** |
| **Luna Consultant Group** | **Luna Consultant Group** |
| By: | Vanessa Luna |
| Its: | President |

---

**THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE OFFERED, SOLD TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE.**

**ALTERNATIVE BALLISTICS CORPORATION, A NEVADA CORPORATION**

**CONVERTIBLE NOTE**

This Convertible Note (this "Note") has been issued pursuant to a Subscription Agreement dated November 14, 2025 (the "Subscription Agreement") between the Company and the holder of this Note (the "Noteholder"). Capitalized terms not otherwise defined herein shall have the meaning set forth in the Subscription Agreement, the provisions of which are incorporated herein by reference.

---

| | |
|:---|:---|
| **$15000** | **Date: November 14, 2025** |

---

1. <u>The Obligation</u>. FOR VALUE RECEIVED, the undersigned, Alternative Ballistics Corporation, a Nevada corporation (the "Company"), hereby promises to pay to the order of Luna Consultant Group, or its assigns (collectively, the "Noteholder"), in lawful money of the United States of America, and in immediately payable funds, the principal sum of $15,000 (the "Obligation"). The principal amount loaned by Noteholder to the Company shall accrue interest thereon from the date of this Note. Interest shall be paid according to Section 2 below and all amounts due under this Note shall be paid upon the Maturity Date set forth in Section 3 below. The Company has the right to assign this Note upon written notice to the Noteholder. (The Noteholder and the Company may be referred to individually as a "Party" and collectively as the "Parties" in this Note.)

2. <u>Interest</u>. The principal amount of this Note that may be outstanding from time to time shall bear interest at a rate equal to 15% per annum. Interest, if any, shall be computed hereunder based on a 365-day year and paid for the actual number of days elapsed for any whole or partial month in which principal is outstanding, which interest shall then be due and payable on the Maturity Date.

3. <u>Payment Terms</u>. The principal and interest of this Note shall be due and payable to the Noteholder six (6) months from the date of this Note (the "Maturity Date") unless all principal and interest due under this Note have been prepaid pursuant to Section 4 herein or converted pursuant to Section 5 herein. Payments are to be made to the Noteholder at its address stated in the Subscription Agreement (or such other address as is designated by the Noteholder) in lawful money of the United States of America. Unless otherwise specified, payments received by the Noteholder pursuant to the terms hereof shall be applied, first, to the payment of all expenses, charges, late payment fees, costs, and fees incurred by or payable to the Noteholder and for which the Company is obligated pursuant to the terms of this Note; second, to the payment of interest; and third, to the payment of principal.

4. <u>Prepayment</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1. <u>Prepayment</u>. The Company shall have the right to prepay all or any portion of the Loan outstanding at any time; provided, however, in the event of a prepayment, the Company shall pay 120% of the Principal Balance plus accrued and unpaid interest on the original Principal Balance of the Note. The Company shall deliver a notice of prepayment to Noteholder, which notice shall specify a prepayment date not less than 15 nor more than 30 days from the date of such notice (the "Prepayment Date"); provided, however, that the Investor will continue to have the right to convert the Note until the close of business of the fifth business day prior to the Prepayment Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 <u>Repayment Upon a Qualified Offering</u>. The Company shall immediately notify the Noteholder in the event a Qualified Offering (defined below) closes prior to the Maturity Date. Following such notice, the Noteholder has the option to (a) be repaid from the proceeds of the Qualified Offering within five days from the closing of the Qualified Offering by providing to the Company written notice of its intent to exercise such option for repayment within five days of the notice; or (b) in the event that the Noteholder does not exercise such option for repayment, then the Note shall automatically convert into shares of common stock 30 days following the closing of the Qualified Offering pursuant to the conversion terms set forth in Section 5. A "Qualified Offering" shall mean a public offering in the United States pursuant to a registration statement declared effective by the Securities and Exchange Commission pursuant to the Securities Act of 1933, with minimum gross proceeds of $5,000,000, pursuant to which the common stock is listed for trading on Nasdaq or a similar U.S. nationally-recognized stock exchange

5. <u>Conversion</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 <u>Conversion Price</u>. The Principal Balance may be converted at any time prior to the Maturity Date at the option of the Company into shares of the Company's common stock at the Conversion Price. The "Conversion Price" shall be such price equal to the lower of (i) a 50% discount to the "Qualified Offering Price," which shall be defined as the price at which the Qualified Offering is consummated and (ii) any conversion price offered to other noteholders on notes issued subsequent to the date of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 <u>Voluntary Conversion</u>. This Note is convertible at the option of the Noteholder, in Noteholder's sole discretion, in whole or in part, at any time prior to the Maturity Date or payment in full of the Note, whichever occurs first, for all or any portion of principal or interest, into shares of Common Stock of the Company at the Conversion Price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 <u>Mechanics of Conversion</u>. To effectuate a Voluntary Conversion, the Noteholder shall deliver to the Company a written Election to Convert, a form of which is attached hereto. Immediately upon receipt of the written Election to Convert, the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Noteholder, and in such name or names as the Noteholder may designate, a certificate or other documentary evidence for the full number of shares of common stock ("Common Shares") so purchased upon conversion of the Note. Such certificate or documentary evidence shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of such securities as of the date of delivery of the Election to Convert, notwithstanding that the certificate or documentary evidence representing such securities shall not actually have been delivered or that the stock transfer books of the Company shall then be closed. The Note shall be convertible, at the election of the Noteholder, either in full or from time to time in part and, in the event that the Note is converted in respect of less than all of the Common Shares specified therein at any time prior to the Maturity Date, a new Note evidencing the remaining portion of the indebtedness shall be issued by the Company to the Noteholder.

6. <u>Representations, Warranties, and Covenants of the Company</u>. In connection with the transactions provided for herein, the Company hereby represents, warrants, and covenants to Noteholder that, as of the date hereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 <u>Organization, Good Standing, and Qualification</u>. The Company is a corporation duly organized and validly existing under the laws of the State of Nevada and has all requisite corporate power and authority to carry on its business as now conducted. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on its business or properties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 <u>Authorization</u>. All corporate action has been taken on the part of the Company, its officers, and directors necessary for the authorization, execution, and delivery of this Note. Except as may be limited by applicable bankruptcy, insolvency, reorganization, or similar laws relating to or affecting the enforcement of creditors' rights, the Company has taken all corporate action required to make all of the obligations of the Company reflected in the provisions of this Note the valid and enforceable obligations they purport to be.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 <u>Compliance with Other Instruments</u>. The Company is not in violation of or in default under its Articles of Incorporation, as amended to date, or in any material respect of any term or provision of any loan, promissory note, mortgage, indebtedness, indenture, contract, agreement, instrument, judgment, order, or decree to which it is party or by which it is bound. The Company is not in violation of any federal or state statute, rule, or regulation applicable to the Company. The execution and delivery of this Note by the Company, the performance by the Company of its obligations pursuant to this Notes, and the issuance of the Common Shares, will not result in any violation of, or conflict with, or constitute a default under, the Company's Articles of Incorporation, as amended to date, or of any of its agreements material to the Company or its business, nor result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4 <u>Valid Issuance of Common Shares</u>. The Common Shares to be issued, sold, and delivered upon conversion of the Notes will be duly and validly issued, fully paid, and non-assessable and, based in part upon the representations and warranties of the Company in this Note, will be issued in compliance with all applicable federal and state securities laws.

7. <u>Representations and Warranties of Noteholder</u>. In connection with the transactions provided for herein, Noteholder hereby represents and warrants to the Company that, as of the date a Note is issued to such Noteholder:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 <u>Authorization</u>. This Note constitutes such Noteholder's valid and legally binding obligation, enforceable in accordance with its terms, except as may be limited by (a) applicable bankruptcy, insolvency, reorganization, or similar laws relating to or affecting the enforcement of creditors' rights and (b) laws relating to the availability of specific performance, injunctive relief, or other equitable remedies. Such Noteholder represents that it has full power and authority to enter into this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 <u>Purchase Entirely for Own Account</u>. Such Noteholder acknowledges that this Note is made with such Noteholder in reliance upon such Noteholder's representation to the Company that this Note and the Common Shares (collectively, the "Securities") will be acquired for investment for such Noteholder's own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that such Noteholder has no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Note, such Noteholder further represents that such Noteholder does not have any contract, undertaking, agreement, or arrangement with any person to sell, transfer, or grant participations to such person or to any third person with respect to the Securities. Notwithstanding the foregoing, such Noteholder shall have the right to transfer the Securities, all or in part, to any affiliate of Noteholder. Any such transferees shall execute and deliver appropriate documentation providing that the transferee agrees to be bound by the applicable provisions hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 <u>Disclosure of Information</u>. Such Noteholder acknowledges that they have received all the information they consider necessary or appropriate for deciding whether to acquire the Securities. Such Noteholder further represents that they have had an opportunity to ask questions and receive answers from the Company regarding the Company and this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4 <u>Investment Experience</u>. Such Noteholder is an investor in securities of companies in the development stage and acknowledges that they able to fend for themselves; can bear the economic risk of this investment; and has such knowledge and experience in financial or business matters that he, she, or it is capable of evaluating the merits and risks of an investment in the Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5 <u>Restricted Securities</u>. Noteholder understands that the Securities are characterized as "restricted securities" under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the Securities Act, only in certain limited circumstances. Such Noteholder represents that it is familiar with SEC Rule 144, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.6 <u>Legends</u>. It is understood that the Securities may bear the following legend:

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE."

8. <u>Default</u>. The occurrence of any one of the following events shall constitute an Event of Default:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The non-payment, when due, of any principal or interest pursuant to this Note, regardless of whether the Company has received notice of such non-payment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The material breach of any representation or warranty in this Note. In the event the Noteholder becomes aware of a breach of this Section, the Noteholder shall notify the Company in writing of such breach and the Company shall have ten days' notice to effect a cure of such breach;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The material breach of any covenant or undertaking in this Note, not otherwise provided for in this Section. In the event the Noteholder becomes aware of a breach of this Section, the Noteholder shall notify the Company in writing of such breach and the Company shall have ten days' notice to effect a cure of such breach;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) A default shall occur in the payment when due (subject to any applicable grace period), whether by acceleration or otherwise, of any indebtedness of the Company or an event of default or similar event shall occur with respect to such indebtedness, if the effect of such default or event (subject to any required notice and any applicable grace period) would be to accelerate the maturity of any such indebtedness or to permit the holder or holders of such indebtedness to cause such indebtedness to become due and payable prior to its express maturity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The commencement by the Company of any voluntary proceeding under any bankruptcy, reorganization, arrangement, insolvency, readjustment or debt, receivership, dissolution, or liquidation law or statute or any jurisdiction, whether now or hereafter in effect; or the adjudication of the Company as insolvent or bankrupt by a decree of a court of competent jurisdiction; or the petition or application by the Company for, acquiescence in, or consent by the Company to, the appointment of any receiver or trustee for the Company or for all or a substantial part of the property of the Company; or the assignment by the Company for the benefit of creditors; or the written admission of the Company of its inability to pay its debts as they mature; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The commencement against the Company of any proceeding relating to the Company under any bankruptcy, reorganization, arrangement, insolvency, adjustment of debt, receivership, dissolution or liquidation law or statute or any jurisdiction, whether now or hereafter in effect, provided, however, that the commencement of such a proceeding shall not constitute an Event of Default unless the Company consents to the same or admits in writing the material allegations of same, or said proceeding shall remain undismissed for 30 days; or the issuance of any order, judgment, or decree for the appointment of a receiver or trustee for the Company or for all or a substantial part of the property of the Company, which order, judgment, or decree remains undismissed for 30 days; or a warrant of attachment, execution, or similar process shall be issued against any substantial part of the property of the Company.

Upon the occurrence of any Event of Default, the Noteholder may, by written notice to the Company, declare all or any portion of the unpaid principal amount due to Noteholder, together with all accrued interest thereon, immediately due and payable. The Noteholder may also proceed against any guarantor of this obligation without waiving any rights under the terms of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Notice</u>. Any notice, request, instruction, or other document required by the terms of this Note, or deemed by any of the Parties hereto to be desirable, to be given to any other Party hereto shall be in writing and shall be given by personal delivery, overnight delivery, mailed by registered or certified mail, postage prepaid, with return receipt requested, or sent by electronic transmission to the addresses of the Parties set forth in the Subscription Agreement. The persons and addresses set forth in the Notice provision of the Subscription Agreement may be changed from time to time by a notice sent as aforesaid. If notice is given by mail in accordance with the provisions of this Section, such notice shall be conclusively deemed given upon receipt and delivery or refusal. If notice is given by electronic mail transmission in accordance with the provisions of this Section, such notice shall be conclusively deemed given at the time of delivery if between the hours of 9:00 a.m. and 5:00 p.m. Pacific time on a business day ("business hours") and if not during business hours, at 9:00 a.m. on the next business day following delivery, provided a delivery confirmation is obtained by the sender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>Choice of Law</u>. This Note and the rights of the Parties hereunder shall be governed by and construed in accordance with the laws of the State of California including all matters of construction, validity, performance, and enforcement and without giving effect to the principles of conflict of laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>Exclusive Jurisdiction and Venue</u>. The Parties agree that the state and federal courts in the County of Orange, State of California shall have sole and exclusive jurisdiction and venue for the resolution of all disputes arising under the terms of this Note and the transactions contemplated herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u>Attorneys' Fees</u>. In the event the Noteholder or any assignee thereof shall refer this Note to an attorney for collection, the Company agrees to pay all the costs and expenses incurred in attempting or effecting collection hereunder, including reasonable attorney's fees, whether or not suit is instituted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. <u>Conformity with Law</u>. It is the intention of the Company and of the Noteholder to conform strictly to applicable usury and similar laws. Accordingly, notwithstanding anything to the contrary in this Note, it is agreed that the aggregate of all charges which constitute interest under applicable usury and similar laws that are contract for, chargeable or receivable under or in respect of this Note, shall under no circumstances exceed the maximum amount of interest permitted by such laws, and any excess, whether occasioned by acceleration or maturity of this Note or otherwise, shall be canceled automatically, and if theretofore paid, shall be either refunded to the Company or credited on the principal amount of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. <u>Severability</u>. Every provision of this Note is intended to be severable. In the event any term or provision hereof is declared by a court of competent jurisdiction, to be illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the balance of the terms and provisions hereof, which terms and provisions shall remain binding and enforceable.

**[SIGNATURE PAGE FOLLOWS]**

**IN WITNESS WHEREOF**, the Company has signed and sealed this Note and delivered it as of the date first set forth above.

---

| | |
|:---|:---|
| **COMPANY:** | **COMPANY:** |
| **ALTERNATIVE BALLISTICS CORPORATION** | **ALTERNATIVE BALLISTICS CORPORATION** |
| a Nevada corporation | a Nevada corporation |
| By: | Steven Luna |
| Its: | Chief Executive Officer |

---

---

| | |
|:---|:---|
| **ACKNOWLEDGED AND AGREED:** | **ACKNOWLEDGED AND AGREED:** |
| **LUNA CONSULTANT GROUP** | **LUNA CONSULTANT GROUP** |
| By: | Vanessa Luna |
| Its: | President |

---

**FORM OF ELECTION TO CONVERT**

The undersigned, the holder(s) of the attached Note, hereby irrevocably elects to exercise the right to convert $_____________ of the Note into shares of Common Stock of Alternative Ballistics Corporation and request that the certificates for such securities be issued in the name of, and delivered to, ______________________________________________________.

---

| | |
|:---|:---|
| Dated: | SIGNATURE: |
|  | (Signature must conform in all respects to name |
|  | of Noteholder as specified in the Note) |
|  | (Insert Social Security or Federal Tax I.D. |
|  | Number of Noteholder) |
|  | IF NOTE IS HELD JOINTLY, BOTH PARTIES MUST SIGN: |
|  | (Signature must conform in all respects to name |
|  | of Noteholder as specified in the Note) |
|  | (Insert Social Security or Federal Tax I.D. |
|  | Number of Joint Noteholder) |

---

**DISCLOSURE DOCUMENT**

Offering Circular on Form 1-A

of

Alternative Ballistics Corporation

dated June 10, 2024

https://www.sec.gov/Archives/edgar/data/1834868/000149315224023306/partiiandiii.htm

## Add

**Exhibit 6.24**

**ALTERNATIVE BALLISTICS CORPORATION,** 

**A NEVADA CORPORATION**

**BRIDGE LOAN OFFERING DOCUMENTS**

***January 14, 2026***

**Documents included in this package:**

&nbsp;&nbsp;&nbsp;&nbsp;**1.** **Instructions for Payment** 

**2.** **Subscription Agreement** 

**3.** **Investor Representations and Warranties Agreement** 

**4.** **Convertible Note** 

**5.** **Disclosure Document** 

**INSTRUCTIONS FOR PAYMENT**

Review and complete the Bridge Loan Offering Documents and mail or deliver them, along with a check made payable to "Alternative Ballistics Corporation" in the amount of your investment to:

**Alternative Ballistics Corporation**

Attn: Steve Luna, Chief Executive Officer

5940 S. Rainbow Blvd.

Las Vegas, NV 89118

For any inquiries, please contact:

Steve Luna, Chief Executive Officer

Email: steve@alternativeballistics.com

Phone: 619-326-4411

We prefer you to send a wire transfer instead of a check. Please scan and email the signed Bridge Loan Offering Documents to the email address above and send the wire transfer using these instructions:

**Wiring Instructions:**

US Bank

Wire Transfer Department

P.O. Box 64830

St. Paul, MN 55164-0830

Phone: 800-872-2657

Routing Number: 122235821

For Further Credit to: Alternative Ballistics Corporation

Account Number: 157523676557

**<u>SUBSCRIPTION AGREEMENT</u>**

This SUBSCRIPTION AGREEMENT is made on January 14, 2026 by and between Alternative Ballistics Corporation, a Nevada corporation (the "Company") and Luna Consultant Group (the "Investor") (the Company and the Investor may be referred to individually as a "Party" or collectively as the "Parties") as of the date set forth on the signature page of this Agreement.

**RECITALS:**

WHEREAS, the Company is offering to Investor a $10,000 Convertible Note, convertible into shares of common stock at a 50% discount to the Qualified Offering Price (defined below) (the "Note");

WHEREAS, the Investor desires to subscribe for the Notes (and together with the shares of common stock into which the Note is convertible, referred to herein as the "Securities") for the purchase price of $10,000 (the "Purchase Price"); and

WHEREAS, this Subscription Agreement is part of a package of documents, including Instructions for Payment, Investor Representations, the Note, and Disclosure Document (hereinafter defined), all of which are incorporated herein by reference (the "Transaction Documents").

NOW THEREFORE, in consideration of the promises and respective mutual agreements herein contained, it is agreed by and between the Parties hereto as follows:

**ARTICLE I.**

**THE SECURITIES**

<u>Section 1.01. THE PURCHASE OF THE SECURITIES</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *Subscription*. The Investor is purchasing the Securities, on the terms set forth in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *Convertible Note*. The Note shall be in the form attached hereto, the terms of which are hereby incorporated herein as if such Note was fully set forth herein; provided, however, that in the event of any conflict between the express provisions of the Note and this Subscription Agreement, the provisions of the Note shall control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. Loan
 Amount. The Note shall be in the amount of $15,000. Investor shall pay for the Securities in one installment, as follows:

---

| | |
|:---|:---|
| Amount | Payment Date |
| $10000 | January 14, 2026 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. Maturity
 Date. The principal balance and all accrued and unpaid interest thereon shall be due and payable six (6) months from the date of
 the Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. Interest
 Rate. The Note shall bear an interest rate of 15% per annum.

iv. Prepayment.
 In the event of a prepayment of the Loan prior to the Maturity Date, the Company shall pay 120% of the Principal Balance plus any
 accrued and unpaid interest on the original Principal Balance of the Note.

v. Repayment
 Upon a Qualified Offering. In the event a Qualified Offering (defined below) closes prior to the Maturity Date, the Investor has
 the option (a) to be repaid from the proceeds of the Qualified Offering within five days from the closing of the Qualified Offering;
 or (b) in the event that the Investor does not exercise such option for repayment, then the Note shall automatically convert into
 shares of common stock 30 days following the closing of the Qualified Offering pursuant to the conversion terms set forth below.
 A "Qualified Offering" shall mean a public offering in the United States pursuant to a registration statement declared
 effective by the Securities and Exchange Commission (the "Commission") pursuant to the Securities Act of 1933 (the "Act"),
 with minimum gross proceeds of $5,000,000, pursuant to which the common stock is listed for trading on Nasdaq or a similar U.S. nationally-recognized
 stock exchange.

vi. Conversion.
 The Principal Balance and all accrued and unpaid interest may be converted at any time prior to the Maturity Date at the option of
 the Company into shares of common stock at the Conversion Price. The "Conversion Price" shall be such price equal to
 the lower of (i) a 50% discount to the "Qualified Offering Price," which shall be defined as the price at which the Qualified
 Offering is consummated and (ii) any conversion price offered to other noteholders on notes issued subsequent to the issue date of
 the Note.

<u>Section 1.02. CLOSING</u>.

The purchase and sale of the Securities will take place at one closing (the "Closing") at a time and date as soon as practicable after all the conditions set forth in Articles III and IV hereof have been satisfied ("Closing Date"), and at such time and location as the Investor and the Company shall agree.

<u>Section 1.03. DELIVERY</u>.

At or prior to the Closing, the Investor shall deliver to the Company the Purchase Price for the Securities and all Transaction Documents signed by the Investor. At the Closing, the Company shall deliver to the Investor all Transaction Documents counter-signed by the Company.

<u>Section 1.04. LEGENDS; SECURITIES NOT REGISTERED UNDER THE SECURITIES ACT OF 1933</u>.

The Securities have not been registered under the Securities Act of 1933, as amended (the "Act"). Each of the certificates for the Securities shall bear substantially the following legend:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE.

The Offering is not a public offering and is intended to be made pursuant to exemptions from registration as set forth in Section 4(2) of the Act and Regulation D as promulgated by the Securities and Exchange Commission ("SEC") under the Act. This Offering is also intended to be exempt from the registration requirements of various state securities laws as may be applicable.

**ARTICLE II.**

**REPRESENTATIONS AND WARRANTIES**

<u>Section 2.01. INVESTOR REPRESENTATIONS AND WARRANTIES</u>.

The Investor makes each and every one of the representations and warranties set forth in the document entitled Investor Representations and Warranties Agreement attached hereto and incorporated herein by this reference as if such document were set forth herein in its entirety.

<u>Section 2.02. COMPANY REPRESENTATIONS AND WARRANTIES</u>.

The Company hereby represents, warrants, and covenants to the Investor as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company has been duly organized and validly existing as a corporation in good standing under the laws of the state of its incorporation. The Company is duly qualified or licensed and in good standing as a foreign corporation in each jurisdiction in which its ownership or leasing of any properties or the character of its operations requires such qualification or licensing and where failure to so qualify would have a material effect on the Company. The Company has all requisite corporate power and authority, and all material and necessary authorizations, approvals, orders, licenses, certificates, and permits of and from all governmental regulatory officials and bodies to own or lease its properties and conduct its businesses as described in the Company's Offering Circular on Form 1-A dated June 10, 2024 (hereinafter, the "Disclosure Document") and the Company is doing business in compliance with all such authorizations, approvals, orders, licenses, certificates, and permits and all federal, state, and local laws, rules, and regulations concerning the business in which it is engaged except where the failure so to do business in compliance would not have a material adverse effect on the business of the Company. The disclosures herein and in the Disclosure Document concerning the effects of federal, state, and local regulation on the Company's business as currently conducted and as contemplated are correct in all material respects and do not omit to state a material fact. The Company has all corporate power and authority to enter into the Transaction Documents and to carry out the provisions and conditions hereof and thereof, and all consents, authorizations, approvals, and orders required in connection herewith and therewith have been obtained or will have been obtained prior to the Closing Date. No consent, authorization, or order of, and no filing with any court, government agency, or other body is required for the issuance of the Securities pursuant to this Agreement except with respect to applicable federal and state securities laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) This Agreement and the Transaction Documents have been duly and validly authorized, executed, and delivered by the Company and are valid and binding agreements of the Company, enforceable in accordance with their respective terms, except to the extent that the enforceability hereof or thereof may be limited by (A) bankruptcy, insolvency, reorganization, moratorium, or similar laws from time to time in effect and affecting the rights of creditors generally; (B) limitations upon the power of a court to grant specific performance or any other equitable remedy; or (C) a finding by a court of competent jurisdiction that the indemnification provisions herein are in violation of public policy. The Securities have been duly authorized and are validly issued, fully paid, and non-assessable; all corporate action required to be taken for the authorization, issue, and sale of such securities has been duly and validly taken; and to the best knowledge of the Company, the Securities are not and will not be subject to the preemptive rights of any stockholder of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Company has good and marketable title to, or valid and enforceable leasehold estates in, all items of real and personal property owned or leased by it, free and clear of all liens, claims, encumbrances, security interests, and defects of any material nature whatsoever, except for Permitted Liens. "Permitted Liens" means liens, claims, encumbrances, security interests, and defects of any material nature whatsoever that are described in the Disclosure Document or otherwise disclosed to the Investor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) There is no litigation or governmental proceeding pending or threatened against or involving the properties or business of the Company which the Company believes would materially adversely affect the value or the operation of the properties or the business of the Company, except as set forth in the Disclosure Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) There has been no material adverse change in the condition or prospects for commercialization of the Company, financial or otherwise, as of the latest dates as of which such condition or prospects, respectively, are set forth in this Agreement and the Disclosure Document; and the outstanding debt, property, and the business of the Company conform in all material respects to the descriptions thereof contained herein and therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Securities shall conform in all respects to all statements in relation thereto contained herein or in the Disclosure Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Company is not in material violation of its Articles of Incorporation, or its Bylaws. Neither the execution and delivery of the Transaction Documents, nor the issuance of the Securities, nor the consummation of any of the transactions contemplated herein or in the Note, nor the compliance by the Company with the terms and provisions contained herein, or in the Note, has conflicted with or will conflict with, or has resulted in or will result in a breach of, any of the terms and provisions of, or has constituted or will constitute a default under, or has resulted in or will result in the creation or imposition of any lien, charge, or encumbrance upon any property or assets of the Company pursuant to the terms of any indenture, mortgage, deed of trust, note, loan or credit agreement, or any other agreement or instrument evidencing an obligation for borrowed money, or any other agreement or instrument to which the Company is subject; nor will such action result in any violation of the provisions of the Articles of Incorporation or the Bylaws of the Company, or any statute or any order, rule, or regulation applicable to the Company of any court or of any federal, state, or other regulatory authority or other government body having jurisdiction over the Company; except for any conflict, breach, default, lien, charge, or encumbrance which does not have a material and adverse effect on the Company, any of its business, property, or assets or any transactions contemplated hereby or by the Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Subsequent to the dates as of which information is given in this Agreement or the Disclosure Document, and except as may otherwise be indicated or contemplated herein or therein, the Company has not entered into any transaction other than in the ordinary course of business or declared or paid any dividend or made any other distribution on or in respect of its capital stock. The Investor acknowledges that the Company may conduct financing activities in the future which would result in the issuance of securities of the Company to third parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Company owns or possesses, free and clear of all liens or encumbrances and rights thereto or therein by third parties, other than Permitted Liens, the requisite licenses or other rights to use all trademarks, service marks, copyrights, service names, trade names, patents, patents applications, and licenses necessary to conduct and material to their businesses (including, without limitation any such licenses or rights described herein as being owned or possessed by the Company), and there is no material claim or action by any person pertaining to, or proceeding, pending or threatened, which challenges the exclusive rights of the Company with respect to any trademarks, service marks, copyrights, service names, trade names, patents, patent applications, and licenses used in the conduct of the Company's business (including, without limitation, any such licenses or rights described herein or in the Disclosure Document as being owned or possessed by the Company); the Company's current products, services, and processes do not and will not infringe on any patents currently held by third parties, to the best knowledge of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Neither the Disclosure Document nor any of the documents contained in the Transaction Documents contain any untrue statement of a material fact or omits to state any material fact required to be stated herein or therein or necessary to make the statements herein or therein, considering the circumstances under which they were made, not misleading. All statements of material facts herein or therein (including, without limitation, any attachment, exhibit, or schedule hereto or thereto) are true and correct as of the date hereof and will be true and correct on the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) The Company shall use the proceeds from this Offering for costs and expenses of related to its initial public offering as well as for general working capital purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) Neither the Company, nor any of its respective officers, directors, employees, or agents, nor any other person acting on behalf of the Company has, directly or indirectly, given or agreed to give any money, gift, or similar benefit (other than legal price concessions to customers in the ordinary course of business) to any customer, supplier, employee, or agent of a customer or supplier, or official or employee of a customer or supplier, or official or employee of any governmental agency or instrumentality of any government (domestic or foreign) or any political party or candidate for office (domestic or foreign), or other person who is or may be in a position to help or hinder the business of the Company (or assist it in connection with any actual or proposed transaction) which (A) might subject the Company to any damage or penalty in any civil, criminal, or governmental litigation or proceeding; (B) if not given in the past, might have had a materially adverse effect on the assets, business, or operations of the Company as reflected in the financial statements delivered to the Investor, if any; or (C) if not continued in the future, might adversely affect the assets, business, operations, or prospects of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) The Company has not paid or promised to pay any form of compensation to any unlicensed finders, whether in the form of finder's fees, origination fees, referral fees, or otherwise, in connection with this Offering.

**ARTICLE III.**

**CONDITIONS TO THE INVESTOR'S OBLIGATIONS**

The obligation of the Investor to purchase the Securities at Closing is subject to the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The representations and warranties of the Company contained herein shall be true and correct in all material respects on and as of the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) There shall be no preliminary or permanent injunction or other order, decree, or ruling issued by a court of competent jurisdiction or by a governmental, regulatory, or administrative agency or commission, nor any statute, rule, regulation, or order promulgated or enacted by any governmental authority, prohibiting, or otherwise restraining the sale or purchase of the Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) On or prior to the Closing Date, the Investor shall have been furnished such documents, certificates, and opinions as they may reasonably require for the purpose of enabling them to review or pass upon the matters set forth herein, or in order to evidence the accuracy, completeness, or satisfaction of any of the representations, warranties, or conditions herein contained.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Prior to the Closing, (i) there shall have been no material adverse change nor development involving a prospective change in the condition, prospects, or the business activities, financial or otherwise, of the Company as a whole, from the latest dates as of which such condition is set forth in this Subscription Agreement and the Disclosure Document; (ii) there shall have been no transaction, not in the ordinary course of business, entered into by the Company from the latest date as of which the financial condition of the Company is set forth in this Subscription Agreement which is material to the Company and which has not been disclosed to the Investor in writing; (iii) the Company shall not be in default in any material respect under any provision of any instrument relating to any outstanding indebtedness; (iv) no material amount of the assets of the Company shall have been pledged or mortgaged; and (v) no action, suit, or proceeding, at law or in equity, shall have been pending or threatened against the Company or affecting any of its respective properties or businesses before or by any court of federal or state commission, board, or other administrative agency wherein an unfavorable decision, ruling, or finding could materially adversely affect the business, operations, prospects, or financial condition or income of the Company.

**ARTICLE IV.**

**CONDITIONS TO THE COMPANY'S OBLIGATIONS**

The obligation of the Company to sell the Securities under this Agreement at the Closing is subject to the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The representations and warranties of the Investor contained in the document entitled Investor Representations and Warranties Agreement attached hereto shall be true and correct in material respects on and as of the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) There shall be no preliminary or permanent injunction or other order, decree, or ruling issued by a court of competent jurisdiction or by a governmental, regulatory, or administrative agency or commission, nor any statute, rule, regulation, or order promulgated or enacted by any governmental authority, prohibiting, or otherwise restraining the sale or purchase of the Securities.

**ARTICLE V.**

**INDEMNIFICATION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company hereby agrees to defend, indemnify, and hold harmless the Investor, their stockholders, directors, partners, employees, agents, attorneys, and each person, if any, who controls such Investor within the meaning of the Act against any and all losses, claims, damages, or liabilities to which such Investor or any such stockholder, director, partner, employee, agent, attorney, or controlling person may become subject under the Act or otherwise, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained herein, in the Disclosure Document, or in any statement made to or in any filing with the Commission or to or with any state securities commission, bureau, or office (including any amendments thereto), or arise out of or based upon the omission or alleged omission to state herein or therein a material fact required to be stated herein or therein or necessary to make the statements herein or therein not misleading (unless such statements are made or omitted in reliance upon and in conformity with written information furnished to the Company with respect to such Investor by such Investor expressly for use herein or therein or any amendment hereof or supplement hereto), or any violation by the Company of the Act or state "blue sky" laws, or any breach by the Company of their obligations, representations, or warranties hereunder or with respect to the Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Investor hereby agrees to defend, indemnify, and hold harmless the Company and its respective stockholders, directors, employees, agents, and each person, if any, who controls any of the foregoing within the meaning of the Act against any and all losses, claims, damages, or liabilities to which the Company or any of the Company's stockholders, directors, employees, agents, or controlling persons may become subject under the Act or otherwise, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any written statement as it relates to the Offering, as made by the Investor, its stockholders, directors, partners, agents, or employees or any breach by such Investor of its obligations, representations, or warranties hereunder, provided that such statement or breach was made knowingly and intentionally.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Promptly after receipt by an indemnified party under either subparagraph (a) or (b), as the case may be, of the notice of commencement of any action covered by subparagraph (a) or (b), such indemnified party shall within five business days notify the indemnifying party of the commencement thereof; the omission by one indemnified party to so notify such indemnifying party shall not relieve the indemnifying party of its obligations hereunder except to the extent such indemnifying party has been materially prejudiced by such omission, shall not relieve the indemnifying party of its obligation to indemnify any other indemnified party that has given such notice and shall not relieve the indemnifying party of any liability outside of this indemnification. If any action is brought against the indemnified party, it shall notify the indemnifying party in a timely manner, the indemnifying party will be entitled to participate in such action and, to the extent it may desire, to assume and control the defense thereof with counsel chosen by it. After notice from the indemnifying party to such indemnified party of its election to so assume the defense thereof, the indemnifying party will not be liable to such indemnified party under such subparagraph for any legal or other expense subsequently incurred by such indemnified party in connection with the defense thereof, but the indemnified party may, at its own expenses, participate in such defense by counsel chosen by it without, however, impairing the indemnifying party's control of the defense. Notwithstanding anything to the contrary contained herein, the indemnified party shall have the right to choose its own counsel and control the defense of any action, all at the reasonable expense of the indemnifying party, if (i) the employment of such counsel shall have been authorized in writing by the indemnifying party in connection with the defense of such action at the expense of the indemnifying party; (ii) the indemnifying party shall not have employed counsel reasonably satisfactory to such indemnified party to have charge of the defense of such action within a reasonable time after notice of commencement of the action; or (iii) such indemnified party shall have reasonably concluded that there may be defenses available to such indemnified party that differ from the defenses available to the indemnifying party (in which case the indemnifying party shall not have the right to direct the defense of such action on behalf of such indemnified party), in any of which events such reasonable fees and expenses of one additional counsel (for all indemnified parties) shall be borne by the indemnifying party (in the case of the Investor, one additional counsel for Investor). No settlement of any action or proceeding against an indemnified party shall be made without the consent of the indemnified party, which consent shall not be unreasonably withheld.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) In order to provide for just and equitable contribution under the Act in any case in which (i) any indemnified party makes a claim for indemnification pursuant to this paragraph but it is judicially determined (by entry of a final judgment or decree by a court of competent jurisdiction and the expiration of the time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case, notwithstanding the fact the this paragraph provides for indemnification in such case, or (ii) contribution under the Act is required on the part of any such person in circumstances for which indemnification is provided under this paragraph, then, in each such case, the Company shall be solely responsible for all aggregate losses, claims, damages, or liabilities, and the Investor shall not be required to contribute to these losses beyond the amount of the Securities purchased by such Investor pursuant to the Subscription Agreement; provided, that in any such case, no person guilty of a fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

**ARTICLE VI.**

**NOTICES**

Any notice, request, instruction, or other document required by the terms of this Agreement, or deemed by any of the Parties hereto to be desirable, to be given to any other Party hereto shall be in writing and shall be given by personal delivery, overnight delivery, mailed by registered or certified mail, postage prepaid, with return receipt requested, or sent by electronic mail (with receipt confirmed) to the addresses of the Parties as follows:

---

| | |
|:---|:---|
| Company: | Alternative Ballistics Corporation |
|  | 5940 S. Rainbow Blvd. |
|  | Las Vegas, NV 89118 |
|  | Email: steve@alternativeballistics.com |
|  | Attn: Steven Luna, CEO |
| Investor: | At the address below Investor's signature on this Agreement |

---

The persons and addresses set forth above may be changed from time to time by a notice sent as aforesaid. If notice is given by personal delivery or overnight delivery in accordance with the provisions of this Section, such notice shall be conclusively deemed given at the time of such delivery provided a receipt is obtained from the recipient. If notice is given by mail in accordance with the provisions of this Article, such notice shall be conclusively deemed given upon receipt and delivery or refusal. If notice is given by electronic mail transmission in accordance with the provisions of this Article, such notice shall be conclusively deemed given at the time of delivery if during business hours and if not during business hours, at the next business day after delivery, provided a confirmation is obtained by the sender.

**ARTICLE VII.**

**MISCELLANEOUS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of California applicable to contracts made and to be performed entirely therein, without giving effect to the rules of conflicts of law. The Parties agree that the courts of the County of Orange, State of California shall have sole and exclusive jurisdiction and venue for the resolution of all disputes arising under the terms of this Agreement and the transactions contemplated herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) This Agreement represents the entire agreement between the Parties relating to the subject matter hereof, superseding any and all prior to contemporaneous oral and prior written agreements and understandings. This Agreement may not be modified or amended, nor may any right be waived except by a writing signed by the party against whom the modification or waiver is sought to be enforced.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The warranties, representations, and covenants of the Company and the Investor contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The captions and headings contained herein are solely for convenience of reference and do not constitute a part of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Each of the Transaction Documents is hereby incorporated herein as if each of such attachments were fully set forth herein in its entirety. Each of such attachments is hereby expressly made a part of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The Parties agree that this Agreement may be executed by facsimile signatures and such signatures shall be deemed originals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) All Parties to this Agreement have been given the opportunity to consult with counsel of their choice regarding their rights under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The term "days," as used in this Agreement and in all documents contained in the Transaction Documents, refers to calendar days unless otherwise clearly indicated.

**[SIGNATURE PAGE FOLLOWS]**

**IN WITNESS WHEREOF**, intending to be legally bound, the Parties hereto have executed this Agreement as of the November 14, 2025.

---

| | |
|:---|:---|
| **COMPANY:** | **COMPANY:** |
| **Alternative Ballistics Corporation,** | **Alternative Ballistics Corporation,** |
| a Nevada corporation | a Nevada corporation |
| */s/ Steven Luna* | */s/ Steven Luna* |
| By: | Steven Luna |
| Its: | Chief Executive Officer |

---

---

| | |
|:---|:---|
| **INVESTOR:** | **INVESTOR:** |
| **Luna Consultant Group** | **Luna Consultant Group** |
| */s/ Vanessa Luna* | */s/ Vanessa Luna* |
| By: | Vanessa Luna |
| Its: | President |

---

**PLEASE CHECK ONE:**

I. **If INVESTOR is an individual**:

I certify that I am an "accredited investor" because:

---

| | |
|:---|:---|
| **1.** ☐ | I had an individual income of more than $200,000 in each of the two most recent calendar years, and I reasonably expect to have an individual income in excess of $200,000 in the current calendar year; or my spouse and I had joint income in excess of $300,000 in each of the two most recent calendar years, and we reasonably expect to have a joint income in excess of $300,000 in the current calendar year; **or** |
| **2.** ☐ | I have an individual net worth, or my spouse and I have a joint net worth, in excess of $1,000,000 (excluding my (our) primary residence); or |
| **3.** ☐ | I hold, in good standing, a Series 7, Series 65, or Series 82 license. |

---

II. **If INVESTOR is a corporation, partnership, employee benefit plan or IRA**, it certifies as follows:

&nbsp;&nbsp;&nbsp;&nbsp;A. Has
 the subscribing entity been formed for the specific purpose of investing in the Securities?

---

| | |
|:---|:---|
| **☐ YES** | **☐ **NO** |

---

If your answer to question A is "No" CHECK whichever of the following statements (1-5) is applicable to you. If your answer to question A is "Yes" the subscribing entity must be able to certify to statement **(B)** below in order to qualify as an "accredited investor."

The undersigned entity certifies that it is an "accredited investor" because it is:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** ☐ an employee benefit
 plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974, provided that the investment decision is
 made by a plan fiduciary, as defined in section 3(21) of such Act, and the plan fiduciary is a bank, savings and loan association,
 insurance company or registered investment adviser; **or** 

**2.** ☐ an employee benefit
 plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974 that has total assets in excess of $5,000,000; **or** 

**3.** ☐ each of its shareholders,
 partners, or beneficiaries meets at least one of the following conditions described above under INDIVIDUAL ACCREDITED INVESTOR STATUS.
 Please also CHECK the appropriate space in that section; **or** 

**4.** ☐ the plan is a self
 directed employee benefit plan and the investment decision is made solely by a person that meets at least one of the conditions described
 above under INDIVIDUAL ACCREDITED INVESTOR STATUS; **or** 

**5.** ☐ a corporation, a
 partnership or a Massachusetts or similar business trust with total assets in excess of $5,000,000; **or** 

**6.** ☐ all equity owners
 are Accredited Investors.

&nbsp;&nbsp;&nbsp;&nbsp;B. If
 the answer to Question A above is "Yes," please certify the statement below is true and correct:

☐ The undersigned entity certifies that it is an accredited investor because each of its shareholder or beneficiaries meets at least one of the following conditions described above under INDIVIDUAL ACCREDITED INVESTOR STATUS. Please also CHECK the appropriate space in that section.

III. **If INVESTOR is a Trust**, it certifies as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Has the subscribing entity been formed for the specific purpose of investing in the Securities?

---

| | |
|:---|:---|
| **☐ YES** | **☐ **NO** |

---

If your answer to question A is "No" CHECK whichever of the following statements (1-3) is applicable to the subscribing entity. If your answer to question A is "Yes" the subscribing entity must be able to certify to the statement **(3)** below in order to qualify as an "accredited investor."

The undersigned trustee certifies that the trust is an "accredited investor" because:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** ☐ the trust has total
 assets in excess of $5,000,000 and the investment decision has been made by a "sophisticated person"; **or** 

**2.** ☐ the trustee making
 the investment decision on its behalf is a bank (as defined in Section 3(a)(2) of acc), a saving and loan association or other institution
 as defined in Section 3(a)(5)(A) of the Securities Act, acting in its fiduciary capacity; **or** 

**3.** ☐ the
 undersigned trustee certifies that the trust is an accredited investor because the grantor(s) of the trust may revoke the trust at
 any time and regain title to the trust assets and has (have) retained sole investment control over the assets of the trust and the
 (each) grantor(s) meets at least one of the following conditions described above under INDIVIDUAL ACCREDITED INVESTOR STATUS. Please
 also CHECK the appropriate space in that section.

---

| |
|:---|
| **Print Name: Vanessa Luna** |
| [Signature] |
| 315 Calgrove Street |
| Address |
| Las Vegas, NV 89138 |
| Address |
| Email Address |
| Social Security/Tax I.D. Number |

---

**INVESTOR REPRESENTATIONS AND WARRANTIES AGREEMENT**

This INVESTOR REPRESENTATIONS AND WARRANTIES AGREEMENT ("Agreement"), dated as of the date set forth on the signature page of this Agreement, is by and between Alternative Ballistics Corporation, a Nevada corporation (the "Company") and the purchaser set forth on the signature page of this Agreement, or assigns (the "Investor") (the Company and the Investor may be referred to individually as a "Party" and, collectively, as the "Parties").

**RECITALS:**

This Agreement is being made pursuant to an Offering by the Company of the purchase of a Convertible Note (the "Note") to purchase shares of common stock (collectively with the Note, the shares of common stock into which the Note is convertible, the "Securities"). The Securities are being issued on the Closing (as defined in the Subscription Agreement) pursuant to a Subscription Agreement of even date herewith between the Company and the Investor which contains representations and warranties and additional covenants of the Company with respect to the sale of the Securities. Capitalized terms not otherwise defined herein shall have the meaning set forth in the Subscription Agreement. THE PROVISIONS OF THE SUBSCRIPTION AGREEMENT ARE INCORPORATED HEREIN BY REFERENCE.

**ARTICLE 1.**

**REPRESENTATIONS AND WARRANTIES OF THE INVESTOR**

The Investor hereby represents and warrants that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Investor acknowledges that the Securities are "restricted securities" (as such term is defined in Rule 144 promulgated under the Securities Act of 1933, as amended ("Rule 144"), that the Securities will include the restrictive legend set forth in Section 1.04 of the Subscription Agreement, and, except as otherwise set forth in the Subscription Agreement, that the Securities cannot be sold unless registered with the United States Securities and Exchange Commission ("SEC") and qualified by appropriate state securities regulators, or unless Investor otherwise complies with an exemption from such registration and qualification (including, without limitation, compliance with Rule 144).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Investor has adequate means of providing for current needs and contingencies, has no need for liquidity in the investment, and is able to bear the economic risk of an investment in the Securities. Investor represents that Investor is able to bear the economic risk of the investment and at the present time could afford a complete loss of such investment. Investor has reviewed the Transaction Documents with care. Additionally, Investor has had a full opportunity to inspect the Disclosure Document and to make any and all inquiries of Company officers and directors regarding the Company and its business as Investor has deemed appropriate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Investor is an "Accredited Investor" as defined in Regulation D of the Act. Investor, either alone or with Investor's professional advisers who are unaffiliated with, have no equity interest in, and are not compensated by the Company or any affiliate or selling agent of the Company, directly or indirectly, has sufficient knowledge and experience in financial and business matters that Investor is capable of evaluating the merits and risks of an investment in the Securities offered by the Company and of making an informed investment decision with respect thereto and has the capacity to protect Investor's own interests in connection with Investor's proposed investment in the Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Investor is acquiring the Securities solely for Investor's own account as principal, for investment purposes only and not with a view to the resale or distribution thereof, in whole or in part, and no other person or entity has a direct or indirect beneficial interest in such Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Investor will not sell or otherwise transfer the Securities without registration under the Act or an exemption therefrom and fully understands and agrees that Investor must bear the economic risk of Investor's purchase for an indefinite period of time because, among other reasons, the Securities have not been registered under the Act or under the securities laws of any state and, therefore, cannot be resold, pledged, assigned, or otherwise disposed of unless they are subsequently registered under the Act and under the applicable securities laws of such states or unless an exemption from such registration is available.

**ARTICLE 2.**

**MISCELLANEOUS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of California applicable to contracts made and to be performed entirely therein, without giving effect to the rules of conflicts of law. The Parties agree that the courts of the County of Orange, State of California shall have sole and exclusive jurisdiction and venue for the resolution of all disputes arising under the terms of this Agreement and the transactions contemplated herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The warranties and representations of the Investor contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The Parties agree that this Agreement may be executed by facsimile signatures and such signatures shall be deemed originals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) All Parties to this Agreement have been given the opportunity to consult with counsel of their choice regarding their rights under this Agreement.

**IN WITNESS WHEREOF**, intending to be legally bound, the Parties hereto have executed this Agreement as of November 14, 2025.

---

| | |
|:---|:---|
| **COMPANY:** | **COMPANY:** |
| **Alternative Ballistics Corporation,** <br> a Nevada corporation | **Alternative Ballistics Corporation,** <br> a Nevada corporation |
| By: | Steven Luna |
| Its: | Chief Executive Officer |

---

---

| | |
|:---|:---|
| **INVESTOR:** | **INVESTOR:** |
| **Luna Consultant Group** | **Luna Consultant Group** |
| By: | Vanessa Luna |
| Its: | President |

---

**THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE OFFERED, SOLD TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE.**

**ALTERNATIVE BALLISTICS CORPORATION, A NEVADA CORPORATION**

**CONVERTIBLE NOTE**

This Convertible Note (this "Note") has been issued pursuant to a Subscription Agreement dated November 14, 2025 (the "Subscription Agreement") between the Company and the holder of this Note (the "Noteholder"). Capitalized terms not otherwise defined herein shall have the meaning set forth in the Subscription Agreement, the provisions of which are incorporated herein by reference.

---

| | |
|:---|:---|
| **$10000** | **Date: January 14, 2026** |

---

1. <u>The Obligation</u>. FOR VALUE RECEIVED, the undersigned, Alternative Ballistics Corporation, a Nevada corporation (the "Company"), hereby promises to pay to the order of Luna Consultant Group, or its assigns (collectively, the "Noteholder"), in lawful money of the United States of America, and in immediately payable funds, the principal sum of $10,000 (the "Obligation"). The principal amount loaned by Noteholder to the Company shall accrue interest thereon from the date of this Note. Interest shall be paid according to Section 2 below and all amounts due under this Note shall be paid upon the Maturity Date set forth in Section 3 below. The Company has the right to assign this Note upon written notice to the Noteholder. (The Noteholder and the Company may be referred to individually as a "Party" and collectively as the "Parties" in this Note.)

2. <u>Interest</u>. The principal amount of this Note that may be outstanding from time to time shall bear interest at a rate equal to 15% per annum. Interest, if any, shall be computed hereunder based on a 365-day year and paid for the actual number of days elapsed for any whole or partial month in which principal is outstanding, which interest shall then be due and payable on the Maturity Date.

3. <u>Payment Terms</u>. The principal and interest of this Note shall be due and payable to the Noteholder six (6) months from the date of this Note (the "Maturity Date") unless all principal and interest due under this Note have been prepaid pursuant to Section 4 herein or converted pursuant to Section 5 herein. Payments are to be made to the Noteholder at its address stated in the Subscription Agreement (or such other address as is designated by the Noteholder) in lawful money of the United States of America. Unless otherwise specified, payments received by the Noteholder pursuant to the terms hereof shall be applied, first, to the payment of all expenses, charges, late payment fees, costs, and fees incurred by or payable to the Noteholder and for which the Company is obligated pursuant to the terms of this Note; second, to the payment of interest; and third, to the payment of principal.

4. <u>Prepayment</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1. <u>Prepayment</u>. The Company shall have the right to prepay all or any portion of the Loan outstanding at any time; provided, however, in the event of a prepayment, the Company shall pay 120% of the Principal Balance plus accrued and unpaid interest on the original Principal Balance of the Note. The Company shall deliver a notice of prepayment to Noteholder, which notice shall specify a prepayment date not less than 15 nor more than 30 days from the date of such notice (the "Prepayment Date"); provided, however, that the Investor will continue to have the right to convert the Note until the close of business of the fifth business day prior to the Prepayment Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 <u>Repayment Upon a Qualified Offering</u>. The Company shall immediately notify the Noteholder in the event a Qualified Offering (defined below) closes prior to the Maturity Date. Following such notice, the Noteholder has the option to (a) be repaid from the proceeds of the Qualified Offering within five days from the closing of the Qualified Offering by providing to the Company written notice of its intent to exercise such option for repayment within five days of the notice; or (b) in the event that the Noteholder does not exercise such option for repayment, then the Note shall automatically convert into shares of common stock 30 days following the closing of the Qualified Offering pursuant to the conversion terms set forth in Section 5. A "Qualified Offering" shall mean a public offering in the United States pursuant to a registration statement declared effective by the Securities and Exchange Commission pursuant to the Securities Act of 1933, with minimum gross proceeds of $5,000,000, pursuant to which the common stock is listed for trading on Nasdaq or a similar U.S. nationally-recognized stock exchange

5. <u>Conversion</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 <u>Conversion Price</u>. The Principal Balance may be converted at any time prior to the Maturity Date at the option of the Company into shares of the Company's common stock at the Conversion Price. The "Conversion Price" shall be such price equal to the lower of (i) a 50% discount to the "Qualified Offering Price," which shall be defined as the price at which the Qualified Offering is consummated and (ii) any conversion price offered to other noteholders on notes issued subsequent to the date of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 <u>Voluntary Conversion</u>. This Note is convertible at the option of the Noteholder, in Noteholder's sole discretion, in whole or in part, at any time prior to the Maturity Date or payment in full of the Note, whichever occurs first, for all or any portion of principal or interest, into shares of Common Stock of the Company at the Conversion Price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 <u>Mechanics of Conversion</u>. To effectuate a Voluntary Conversion, the Noteholder shall deliver to the Company a written Election to Convert, a form of which is attached hereto. Immediately upon receipt of the written Election to Convert, the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Noteholder, and in such name or names as the Noteholder may designate, a certificate or other documentary evidence for the full number of shares of common stock ("Common Shares") so purchased upon conversion of the Note. Such certificate or documentary evidence shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of such securities as of the date of delivery of the Election to Convert, notwithstanding that the certificate or documentary evidence representing such securities shall not actually have been delivered or that the stock transfer books of the Company shall then be closed. The Note shall be convertible, at the election of the Noteholder, either in full or from time to time in part and, in the event that the Note is converted in respect of less than all of the Common Shares specified therein at any time prior to the Maturity Date, a new Note evidencing the remaining portion of the indebtedness shall be issued by the Company to the Noteholder.

6. <u>Representations, Warranties, and Covenants of the Company</u>. In connection with the transactions provided for herein, the Company hereby represents, warrants, and covenants to Noteholder that, as of the date hereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 <u>Organization, Good Standing, and Qualification</u>. The Company is a corporation duly organized and validly existing under the laws of the State of Nevada and has all requisite corporate power and authority to carry on its business as now conducted. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on its business or properties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 <u>Authorization</u>. All corporate action has been taken on the part of the Company, its officers, and directors necessary for the authorization, execution, and delivery of this Note. Except as may be limited by applicable bankruptcy, insolvency, reorganization, or similar laws relating to or affecting the enforcement of creditors' rights, the Company has taken all corporate action required to make all of the obligations of the Company reflected in the provisions of this Note the valid and enforceable obligations they purport to be.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 <u>Compliance with Other Instruments</u>. The Company is not in violation of or in default under its Articles of Incorporation, as amended to date, or in any material respect of any term or provision of any loan, promissory note, mortgage, indebtedness, indenture, contract, agreement, instrument, judgment, order, or decree to which it is party or by which it is bound. The Company is not in violation of any federal or state statute, rule, or regulation applicable to the Company. The execution and delivery of this Note by the Company, the performance by the Company of its obligations pursuant to this Notes, and the issuance of the Common Shares, will not result in any violation of, or conflict with, or constitute a default under, the Company's Articles of Incorporation, as amended to date, or of any of its agreements material to the Company or its business, nor result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4 <u>Valid Issuance of Common Shares</u>. The Common Shares to be issued, sold, and delivered upon conversion of the Notes will be duly and validly issued, fully paid, and non-assessable and, based in part upon the representations and warranties of the Company in this Note, will be issued in compliance with all applicable federal and state securities laws.

7. <u>Representations and Warranties of Noteholder</u>. In connection with the transactions provided for herein, Noteholder hereby represents and warrants to the Company that, as of the date a Note is issued to such Noteholder:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 <u>Authorization</u>. This Note constitutes such Noteholder's valid and legally binding obligation, enforceable in accordance with its terms, except as may be limited by (a) applicable bankruptcy, insolvency, reorganization, or similar laws relating to or affecting the enforcement of creditors' rights and (b) laws relating to the availability of specific performance, injunctive relief, or other equitable remedies. Such Noteholder represents that it has full power and authority to enter into this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 <u>Purchase Entirely for Own Account</u>. Such Noteholder acknowledges that this Note is made with such Noteholder in reliance upon such Noteholder's representation to the Company that this Note and the Common Shares (collectively, the "Securities") will be acquired for investment for such Noteholder's own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that such Noteholder has no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Note, such Noteholder further represents that such Noteholder does not have any contract, undertaking, agreement, or arrangement with any person to sell, transfer, or grant participations to such person or to any third person with respect to the Securities. Notwithstanding the foregoing, such Noteholder shall have the right to transfer the Securities, all or in part, to any affiliate of Noteholder. Any such transferees shall execute and deliver appropriate documentation providing that the transferee agrees to be bound by the applicable provisions hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 <u>Disclosure of Information</u>. Such Noteholder acknowledges that they have received all the information they consider necessary or appropriate for deciding whether to acquire the Securities. Such Noteholder further represents that they have had an opportunity to ask questions and receive answers from the Company regarding the Company and this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4 <u>Investment Experience</u>. Such Noteholder is an investor in securities of companies in the development stage and acknowledges that they able to fend for themselves; can bear the economic risk of this investment; and has such knowledge and experience in financial or business matters that he, she, or it is capable of evaluating the merits and risks of an investment in the Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5 <u>Restricted Securities</u>. Noteholder understands that the Securities are characterized as "restricted securities" under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the Securities Act, only in certain limited circumstances. Such Noteholder represents that it is familiar with SEC Rule 144, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.6 <u>Legends</u>. It is understood that the Securities may bear the following legend:

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE."

8. <u>Default</u>. The occurrence of any one of the following events shall constitute an Event of Default:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The non-payment, when due, of any principal or interest pursuant to this Note, regardless of whether the Company has received notice of such non-payment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The material breach of any representation or warranty in this Note. In the event the Noteholder becomes aware of a breach of this Section, the Noteholder shall notify the Company in writing of such breach and the Company shall have ten days' notice to effect a cure of such breach;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The material breach of any covenant or undertaking in this Note, not otherwise provided for in this Section. In the event the Noteholder becomes aware of a breach of this Section, the Noteholder shall notify the Company in writing of such breach and the Company shall have ten days' notice to effect a cure of such breach;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) A default shall occur in the payment when due (subject to any applicable grace period), whether by acceleration or otherwise, of any indebtedness of the Company or an event of default or similar event shall occur with respect to such indebtedness, if the effect of such default or event (subject to any required notice and any applicable grace period) would be to accelerate the maturity of any such indebtedness or to permit the holder or holders of such indebtedness to cause such indebtedness to become due and payable prior to its express maturity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The commencement by the Company of any voluntary proceeding under any bankruptcy, reorganization, arrangement, insolvency, readjustment or debt, receivership, dissolution, or liquidation law or statute or any jurisdiction, whether now or hereafter in effect; or the adjudication of the Company as insolvent or bankrupt by a decree of a court of competent jurisdiction; or the petition or application by the Company for, acquiescence in, or consent by the Company to, the appointment of any receiver or trustee for the Company or for all or a substantial part of the property of the Company; or the assignment by the Company for the benefit of creditors; or the written admission of the Company of its inability to pay its debts as they mature; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The commencement against the Company of any proceeding relating to the Company under any bankruptcy, reorganization, arrangement, insolvency, adjustment of debt, receivership, dissolution or liquidation law or statute or any jurisdiction, whether now or hereafter in effect, provided, however, that the commencement of such a proceeding shall not constitute an Event of Default unless the Company consents to the same or admits in writing the material allegations of same, or said proceeding shall remain undismissed for 30 days; or the issuance of any order, judgment, or decree for the appointment of a receiver or trustee for the Company or for all or a substantial part of the property of the Company, which order, judgment, or decree remains undismissed for 30 days; or a warrant of attachment, execution, or similar process shall be issued against any substantial part of the property of the Company.

Upon the occurrence of any Event of Default, the Noteholder may, by written notice to the Company, declare all or any portion of the unpaid principal amount due to Noteholder, together with all accrued interest thereon, immediately due and payable. The Noteholder may also proceed against any guarantor of this obligation without waiving any rights under the terms of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Notice</u>. Any notice, request, instruction, or other document required by the terms of this Note, or deemed by any of the Parties hereto to be desirable, to be given to any other Party hereto shall be in writing and shall be given by personal delivery, overnight delivery, mailed by registered or certified mail, postage prepaid, with return receipt requested, or sent by electronic transmission to the addresses of the Parties set forth in the Subscription Agreement. The persons and addresses set forth in the Notice provision of the Subscription Agreement may be changed from time to time by a notice sent as aforesaid. If notice is given by mail in accordance with the provisions of this Section, such notice shall be conclusively deemed given upon receipt and delivery or refusal. If notice is given by electronic mail transmission in accordance with the provisions of this Section, such notice shall be conclusively deemed given at the time of delivery if between the hours of 9:00 a.m. and 5:00 p.m. Pacific time on a business day ("business hours") and if not during business hours, at 9:00 a.m. on the next business day following delivery, provided a delivery confirmation is obtained by the sender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>Choice of Law</u>. This Note and the rights of the Parties hereunder shall be governed by and construed in accordance with the laws of the State of California including all matters of construction, validity, performance, and enforcement and without giving effect to the principles of conflict of laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>Exclusive Jurisdiction and Venue</u>. The Parties agree that the state and federal courts in the County of Orange, State of California shall have sole and exclusive jurisdiction and venue for the resolution of all disputes arising under the terms of this Note and the transactions contemplated herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u>Attorneys' Fees</u>. In the event the Noteholder or any assignee thereof shall refer this Note to an attorney for collection, the Company agrees to pay all the costs and expenses incurred in attempting or effecting collection hereunder, including reasonable attorney's fees, whether or not suit is instituted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. <u>Conformity with Law</u>. It is the intention of the Company and of the Noteholder to conform strictly to applicable usury and similar laws. Accordingly, notwithstanding anything to the contrary in this Note, it is agreed that the aggregate of all charges which constitute interest under applicable usury and similar laws that are contract for, chargeable or receivable under or in respect of this Note, shall under no circumstances exceed the maximum amount of interest permitted by such laws, and any excess, whether occasioned by acceleration or maturity of this Note or otherwise, shall be canceled automatically, and if theretofore paid, shall be either refunded to the Company or credited on the principal amount of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. <u>Severability</u>. Every provision of this Note is intended to be severable. In the event any term or provision hereof is declared by a court of competent jurisdiction, to be illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the balance of the terms and provisions hereof, which terms and provisions shall remain binding and enforceable.

**[SIGNATURE PAGE FOLLOWS]**

**IN WITNESS WHEREOF**, the Company has signed and sealed this Note and delivered it as of the date first set forth above.

---

| | |
|:---|:---|
| **COMPANY:** | **COMPANY:** |
| **ALTERNATIVE BALLISTICS CORPORATION** | **ALTERNATIVE BALLISTICS CORPORATION** |
| a Nevada corporation | a Nevada corporation |
| By: | Steven Luna |
| Its: | Chief Executive Officer |

---

---

| | |
|:---|:---|
| **ACKNOWLEDGED AND AGREED:** | **ACKNOWLEDGED AND AGREED:** |
| **LUNA CONSULTANT GROUP** | **LUNA CONSULTANT GROUP** |
| By: | Vanessa Luna |
| Its: | President |

---

**FORM OF ELECTION TO CONVERT**

The undersigned, the holder(s) of the attached Note, hereby irrevocably elects to exercise the right to convert $_____________ of the Note into shares of Common Stock of Alternative Ballistics Corporation and request that the certificates for such securities be issued in the name of, and delivered to,______________________________________________________.

Dated: SIGNATURE:

---

| |
|:---|
| (Signature must conform in all respects to name |
| of Noteholder as specified in the Note) |
| (Insert Social Security or Federal Tax I.D. |
| Number of Noteholder) |
| IF NOTE IS HELD JOINTLY, BOTH PARTIES MUST SIGN: |
| (Signature must conform in all respects to name |
| of Noteholder as specified in the Note) |
| (Insert Social Security or Federal Tax I.D. |
| Number of Joint Noteholder) |

---

**DISCLOSURE DOCUMENT**

Offering Circular on Form 1-A

of

Alternative Ballistics Corporation

dated June 10, 2024

https://www.sec.gov/Archives/edgar/data/1834868/000149315224023306/partiiandiii.htm

## Add

**Exhibit 6.25**

**ALTERNATIVE BALLISTICS CORPORATION, A NEVADA CORPORATION**

**BRIDGE LOAN OFFERING DOCUMENTS**

***January 29, 2026***

 ****

**Documents included in this package:**

&nbsp;&nbsp;&nbsp;&nbsp;**1.** **Instructions for Payment** 

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **Subscription Agreement** 

&nbsp;&nbsp;&nbsp;&nbsp;**3.** **Investor Representations and Warranties Agreement** 

&nbsp;&nbsp;&nbsp;&nbsp;**4.** **Convertible Note** 

&nbsp;&nbsp;&nbsp;&nbsp;**5.** **Warrant Agreement** 

&nbsp;&nbsp;&nbsp;&nbsp;**6.** **Disclosure Document** 

**INSTRUCTIONS FOR PAYMENT**

Review and complete the Bridge Loan Offering Documents and mail or deliver them, along with a check made payable to "Alternative Ballistics Corporation" in the amount of your investment to:

**Alternative Ballistics Corporation**

Attn: Steve Luna, Chief Executive Officer

5940 S. Rainbow Blvd.

Las Vegas, NV 89118

For any inquiries, please contact:

Steve Luna, Chief Executive Officer

Email: steve@alternativeballistics.com

Phone: 619-326-4411

We prefer you to send a wire transfer instead of a check. Please scan and email the signed Bridge Loan Offering Documents to the email address above and send the wire transfer using these instructions:

**Wiring Instructions:**

US Bank

Wire Transfer Department

P.O. Box 64830

St. Paul, MN 55164-0830

Phone: 800-872-2657

**Routing Number: 122235821**

For Further Credit to: Alternative Ballistics Corporation

**Account Number: 157523676557**

**<u>SUBSCRIPTION AGREEMENT</u>**

This SUBSCRIPTION AGREEMENT is made on January 29, 2026 by and between Alternative Ballistics Corporation, a Nevada corporation (the "Company") and <u>Minskoff Breede Management, LLC</u>, a <u>Limited Liability Company</u> individual/company type (the "Investor") (the Company and the Investor may be referred to individually as a "Party" or collectively as the "Parties") as of the date set forth on the signature page of this Agreement.

**RECITALS:**

**WHEREAS**, the Company is offering to the Purchaser a $50,000 convertible promissory note (the "Note"), convertible into shares of the Company's common stock at a conversion price of $1.00 per share, representing a 50% discount to the current Regulation A offering price, together with 100% warrant coverage (the "Warrant")

**WHEREAS,** the Investor desires to subscribe for the Note and Warrant (and together with the shares of common stock into which the Note is convertible, and the shares of common stock underlying the Warrant, referred to herein as the "Securities") for the purchase price of $50,000 (the "Purchase Price"); and

**WHEREAS,** this Subscription Agreement is part of a package of documents, including Instructions for Payment, Investor Representations and Warranties Agreement, the Note, Warrant, and Disclosure Document (hereinafter defined), all of which are incorporated herein by reference (the "Transaction Documents").

**NOW THEREFORE,** in consideration of the promises and respective mutual agreements herein contained, it is agreed by and between the Parties hereto as follows:

**ARTICLE I.**

**THE SECURITIES**

<u>Section 1.01. THE PURCHASE OF THE SECURITIES</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *Subscription*. The Investor is purchasing the Securities, on the terms set forth in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *Convertible Note*. The Note shall be in the form attached hereto, the terms of which are hereby incorporated herein as if such Note was fully set forth herein; provided, however, that in the event of any conflict between the express provisions of the Note and this Subscription Agreement, the provisions of the Note shall control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. Loan
 Amount. The Note shall be in the amount of $50,000. Investor shall pay for the Securities
 within **48hrs** of signing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. Maturity
 Date. The principal balance and all accrued and unpaid interest thereon shall be due and
 payable nine months from the date of the Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. Interest
 Rate. The Note shall bear an interest rate of 18% per annum.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv. Prepayment.
 In the event of a prepayment of the Loan prior to the Maturity Date, the Company shall pay
 120% of the Principal Balance plus any accrued and unpaid interest on the original Principal
 Balance of the Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;v. Conversion.
 The outstanding principal balance of this Note, together with all accrued and unpaid interest
 thereon (collectively, the "Conversion Amount"), may, at any time prior to the
 Maturity Date, be converted, at the option of the Company, into fully paid and non-assessable
 shares of the Company's common stock at the Conversion Price. For purposes hereof,
 the "Conversion Price" shall mean **$1.00 per share of common stock**, subject
 to adjustment as may be expressly provided elsewhere in this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *Warrant*. The Warrant shall be in the form attached hereto, the terms of which are hereby incorporated herein as if such Warrant were fully set forth herein; provided, however, that in the event of any conflict between the express provisions of the Warrant and this Subscription Agreement, the provisions of the Warrant shall control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. Exercise
 Price. The Warrant shall have an exercise price equal to $1.00

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. Term.
 The Warrant shall be exercisable for two years from the date of issuance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. Leak
 Out. During the Leak Out Period (defined below), the Investor's sale of common stock
 upon exercise of the Warrants shall be limited to 5% of the daily trading volume of the common
 stock on the immediately prior Trading Day. "Trading Day" shall mean a day on
 which Nasdaq or a similar U.S. nationally-recognized stock exchange is open for trading.
 "Leak Out Period" shall mean 12 months following the exercise of the warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv. Mandatory
 Exercise of Warrants. The Company shall have the right to require the Investor to exercise
 all or any portion of the Warrant that is still unexercised for a cash exercise when the
 closing price of the Company's common stock on Nasdaq or a similar U.S. nationally-recognized
 stock exchange equals or exceeds $5.00 for ten consecutive Trading Days. The Company shall
 deliver to the Investor a notice to exercise and any amount not exercised following such
 notice shall be immediately forfeited.

<u>Section 1.02. CLOSING</u>.

The purchase and sale of the Securities will take place at one closing (the "Closing") at a time and date as soon as practicable after all the conditions set forth in Articles III and IV hereof have been satisfied ("Closing Date"), and at such time and location as the Investor and the Company shall agree.

<u>Section 1.03. DELIVERY</u>.

At or prior to the Closing, the Investor shall deliver to the Company the Purchase Price for the Securities and all Transaction Documents signed by the Investor. At the Closing, the Company shall deliver to the Investor all Transaction Documents counter-signed by the Company.

<u>Section 1.04. LEGENDS; SECURITIES NOT REGISTERED UNDER THE SECURITIES ACT OF 1933</u>.

The Securities have not been registered under the Securities Act of 1933, as amended (the "Act"). Each of the certificates for the Securities shall bear substantially the following legend:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE.

The Offering is not a public offering and is intended to be made pursuant to exemptions from registration as set forth in Section 4(2) of the Act and Regulation D as promulgated by the Securities and Exchange Commission ("SEC") under the Act. This Offering is also intended to be exempt from the registration requirements of various state securities laws as may be applicable.

**ARTICLE II.**

**REPRESENTATIONS AND WARRANTIES**

<u>Section 2.01. INVESTOR REPRESENTATIONS AND WARRANTIES</u>.

The Investor makes each and every one of the representations and warranties set forth in the document entitled Investor Representations and Warranties Agreement attached hereto and incorporated herein by this reference as if such document were set forth herein in its entirety.

<u>Section 2.02. COMPANY REPRESENTATIONS AND WARRANTIES</u>.

The Company hereby represents, warrants, and covenants to the Investor as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company has been duly organized and validly existing as a corporation in good standing under the laws of the state of its incorporation. The Company is duly qualified or licensed and in good standing as a foreign corporation in each jurisdiction in which its ownership or leasing of any properties or the character of its operations requires such qualification or licensing and where failure to so qualify would have a material effect on the Company. The Company has all requisite corporate power and authority, and all material and necessary authorizations, approvals, orders, licenses, certificates, and permits of and from all governmental regulatory officials and bodies to own or lease its properties and conduct its businesses as described in the Company's Offering Circular on Form 1-A dated June 10, 2024 (hereinafter, the "Disclosure Document") and the Company is doing business in compliance with all such authorizations, approvals, orders, licenses, certificates, and permits and all federal, state, and local laws, rules, and regulations concerning the business in which it is engaged except where the failure so to do business in compliance would not have a material adverse effect on the business of the Company. The disclosures herein and in the Disclosure Document concerning the effects of federal, state, and local regulation on the Company's business as currently conducted and as contemplated are correct in all material respects and do not omit to state a material fact. The Company has all corporate power and authority to enter into the Transaction Documents and to carry out the provisions and conditions hereof and thereof, and all consents, authorizations, approvals, and orders required in connection herewith and therewith have been obtained or will have been obtained prior to the Closing Date. No consent, authorization, or order of, and no filing with any court, government agency, or other body is required for the issuance of the Securities pursuant to this Agreement except with respect to applicable federal and state securities laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) This Agreement and the Transaction Documents have been duly and validly authorized, executed, and delivered by the Company and are valid and binding agreements of the Company, enforceable in accordance with their respective terms, except to the extent that the enforceability hereof or thereof may be limited by (A) bankruptcy, insolvency, reorganization, moratorium, or similar laws from time to time in effect and affecting the rights of creditors generally; (B) limitations upon the power of a court to grant specific performance or any other equitable remedy; or (C) a finding by a court of competent jurisdiction that the indemnification provisions herein are in violation of public policy. The Securities have been duly authorized and are validly issued, fully paid, and non-assessable; all corporate action required to be taken for the authorization, issue, and sale of such securities has been duly and validly taken; and to the best knowledge of the Company, the Securities are not and will not be subject to the preemptive rights of any stockholder of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Company has good and marketable title to, or valid and enforceable leasehold estates in, all items of real and personal property owned or leased by it, free and clear of all liens, claims, encumbrances, security interests, and defects of any material nature whatsoever, except for Permitted Liens. "Permitted Liens" means liens, claims, encumbrances, security interests, and defects of any material nature whatsoever that are described in the Disclosure Document or otherwise disclosed to the Investor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) There is no litigation or governmental proceeding pending or threatened against or involving the properties or business of the Company which the Company believes would materially adversely affect the value or the operation of the properties or the business of the Company, except as set forth in the Disclosure Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) There has been no material adverse change in the condition or prospects for commercialization of the Company, financial or otherwise, as of the latest dates as of which such condition or prospects, respectively, are set forth in this Agreement and the Disclosure Document; and the outstanding debt, property, and the business of the Company conform in all material respects to the descriptions thereof contained herein and therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Securities shall conform in all respects to all statements in relation thereto contained herein or in the Disclosure Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Company is not in material violation of its Articles of Incorporation, or its Bylaws. Neither the execution and delivery of the Transaction Documents, nor the issuance of the Securities, nor the consummation of any of the transactions contemplated herein or in the Note or Warrant, nor the compliance by the Company with the terms and provisions contained herein, or in the Note or Warrant, has conflicted with or will conflict with, or has resulted in or will result in a breach of, any of the terms and provisions of, or has constituted or will constitute a default under, or has resulted in or will result in the creation or imposition of any lien, charge, or encumbrance upon any property or assets of the Company pursuant to the terms of any indenture, mortgage, deed of trust, note, loan or credit agreement, or any other agreement or instrument evidencing an obligation for borrowed money, or any other agreement or instrument to which the Company is subject; nor will such action result in any violation of the provisions of the Articles of Incorporation or the Bylaws of the Company, or any statute or any order, rule, or regulation applicable to the Company of any court or of any federal, state, or other regulatory authority or other government body having jurisdiction over the Company; except for any conflict, breach, default, lien, charge, or encumbrance which does not have a material and adverse effect on the Company, any of its business, property, or assets or any transactions contemplated hereby or by the Note or Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Subsequent to the dates as of which information is given in this Agreement or the Disclosure Document, and except as may otherwise be indicated or contemplated herein or therein, the Company has not entered into any transaction other than in the ordinary course of business or declared or paid any dividend or made any other distribution on or in respect of its capital stock. The Investor acknowledges that the Company may conduct financing activities in the future which would result in the issuance of securities of the Company to third parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Company owns or possesses, free and clear of all liens or encumbrances and rights thereto or therein by third parties, other than Permitted Liens, the requisite licenses or other rights to use all trademarks, service marks, copyrights, service names, trade names, patents, patents applications, and licenses necessary to conduct and material to their businesses (including, without limitation any such licenses or rights described herein as being owned or possessed by the Company), and there is no material claim or action by any person pertaining to, or proceeding, pending or threatened, which challenges the exclusive rights of the Company with respect to any trademarks, service marks, copyrights, service names, trade names, patents, patent applications, and licenses used in the conduct of the Company's business (including, without limitation, any such licenses or rights described herein or in the Disclosure Document as being owned or possessed by the Company); the Company's current products, services, and processes do not and will not infringe on any patents currently held by third parties, to the best knowledge of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Neither the Disclosure Document nor any of the documents contained in the Transaction Documents contain any untrue statement of a material fact or omits to state any material fact required to be stated herein or therein or necessary to make the statements herein or therein, considering the circumstances under which they were made, not misleading. All statements of material facts herein or therein (including, without limitation, any attachment, exhibit, or schedule hereto or thereto) are true and correct as of the date hereof and will be true and correct on the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) The Company shall use the proceeds from this Offering for costs and expenses of related to its initial public offering as well as for general working capital purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) Neither the Company, nor any of its respective officers, directors, employees, or agents, nor any other person acting on behalf of the Company has, directly or indirectly, given or agreed to give any money, gift, or similar benefit (other than legal price concessions to customers in the ordinary course of business) to any customer, supplier, employee, or agent of a customer or supplier, or official or employee of a customer or supplier, or official or employee of any governmental agency or instrumentality of any government (domestic or foreign) or any political party or candidate for office (domestic or foreign), or other person who is or may be in a position to help or hinder the business of the Company (or assist it in connection with any actual or proposed transaction) which (A) might subject the Company to any damage or penalty in any civil, criminal, or governmental litigation or proceeding; (B) if not given in the past, might have had a materially adverse effect on the assets, business, or operations of the Company as reflected in the financial statements delivered to the Investor, if any; or (C) if not continued in the future, might adversely affect the assets, business, operations, or prospects of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) The Company has not paid or promised to pay any form of compensation to any unlicensed finders, whether in the form of finder's fees, origination fees, referral fees, or otherwise, in connection with this Offering.

**ARTICLE III.**

**CONDITIONS TO THE INVESTOR'S OBLIGATIONS**

The obligation of the Investor to purchase the Securities at Closing is subject to the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The representations and warranties of the Company contained herein shall be true and correct in all material respects on and as of the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) There shall be no preliminary or permanent injunction or other order, decree, or ruling issued by a court of competent jurisdiction or by a governmental, regulatory, or administrative agency or commission, nor any statute, rule, regulation, or order promulgated or enacted by any governmental authority, prohibiting, or otherwise restraining the sale or purchase of the Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) On or prior to the Closing Date, the Investor shall have been furnished such documents, certificates, and opinions as they may reasonably require for the purpose of enabling them to review or pass upon the matters set forth herein, or in order to evidence the accuracy, completeness, or satisfaction of any of the representations, warranties, or conditions herein contained.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Prior to the Closing, (i) there shall have been no material adverse change nor development involving a prospective change in the condition, prospects, or the business activities, financial or otherwise, of the Company as a whole, from the latest dates as of which such condition is set forth in this Subscription Agreement and the Disclosure Document; (ii) there shall have been no transaction, not in the ordinary course of business, entered into by the Company from the latest date as of which the financial condition of the Company is set forth in this Subscription Agreement which is material to the Company and which has not been disclosed to the Investor in writing; (iii) the Company shall not be in default in any material respect under any provision of any instrument relating to any outstanding indebtedness; (iv) no material amount of the assets of the Company shall have been pledged or mortgaged; and (v) no action, suit, or proceeding, at law or in equity, shall have been pending or threatened against the Company or affecting any of its respective properties or businesses before or by any court of federal or state commission, board, or other administrative agency wherein an unfavorable decision, ruling, or finding could materially adversely affect the business, operations, prospects, or financial condition or income of the Company.

**ARTICLE IV.**

**CONDITIONS TO THE COMPANY'S OBLIGATIONS**

The obligation of the Company to sell the Securities under this Agreement at the Closing is subject to the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The representations and warranties of the Investor contained in the document entitled Investor Representations and Warranties Agreement attached hereto shall be true and correct in material respects on and as of the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) There shall be no preliminary or permanent injunction or other order, decree, or ruling issued by a court of competent jurisdiction or by a governmental, regulatory, or administrative agency or commission, nor any statute, rule, regulation, or order promulgated or enacted by any governmental authority, prohibiting, or otherwise restraining the sale or purchase of the Securities.

**ARTICLE V.**

**INDEMNIFICATION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company hereby agrees to defend, indemnify, and hold harmless the Investor, their stockholders, directors, partners, employees, agents, attorneys, and each person, if any, who controls such Investor within the meaning of the Act against any and all losses, claims, damages, or liabilities to which such Investor or any such stockholder, director, partner, employee, agent, attorney, or controlling person may become subject under the Act or otherwise, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained herein, in the Disclosure Document, or in any statement made to or in any filing with the Commission or to or with any state securities commission, bureau, or office (including any amendments thereto), or arise out of or based upon the omission or alleged omission to state herein or therein a material fact required to be stated herein or therein or necessary to make the statements herein or therein not misleading (unless such statements are made or omitted in reliance upon and in conformity with written information furnished to the Company with respect to such Investor by such Investor expressly for use herein or therein or any amendment hereof or supplement hereto), or any violation by the Company of the Act or state "blue sky" laws, or any breach by the Company of their obligations, representations, or warranties hereunder or with respect to the Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Investor hereby agrees to defend, indemnify, and hold harmless the Company and its respective stockholders, directors, employees, agents, and each person, if any, who controls any of the foregoing within the meaning of the Act against any and all losses, claims, damages, or liabilities to which the Company or any of the Company's stockholders, directors, employees, agents, or controlling persons may become subject under the Act or otherwise, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any written statement as it relates to the Offering, as made by the Investor, its stockholders, directors, partners, agents, or employees or any breach by such Investor of its obligations, representations, or warranties hereunder, provided that such statement or breach was made knowingly and intentionally.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Promptly after receipt by an indemnified party under either subparagraph (a) or (b), as the case may be, of the notice of commencement of any action covered by subparagraph (a) or (b), such indemnified party shall within five business days notify the indemnifying party of the commencement thereof; the omission by one indemnified party to so notify such indemnifying party shall not relieve the indemnifying party of its obligations hereunder except to the extent such indemnifying party has been materially prejudiced by such omission, shall not relieve the indemnifying party of its obligation to indemnify any other indemnified party that has given such notice and shall not relieve the indemnifying party of any liability outside of this indemnification. If any action is brought against the indemnified party, it shall notify the indemnifying party in a timely manner, the indemnifying party will be entitled to participate in such action and, to the extent it may desire, to assume and control the defense thereof with counsel chosen by it. After notice from the indemnifying party to such indemnified party of its election to so assume the defense thereof, the indemnifying party will not be liable to such indemnified party under such subparagraph for any legal or other expense subsequently incurred by such indemnified party in connection with the defense thereof, but the indemnified party may, at its own expenses, participate in such defense by counsel chosen by it without, however, impairing the indemnifying party's control of the defense. Notwithstanding anything to the contrary contained herein, the indemnified party shall have the right to choose its own counsel and control the defense of any action, all at the reasonable expense of the indemnifying party, if (i) the employment of such counsel shall have been authorized in writing by the indemnifying party in connection with the defense of such action at the expense of the indemnifying party; (ii) the indemnifying party shall not have employed counsel reasonably satisfactory to such indemnified party to have charge of the defense of such action within a reasonable time after notice of commencement of the action; or (iii) such indemnified party shall have reasonably concluded that there may be defenses available to such indemnified party that differ from the defenses available to the indemnifying party (in which case the indemnifying party shall not have the right to direct the defense of such action on behalf of such indemnified party), in any of which events such reasonable fees and expenses of one additional counsel (for all indemnified parties) shall be borne by the indemnifying party (in the case of the Investor, one additional counsel for Investor). No settlement of any action or proceeding against an indemnified party shall be made without the consent of the indemnified party, which consent shall not be unreasonably withheld.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) In order to provide for just and equitable contribution under the Act in any case in which (i) any indemnified party makes a claim for indemnification pursuant to this paragraph but it is judicially determined (by entry of a final judgment or decree by a court of competent jurisdiction and the expiration of the time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case, notwithstanding the fact the this paragraph provides for indemnification in such case, or (ii) contribution under the Act is required on the part of any such person in circumstances for which indemnification is provided under this paragraph, then, in each such case, the Company shall be solely responsible for all aggregate losses, claims, damages, or liabilities, and the Investor shall not be required to contribute to these losses beyond the amount of the Securities purchased by such Investor pursuant to the Subscription Agreement; provided, that in any such case, no person guilty of a fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

**ARTICLE VI.**

**NOTICES**

Any notice, request, instruction, or other document required by the terms of this Agreement, or deemed by any of the Parties hereto to be desirable, to be given to any other Party hereto shall be in writing and shall be given by personal delivery, overnight delivery, mailed by registered or certified mail, postage prepaid, with return receipt requested, or sent by electronic mail (with receipt confirmed) to the addresses of the Parties as follows:

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| | |
|:---|:---|
| Company: | Alternative Ballistics Corporation |
|  | 5940 S. Rainbow Blvd. |
|  | Las Vegas, NV 89118 |
|  | Email: steve@alternativeballistics.com |
|  | Attn: Steven Luna, CEO |
| Investor: | At the address below Investor's signature on this Agreement |

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The persons and addresses set forth above may be changed from time to time by a notice sent as aforesaid. If notice is given by personal delivery or overnight delivery in accordance with the provisions of this Section, such notice shall be conclusively deemed given at the time of such delivery provided a receipt is obtained from the recipient. If notice is given by mail in accordance with the provisions of this Article, such notice shall be conclusively deemed given upon receipt and delivery or refusal. If notice is given by electronic mail transmission in accordance with the provisions of this Article, such notice shall be conclusively deemed given at the time of delivery if during business hours and if not during business hours, at the next business day after delivery, provided a confirmation is obtained by the sender.

**ARTICLE VII.**

**MISCELLANEOUS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of California applicable to contracts made and to be performed entirely therein, without giving effect to the rules of conflicts of law. The Parties agree that the courts of the County of Orange, State of California shall have sole and exclusive jurisdiction and venue for the resolution of all disputes arising under the terms of this Agreement and the transactions contemplated herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) This Agreement represents the entire agreement between the Parties relating to the subject matter hereof, superseding any and all prior to contemporaneous oral and prior written agreements and understandings. This Agreement may not be modified or amended, nor may any right be waived except by a writing signed by the party against whom the modification or waiver is sought to be enforced.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The warranties, representations, and covenants of the Company and the Investor contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The captions and headings contained herein are solely for convenience of reference and do not constitute a part of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Each of the Transaction Documents is hereby incorporated herein as if each of such attachments were fully set forth herein in its entirety. Each of such attachments is hereby expressly made a part of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The Parties agree that this Agreement may be executed by facsimile signatures and such signatures shall be deemed originals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) All Parties to this Agreement have been given the opportunity to consult with counsel of their choice regarding their rights under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The term "days," as used in this Agreement and in all documents contained in the Transaction Documents, refers to calendar days unless otherwise clearly indicated.

**[SIGNATURE PAGE FOLLOWS]**

**IN WITNESS WHEREOF**, intending to be legally bound, the Parties hereto have executed this Agreement as of the July 22, 2025.

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| | |
|:---|:---|
| **COMPANY:** | **COMPANY:** |
| **Alternative Ballistics Corporation,** | **Alternative Ballistics Corporation,** |
| a Nevada corporation | a Nevada corporation |
| */s/ Steven Luna* | */s/ Steven Luna* |
| By: | Steven Luna |
| Its: | Chief Executive Officer |

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**PURCHASER:**

**<u>Minskoff Breede Management LLC</u>** (Investor Name)

**<u>Limited Liability Company</u>** (Investor Type "individual or company")

A. Has the limited liability company been formed for the specific purpose of investing in the Units?

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| | | | |
|:---|:---|:---|:---|
| ☐ | YES | ☐ | NO |

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If your answer to question A is "No" CHECK whichever of the following statements (1-5) is applicable to you. If your answer to question A is "Yes" the Purchaser must be able to certify to statement (B) below in order to qualify as an "accredited investor."

The undersigned entity certifies that it is an "accredited investor" because it is:

1. _______ an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974, provided that the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, and the plan fiduciary is a bank, savings and loan association, insurance company or registered investment adviser; or

2. _______ an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974 that has total assets in excess of $5,000,000; or

3. _______ each of its shareholders, partners, or beneficiaries meets at least one of the following conditions described above under Individual Accredited Investor Status. Please also CHECK the appropriate space in that section below; or

4. _______ the plan is a self directed employee benefit plan and the investment decision is made solely by a person that meets at least one of the conditions described above under Individual Accredited Investor Status; or

5. _______ an entity with total assets in excess of $5,000,000.

B. If the answer to Question A above is "Yes," please certify the statement below is true and correct:

_______ The undersigned entity certifies that it is an accredited investor because each of its members meets at least one of the following conditions described below under Individual Accredited Investor Status. Please also CHECK the appropriate space in that section.

**ONLY COMPLETE THE FOLLOWING IF YOU CHECKED A.3. OR B:, AND THEN PLEASE COMPLETE THE FOLLOWING FOR *EVERY* MEMBER OF THE LIMITED LIABILITY COMPANY:**

&nbsp;&nbsp;&nbsp;&nbsp;1. Member Name: <u>Michael Edward Breede</u> 

I certify that I am an individual **"accredited investor"** because:

_____X__ I had an individual income of more than $200,000 in each of the two most recent calendar years, and I reasonably expect to have an individual income in excess of $200,000 in the current calendar year; or my spouse and I had joint income in excess of $300,000 in each of the two most recent calendar years, and we reasonably expect to have a joint income in excess of $300,000 in the current calendar year.

**OR**

_______ I have an individual net worth, or my spouse and I have a joint net worth, in excess of $1,000,000 (excluding my (our) primary residence).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Member Name:

I certify that I am an individual "accredited investor" because:

_______ I had an individual income of more than $200,000 in each of the two most recent calendar years, and I reasonably expect to have an individual income in excess of $200,000 in the current calendar year; or my spouse and I had joint income in excess of $300,000 in each of the two most recent calendar years, and we reasonably expect to have a joint income in excess of $300,000 in the current calendar year.

**OR**

_______ I have an individual net worth, or my spouse and I have a joint net worth, in excess of $1,000,000 (excluding my (our) primary residence).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Member Name:

I certify that I am an individual "accredited investor" because:

_______ I had an individual income of more than $200,000 in each of the two most recent calendar years, and I reasonably expect to have an individual income in excess of $200,000 in the current calendar year; or my spouse and I had joint income in excess of $300,000 in each of the two most recent calendar years, and we reasonably expect to have a joint income in excess of $300,000 in the current calendar year.

**OR**

_______ I have an individual net worth, or my spouse and I have a joint net worth, in excess of $1,000,000 (excluding my (our) primary residence).

[If there are additional members of the LLC, please duplicate this page.]

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| | |
|:---|:---|
| **Investor:** | **Minskoff Breede Management LLC** |
| Print Name: | Michael Edward Breede |
| Its: | Member |

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| |
|:---|
| [Signature] |
| Address |
| Address |
| Email Address |
| Social Security/Tax I.D. Number |

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**INVESTOR REPRESENTATIONS AND WARRANTIES AGREEMENT**

This INVESTOR REPRESENTATIONS AND WARRANTIES AGREEMENT ("Agreement"), dated as of the date set forth on the signature page of this Agreement, is by and between Alternative Ballistics Corporation, a Nevada corporation (the "Company") and the purchaser set forth on the signature page of this Agreement, or assigns (the "Investor") (the Company and the Investor may be referred to individually as a "Party" and, collectively, as the "Parties").

**RECITALS:**

This Agreement is being made pursuant to an Offering by the Company of the purchase of a Convertible Note (the "Note") and warrants to purchase shares of common stock (the "Warrant" and collectively with the Note, the shares of common stock into which the Note is convertible, and the shares of common stock underlying the Warrant, the "Securities"). The Securities are being issued on the Closing (as defined in the Subscription Agreement) pursuant to a Subscription Agreement of even date herewith between the Company and the Investor which contains representations and warranties and additional covenants of the Company with respect to the sale of the Securities. Capitalized terms not otherwise defined herein shall have the meaning set forth in the Subscription Agreement. THE PROVISIONS OF THE SUBSCRIPTION AGREEMENT ARE INCORPORATED HEREIN BY REFERENCE.

**ARTICLE 1.**

**REPRESENTATIONS AND WARRANTIES OF THE INVESTOR**

The Investor hereby represents and warrants that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Investor acknowledges that the Securities are "restricted securities" (as such term is defined in Rule 144 promulgated under the Securities Act of 1933, as amended ("Rule 144"), that the Securities will include the restrictive legend set forth in Section 1.04 of the Subscription Agreement, and, except as otherwise set forth in the Subscription Agreement, that the Securities cannot be sold unless registered with the United States Securities and Exchange Commission ("SEC") and qualified by appropriate state securities regulators, or unless Investor otherwise complies with an exemption from such registration and qualification (including, without limitation, compliance with Rule 144).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Investor has adequate means of providing for current needs and contingencies, has no need for liquidity in the investment, and is able to bear the economic risk of an investment in the Securities. Investor represents that Investor is able to bear the economic risk of the investment and at the present time could afford a complete loss of such investment. Investor has reviewed the Transaction Documents with care. Additionally, Investor has had a full opportunity to inspect the Disclosure Document and to make any and all inquiries of Company officers and directors regarding the Company and its business as Investor has deemed appropriate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Investor is an "Accredited Investor" as defined in Regulation D of the Act. Investor, either alone or with Investor's professional advisers who are unaffiliated with, have no equity interest in, and are not compensated by the Company or any affiliate or selling agent of the Company, directly or indirectly, has sufficient knowledge and experience in financial and business matters that Investor is capable of evaluating the merits and risks of an investment in the Securities offered by the Company and of making an informed investment decision with respect thereto and has the capacity to protect Investor's own interests in connection with Investor's proposed investment in the Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Investor is acquiring the Securities solely for Investor's own account as principal, for investment purposes only and not with a view to the resale or distribution thereof, in whole or in part, and no other person or entity has a direct or indirect beneficial interest in such Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Investor will not sell or otherwise transfer the Securities without registration under the Act or an exemption therefrom and fully understands and agrees that Investor must bear the economic risk of Investor's purchase for an indefinite period of time because, among other reasons, the Securities have not been registered under the Act or under the securities laws of any state and, therefore, cannot be resold, pledged, assigned, or otherwise disposed of unless they are subsequently registered under the Act and under the applicable securities laws of such states or unless an exemption from such registration is available.

**ARTICLE 2.**

**MISCELLANEOUS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of California applicable to contracts made and to be performed entirely therein, without giving effect to the rules of conflicts of law. The Parties agree that the courts of the County of Orange, State of California shall have sole and exclusive jurisdiction and venue for the resolution of all disputes arising under the terms of this Agreement and the transactions contemplated herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The warranties and representations of the Investor contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The Parties agree that this Agreement may be executed by facsimile signatures and such signatures shall be deemed originals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) All Parties to this Agreement have been given the opportunity to consult with counsel of their choice regarding their rights under this Agreement.

**IN WITNESS WHEREOF**, intending to be legally bound, the Parties hereto have executed this Agreement as of July 22, 2025.

---

| | |
|:---|:---|
| **COMPANY:** | **COMPANY:** |
| **Alternative Ballistics Corporation,** | **Alternative Ballistics Corporation,** |
| a Nevada corporation | a Nevada corporation |
| By: | Steven Luna |
| Its: | Chief Executive Officer |

---

---

| | |
|:---|:---|
| **INVESTOR:** | **INVESTOR:** |
| **<u>Minskoff Breede Management LLC</u>** | **<u>Minskoff Breede Management LLC</u>** |
| By: | Michael Edward Breede |
| Its: | Member |

---

**THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE OFFERED, SOLD TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE.**

**ALTERNATIVE BALLISTICS CORPORATION, A NEVADA CORPORATION**

**CONVERTIBLE NOTE**

This Convertible Note (this "Note") has been issued pursuant to a Subscription Agreement dated February 2, 2026 (the "Subscription Agreement") between the Company and the holder of this Note (the "Noteholder"). Capitalized terms not otherwise defined herein shall have the meaning set forth in the Subscription Agreement, the provisions of which are incorporated herein by reference.

---

| | |
|:---|:---|
| **$50000** | **Date: January 29, 2026** |

---

1. <u>The Obligation</u>. FOR VALUE RECEIVED, the undersigned, Alternative Ballistics Corporation, a Nevada corporation (the "Company"), hereby promises to pay to the order of <u>Minskoff Breede Management LLC</u> a <u>Limited Liability Company</u> individual/company, or its assigns (collectively, the "Noteholder"), in lawful money of the United States of America, and in immediately payable funds, the principal sum of $50,000 (the "Obligation"). The principal amount loaned by Noteholder to the Company shall accrue interest thereon from the date of this Note. Interest shall be paid according to Section 2 below and all amounts due under this Note shall be paid upon the Maturity Date set forth in Section 3 below. The Company has the right to assign this Note upon written notice to the Noteholder. (The Noteholder and the Company may be referred to individually as a "Party" and collectively as the "Parties" in this Note.)

2. <u>Interest</u>. The principal amount of this Note that may be outstanding from time to time shall bear interest at a rate equal to 18% per annum. Interest, if any, shall be computed hereunder based on a 365-day year and paid for the actual number of days elapsed for any whole or partial month in which principal is outstanding, which interest shall then be due and payable on the Maturity Date.

3. <u>Payment Terms</u>. The principal and interest of this Note shall be due and payable to the Noteholder nine months from the date of this Note (the "Maturity Date") unless all principal and interest due under this Note have been prepaid pursuant to Section 4 herein or converted pursuant to Section 5 herein. Payments are to be made to the Noteholder at its address stated in the Subscription Agreement (or such other address as is designated by the Noteholder) in lawful money of the United States of America. Unless otherwise specified, payments received by the Noteholder pursuant to the terms hereof shall be applied, first, to the payment of all expenses, charges, late payment fees, costs, and fees incurred by or payable to the Noteholder and for which the Company is obligated pursuant to the terms of this Note; second, to the payment of interest; and third, to the payment of principal.

4. <u>Prepayment</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1. <u>Prepayment</u>. The Company shall have the right to prepay all or any portion of the Loan outstanding at any time; provided, however, in the event of a prepayment, the Company shall pay 120% of the Principal Balance plus accrued and unpaid interest on the original Principal Balance of the Note. The Company shall deliver a notice of prepayment to Noteholder, which notice shall specify a prepayment date not less than 15 nor more than 30 days from the date of such notice (the "Prepayment Date"); provided, however, that the Investor will continue to have the right to convert the Note until the close of business of the fifth business day prior to the Prepayment Date.

5. <u>Conversion</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 <u>Conversion Price</u>. The outstanding principal balance of this Note, together with all accrued and unpaid interest thereon (collectively, the "Conversion Amount"), may, at any time prior to the Maturity Date, be converted, at the option of the Company, into fully paid and non-assessable shares of the Company's common stock at the Conversion Price. For purposes hereof, the "Conversion Price" shall mean **$1.00 per share of common stock**, subject to adjustment as may be expressly provided elsewhere in this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 <u>Voluntary Conversion</u>. This Note is convertible at the option of the Noteholder, in Noteholder's sole discretion, in whole or in part, at any time prior to the Maturity Date or payment in full of the Note, whichever occurs first, for all or any portion of principal or interest, into shares of Common Stock of the Company at the Conversion Price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 <u>Mechanics of Conversion</u>. To effectuate a Voluntary Conversion, the Noteholder shall deliver to the Company a written Election to Convert, a form of which is attached hereto. Immediately upon receipt of the written Election to Convert, the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Noteholder, and in such name or names as the Noteholder may designate, a certificate or other documentary evidence for the full number of shares of common stock ("Common Shares") so purchased upon conversion of the Note. Such certificate or documentary evidence shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of such securities as of the date of delivery of the Election to Convert, notwithstanding that the certificate or documentary evidence representing such securities shall not actually have been delivered or that the stock transfer books of the Company shall then be closed. The Note shall be convertible, at the election of the Noteholder, either in full or from time to time in part and, in the event that the Note is converted in respect of less than all of the Common Shares specified therein at any time prior to the Maturity Date, a new Note evidencing the remaining portion of the indebtedness shall be issued by the Company to the Noteholder.

6. <u>Representations, Warranties, and Covenants of the Company</u>. In connection with the transactions provided for herein, the Company hereby represents, warrants, and covenants to Noteholder that, as of the date hereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 <u>Organization, Good Standing, and Qualification</u>. The Company is a corporation duly organized and validly existing under the laws of the State of Nevada and has all requisite corporate power and authority to carry on its business as now conducted. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on its business or properties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 <u>Authorization</u>. All corporate action has been taken on the part of the Company, its officers, and directors necessary for the authorization, execution, and delivery of this Note. Except as may be limited by applicable bankruptcy, insolvency, reorganization, or similar laws relating to or affecting the enforcement of creditors' rights, the Company has taken all corporate action required to make all of the obligations of the Company reflected in the provisions of this Note the valid and enforceable obligations they purport to be.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 <u>Compliance with Other Instruments</u>. The Company is not in violation of or in default under its Articles of Incorporation, as amended to date, or in any material respect of any term or provision of any loan, promissory note, mortgage, indebtedness, indenture, contract, agreement, instrument, judgment, order, or decree to which it is party or by which it is bound. The Company is not in violation of any federal or state statute, rule, or regulation applicable to the Company. The execution and delivery of this Note by the Company, the performance by the Company of its obligations pursuant to this Notes, and the issuance of the Common Shares, will not result in any violation of, or conflict with, or constitute a default under, the Company's Articles of Incorporation, as amended to date, or of any of its agreements material to the Company or its business, nor result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4 <u>Valid Issuance of Common Shares</u>. The Common Shares to be issued, sold, and delivered upon conversion of the Notes will be duly and validly issued, fully paid, and non-assessable and, based in part upon the representations and warranties of the Company in this Note, will be issued in compliance with all applicable federal and state securities laws.

7. <u>Representations and Warranties of Noteholder</u>. In connection with the transactions provided for herein, Noteholder hereby represents and warrants to the Company that, as of the date a Note is issued to such Noteholder:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 <u>Authorization</u>. This Note constitutes such Noteholder's valid and legally binding obligation, enforceable in accordance with its terms, except as may be limited by (a) applicable bankruptcy, insolvency, reorganization, or similar laws relating to or affecting the enforcement of creditors' rights and (b) laws relating to the availability of specific performance, injunctive relief, or other equitable remedies. Such Noteholder represents that it has full power and authority to enter into this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 <u>Purchase Entirely for Own Account</u>. Such Noteholder acknowledges that this Note is made with such Noteholder in reliance upon such Noteholder's representation to the Company that this Note and the Common Shares (collectively, the "Securities") will be acquired for investment for such Noteholder's own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that such Noteholder has no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Note, such Noteholder further represents that such Noteholder does not have any contract, undertaking, agreement, or arrangement with any person to sell, transfer, or grant participations to such person or to any third person with respect to the Securities. Notwithstanding the foregoing, such Noteholder shall have the right to transfer the Securities, all or in part, to any affiliate of Noteholder. Any such transferees shall execute and deliver appropriate documentation providing that the transferee agrees to be bound by the applicable provisions hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 <u>Disclosure of Information</u>. Such Noteholder acknowledges that they have received all the information they consider necessary or appropriate for deciding whether to acquire the Securities. Such Noteholder further represents that they have had an opportunity to ask questions and receive answers from the Company regarding the Company and this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4 <u>Investment Experience</u>. Such Noteholder is an investor in securities of companies in the development stage and acknowledges that they able to fend for themselves; can bear the economic risk of this investment; and has such knowledge and experience in financial or business matters that he, she, or it is capable of evaluating the merits and risks of an investment in the Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5 <u>Restricted Securities</u>. Noteholder understands that the Securities are characterized as "restricted securities" under the federal securities laws since they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the Securities Act, only in certain limited circumstances. Such Noteholder represents that it is familiar with SEC Rule 144, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.6 <u>Legends</u>. It is understood that the Securities may bear the following legend:

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE."

8. <u>Default</u>. The occurrence of any one of the following events shall constitute an Event of Default:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The non-payment, when due, of any principal or interest pursuant to this Note, regardless of whether the Company has received notice of such non-payment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The material breach of any representation or warranty in this Note. In the event the Noteholder becomes aware of a breach of this Section, the Noteholder shall notify the Company in writing of such breach and the Company shall have ten days' notice to effect a cure of such breach;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The material breach of any covenant or undertaking in this Note, not otherwise provided for in this Section. In the event the Noteholder becomes aware of a breach of this Section, the Noteholder shall notify the Company in writing of such breach and the Company shall have ten days' notice to effect a cure of such breach;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) A default shall occur in the payment when due (subject to any applicable grace period), whether by acceleration or otherwise, of any indebtedness of the Company or an event of default or similar event shall occur with respect to such indebtedness, if the effect of such default or event (subject to any required notice and any applicable grace period) would be to accelerate the maturity of any such indebtedness or to permit the holder or holders of such indebtedness to cause such indebtedness to become due and payable prior to its express maturity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The commencement by the Company of any voluntary proceeding under any bankruptcy, reorganization, arrangement, insolvency, readjustment or debt, receivership, dissolution, or liquidation law or statute or any jurisdiction, whether now or hereafter in effect; or the adjudication of the Company as insolvent or bankrupt by a decree of a court of competent jurisdiction; or the petition or application by the Company for, acquiescence in, or consent by the Company to, the appointment of any receiver or trustee for the Company or for all or a substantial part of the property of the Company; or the assignment by the Company for the benefit of creditors; or the written admission of the Company of its inability to pay its debts as they mature; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The commencement against the Company of any proceeding relating to the Company under any bankruptcy, reorganization, arrangement, insolvency, adjustment of debt, receivership, dissolution or liquidation law or statute or any jurisdiction, whether now or hereafter in effect, provided, however, that the commencement of such a proceeding shall not constitute an Event of Default unless the Company consents to the same or admits in writing the material allegations of same, or said proceeding shall remain undismissed for 30 days; or the issuance of any order, judgment, or decree for the appointment of a receiver or trustee for the Company or for all or a substantial part of the property of the Company, which order, judgment, or decree remains undismissed for 30 days; or a warrant of attachment, execution, or similar process shall be issued against any substantial part of the property of the Company.

Upon the occurrence of any Event of Default, the Noteholder may, by written notice to the Company, declare all or any portion of the unpaid principal amount due to Noteholder, together with all accrued interest thereon, immediately due and payable. The Noteholder may also proceed against any guarantor of this obligation without waiving any rights under the terms of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Notice</u>. Any notice, request, instruction, or other document required by the terms of this Note, or deemed by any of the Parties hereto to be desirable, to be given to any other Party hereto shall be in writing and shall be given by personal delivery, overnight delivery, mailed by registered or certified mail, postage prepaid, with return receipt requested, or sent by electronic transmission to the addresses of the Parties set forth in the Subscription Agreement. The persons and addresses set forth in the Notice provision of the Subscription Agreement may be changed from time to time by a notice sent as aforesaid. If notice is given by mail in accordance with the provisions of this Section, such notice shall be conclusively deemed given upon receipt and delivery or refusal. If notice is given by electronic mail transmission in accordance with the provisions of this Section, such notice shall be conclusively deemed given at the time of delivery if between the hours of 9:00 a.m. and 5:00 p.m. Pacific time on a business day ("business hours") and if not during business hours, at 9:00 a.m. on the next business day following delivery, provided a delivery confirmation is obtained by the sender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>Choice of Law</u>. This Note and the rights of the Parties hereunder shall be governed by and construed in accordance with the laws of the State of California including all matters of construction, validity, performance, and enforcement and without giving effect to the principles of conflict of laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>Exclusive Jurisdiction and Venue</u>. The Parties agree that the state and federal courts in the County of Orange, State of California shall have sole and exclusive jurisdiction and venue for the resolution of all disputes arising under the terms of this Note and the transactions contemplated herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u>Attorneys' Fees</u>. In the event the Noteholder or any assignee thereof shall refer this Note to an attorney for collection, the Company agrees to pay all the costs and expenses incurred in attempting or effecting collection hereunder, including reasonable attorney's fees, whether or not suit is instituted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. <u>Conformity with Law</u>. It is the intention of the Company and of the Noteholder to conform strictly to applicable usury and similar laws. Accordingly, notwithstanding anything to the contrary in this Note, it is agreed that the aggregate of all charges which constitute interest under applicable usury and similar laws that are contract for, chargeable or receivable under or in respect of this Note, shall under no circumstances exceed the maximum amount of interest permitted by such laws, and any excess, whether occasioned by acceleration or maturity of this Note or otherwise, shall be canceled automatically, and if theretofore paid, shall be either refunded to the Company or credited on the principal amount of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. <u>Severability</u>. Every provision of this Note is intended to be severable. In the event any term or provision hereof is declared by a court of competent jurisdiction, to be illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the balance of the terms and provisions hereof, which terms and provisions shall remain binding and enforceable.

**[SIGNATURE PAGE FOLLOWS]**

**IN WITNESS WHEREOF**, the Company has signed and sealed this Note and delivered it as of the date first set forth above.

---

| | |
|:---|:---|
| **COMPANY:** | **COMPANY:** |
| **ALTERNATIVE BALLISTICS CORPORATION** | **ALTERNATIVE BALLISTICS CORPORATION** |
| a Nevada corporation | a Nevada corporation |
| */s/ Steven Luna* | */s/ Steven Luna* |
| By: | Steven Luna |
| Its: | Chief Executive Officer |

---

---

| | |
|:---|:---|
| **ACKNOWLEDGED AND AGREED:** | **ACKNOWLEDGED AND AGREED:** |
| */s/ Michael Edward Breed* | */s/ Michael Edward Breed* |
| Print Name: Michael Edward Breed | Print Name: Michael Edward Breed |
| Its: | Member |

---

**FORM OF ELECTION TO CONVERT**

The undersigned, the holder(s) of the attached Note, hereby irrevocably elects to exercise the right to convert $_____________ of the Note into shares of Common Stock of Alternative Ballistics Corporation and request that the certificates for such securities be issued in the name of, and delivered to, __________________________________________________.

---

| | |
|:---|:---|
| Dated: | 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> (Signature must conform in all respects to name |
|  | of Noteholder as specified in the Note) |
|  | (Insert Social Security or Federal Tax I.D. |
|  | Number of Noteholder) |
|  | IF NOTE IS HELD JOINTLY, BOTH PARTIES MUST SIGN: |
|  | (Signature must conform in all respects to name |
|  | of Noteholder as specified in the Note) |
|  | (Insert Social Security or Federal Tax I.D. |
|  | Number of Joint Noteholder) |

---

**THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE.**

This Warrant Agreement (this "Warrant") has been issued pursuant to a Subscription Agreement dated February 2, 2026 (the "Subscription Agreement") between the Company and the holder of this Warrant (the "Holder"). Capitalized terms not otherwise defined herein shall have the meaning set forth in the Subscription Agreement, the provisions of which are incorporated herein by reference.

**ALTERNATIVE BALLISTICS CORPORATION**

**a Nevada Corporation**

**WARRANT AGREEMENT**

**To Purchase Shares of Common Stock**

Issue Date: January 29, 2026

THIS CERTIFIES that, for value received, <u>Minskoff Breede Management LLC</u> , a <u>Limited Liability Company</u> individual/company, or its assigns (the "Holder"), is entitled, upon the terms and subject to the conditions hereinafter set forth, at any time on or after the date hereof, to subscribe for and purchase from, ALTERNATIVE BALLISTICS CORPORATION, a Nevada corporation (the "Company"), certain fully paid, non-assessable shares of the Company's common stock, par value $0.001 ("Common Stock") set forth in Section 1 below at the Exercise Price (defined below), provided that such right will terminate, if not terminated earlier in accordance with the provisions hereof, at 5:00 p.m. (Pacific time) on the five year anniversary of the Issue Date (the "Expiration Date"). The purchase price and the number of shares for which this warrant (each a "Warrant," and collectively, the "Warrants") is exercisable are subject to adjustment, as provided herein.

As used herein the following terms, unless the context otherwise requires, have the following respective meanings:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The term "Company" shall include Alternative Ballistics Corporation and any entity which shall succeed or assume the obligations of Alternative Ballistics Corporation hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The term "Warrant Shares" includes (i) the Company's common stock and (ii) any other securities into which or for which any of the Common Stock may be converted or exchanged pursuant to a plan of recapitalization, reorganization, merger, sale of assets or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The term "Other Securities" refers to any stock (other than Common Stock) and other securities of the Company or any other person (corporate or otherwise) which the holder of the Warrant at any time shall be entitled to receive, or shall have received, on the exercise of the Warrant, in lieu of or in addition to Common Stock, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The term "Exercise Price" shall be $1.00 one dollar.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The "Note" refers to that certain Promissory Note dated on even date herewith issued to the Holder pursuant to the above-referenced Subscription Agreement.

1. <u>Number of Shares Issuable upon Exercise</u>.

Unless sooner terminated in accordance herewith, from and after the date hereof through and including the Expiration Date, the Holder shall be entitled to receive up to fifty thousand (50,000) Warrant Shares, upon exercise of this Warrant in whole or in part, by delivery of an original or fax copy of the exercise notice attached hereto as A<u>nnex A</u> (the "Notice of Exercise") along with payment to the Company of the Exercise Price.

2. <u>Exercise of Warrant</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The purchase rights represented by this Warrant are exercisable by the registered Holder hereof, in whole at any time or in part from time to time by delivery of the Notice of Exercise duly completed and delivered to the office of the Company, and upon payment of the Exercise Price of the shares thereby purchased (in the manner provided in Section 2(d) hereof); whereupon the Holder of this Warrant shall be entitled to receive a certificate for the number of Warrant Shares so purchased; provided that the Company will place on each certificate a legend substantially the same as that appearing on this Warrant, in addition to any legend required by any applicable state or federal law. If this Warrant is exercised in part, the Company will issue to the Holder hereof a new Warrant upon the same terms as this Warrant but for the balance of Warrant Shares for which this Warrant remains exercisable. The Company agrees that upon exercise of this Warrant the Holder shall be deemed to be the record owner of the Warrant Shares issued upon exercise as of the close of business on the date on which this Warrant shall have been exercised as aforesaid. This Warrant will be surrendered at the time of exercise or if lost, stolen, misplaced, or destroyed, the Holder will comply with Section 11 below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Certificates for Warrant Shares purchased hereunder shall be delivered to the Holder hereof within a reasonable time after the date on which this Warrant shall have been exercised as aforesaid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Company covenants that all Warrant Shares which may be issued upon the exercise of rights represented by this Warrant will, upon exercise of the rights represented by this Warrant, be fully paid and nonassessable and free from all preemptive rights, taxes, liens, and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue which shall be paid by the Company in accordance with Section 6 below).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) In order to exercise this Warrant with respect to all or any part of the Warrant Shares for which this Warrant is at the time exercisable, Holder (or any other person or persons exercising the Warrant) must take the following actions:

&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) Execute and deliver to the Company a written notice of exercise stating the number of Warrant Shares being purchased (in whole shares only) and such other information set forth on the form of Notice of Exercise attached hereto as Annex A; 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) Pay the aggregate Exercise Price for the Warrant Shares by cash, wire transfer, or check made payable to the order of the Company.

3. <u>Leak Out</u>.

During the Leak Out Period (defined below), the Holder's sale of common stock upon exercise of the Warrants shall be limited to 5% of the daily trading volume of the common stock on the immediately prior Trading Day. "Trading Day" shall mean a day on which Nasdaq or a similar U.S. nationally-recognized stock exchange is open for trading. "Leak Out Period" shall mean 12 months following the exercise of warrants.

4. <u>Mandatory Exercise of Warrants</u>.

At such time, if ever, that the Common Stock is listed on a national securities exchange or quoted in an over-the-counter market, the closing price of the Common Stock equals or exceeds $5.00 per share (which amount may be adjusted for certain capital events, such as stock splits) for ten consecutive trading days (the "Closing Price Measuring Period"), then the Company shall have the right to require the Holder to exercise all or any portion of this Warrant still unexercised, into fully paid, validly issued, and nonassessable shares of Common Stock at the Exercise Price. The Company may exercise its right to require exercise under this Section 4 by delivering within not more than five trading days following the end of such Closing Price Measuring Period a written notice thereof by electronic mail to the Holder (the "Mandatory Exercise Notice"). The Mandatory Exercise Notice shall be irrevocable. Following receipt of the Mandatory Exercise Notice, the Holder will be required to exercise all or any portion of this Warrant still unexercised within 30 calendar days from the date of the Mandatory Exercise Notice (the "Mandatory Exercise Period"). Any unexercised portion of this Warrant on the day immediately following the last day of the Mandatory Exercise Period shall be immediately forfeited.

5. <u>No Fractional Shares</u>.

The Company shall not be required to issue fractional Warrant Shares upon the exercise of this Warrant or to deliver Warrant Certificates which evidence fractional Warrant Shares. In the event that a fraction of a Warrant Share would, except for the provisions of this Section 5, be issuable upon the exercise of this Warrant, the Company shall round the fraction down to the next whole number of the Warrant Share.

6. <u>Charges, Taxes, and Expenses</u>.

Issuance of certificates for Warrant Shares upon the exercise of this Warrant shall be made without charge to the Holder hereof for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder of this Warrant, or in such name or names as may be directed by the Holder of this Warrant; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other than the name of the Holder of this Warrant, the Company may require, as a condition thereto, that the transferee execute an appropriate investment representation as may be reasonably required by the Company.

7. <u>No Rights as Shareholders</u>.

This Warrant does not entitle the Holder hereof to any voting rights or other rights as a Shareholder of the Company prior to the exercise hereof.

8. <u>Securities Law Representations</u>.

Holder represents and warrants to Company as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Holder acknowledges that the Warrant Shares will initially be "restricted securities" (as such term is defined in Rule 144 promulgated under the Act) ("Rule 144") and that the certificates evidencing the Warrant Shares will include this legend:

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE."

Holder further acknowledges that the Warrant Shares cannot be sold unless registered with the United States Securities and Exchange Commission and qualified by appropriate state securities regulators, or unless Holder obtains written consent from Company and otherwise complies with an exemption from such registration and qualification (including, without limitation, compliance with Rule 144).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Holder has adequate means of providing for current needs and contingencies, has no need for liquidity in the investment, and is able to bear the economic risk of an investment in the Warrant and Warrant Shares offered by Company of the size contemplated. Holder represents that Holder is able to bear the economic risk of the investment and at the present time can afford a complete loss of such investment. Holder has had a full opportunity to inspect the books and records of the Company and to make any and all inquiries of Company officers and directors regarding the Company and its business as Holder has deemed appropriate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Holder is an "Accredited Investor" as defined in Regulation D of the Securities Act or Holder, either alone or with Holder's professional advisers who are unaffiliated with, have no equity interest in and are not compensated by Company or any affiliate or selling agent of Company, directly or indirectly, has sufficient knowledge and experience in financial and business matters that Holder is capable of evaluating the merits and risks of an investment in the Warrant and Warrant Shares offered by Company and of making an informed investment decision with respect thereto and has the capacity to protect Holder's own interests in connection with Holder's proposed investment in the Warrant and Warrant Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Holder is acquiring the Warrant and Warrant Shares solely for Holder's own account as principal, for investment purposes only and not with a view to the resale or distribution thereof, in whole or in part, and no other person or entity has a direct or indirect beneficial interest in such Warrant or Warrant Shares.

9. <u>Rule 144 Opinions</u>.

The Company will, at its own expense, provide any and all legal opinions required for the removal of any restrictive legend from any stock certificates representing Warrant Shares under Rule 144. The Company will not unreasonably withhold any legal opinion required for the removal of the restrictive legend from any certificates representing the Warrant Shares pursuant to Rule 144 and will process such request within five business days of receipt of such request.

10. <u>Exchange and Registry of Warrant</u>.

This Warrant is exchangeable, upon the surrender hereof by the registered Holder at the office of the Company, for a new Warrant or Warrants aggregating the total Warrant Shares of the surrendered Warrant of like tenor and dated as of such exchange. The Company shall maintain at its office a registry showing the name and address of the registered Holder of this Warrant. This Warrant may be surrendered for exchange, transfer, or exercise, in accordance with its terms, at such office of the Company, and the Company shall be entitled to rely in all respects, prior to written notice to the contrary, upon such registry.

11. <u>Loss, Theft, Destruction, or Mutilation of Warrant</u>.

Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction, or mutilation of this Warrant, and in case of loss, theft, or destruction, of indemnity reasonably satisfactory to it, and upon reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of this Warrant, if mutilated, the Company will make and deliver a new Warrant of like tenor (but with no additional rights or obligations) and dated as of such cancellation, in lieu of this Warrant.

12. <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 be a Saturday or a Sunday or shall be a legal holiday, then such action may be taken or such right may be exercised on the next succeeding day not a Saturday, Sunday, or legal holiday.

13. <u>Cash Distributions</u>.

If the Company issues cash dividends or interest on the Company's Common Stock or Other Securities that may become purchasable hereunder, the Exercise Price under this Warrant will be adjusted to reflect the diluted value of the Warrant.

14. <u>Consolidation, Merger, or Sale of the Company</u>.

If the Company is a party to a consolidation, merger, or transfer of assets which reclassifies or changes its outstanding Common Stock, the successor corporation (or corporation controlling the successor corporation or the Company, as the case may be) shall by operation of law assume the Company's obligations under this Warrant. Upon consummation of such transaction, the Warrants shall automatically become exercisable for the kind and amount of securities, cash, or other assets which the holder of a Warrant would have owned immediately after the consolidation, merger, or transfer if the holder had exercised the Warrant immediately before the effective date of such transaction. As a condition to the consummation of such transaction, the Company shall arrange for the person or entity obligated to issue securities or deliver cash or other assets upon exercise of the Warrant to, concurrently with the consummation of such transaction, assume the Company's obligations hereunder by executing an instrument so providing and further providing for adjustments which shall be as nearly equivalent as may be practical to the adjustments provided for in this Section 14.

15. <u>Adjustments for Stock Splits, Combinations, etc.</u>

The number of shares and class of capital stock purchasable under this Warrant are subject to adjustment from time to time as set forth in this Section 15.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Adjustment for change in capital stock. If 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;(i) pays a dividend or makes a distribution on its Common Stock, in each case, in shares of its 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) subdivides its outstanding shares of Common Stock into a greater number of shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) combines its outstanding shares of Common Stock into a smaller number of shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) makes a distribution on its Common Stock in shares of its capital stock other than Common Stock; 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;(v) issues by reclassification of its shares of Common Stock any shares of its capital stock;

then the number and classes of shares purchasable upon exercise of each Warrant in effect immediately prior to such action shall be adjusted so that the holder of any Warrant thereafter exercised may receive the number and classes of shares of capital stock of the Company which such holder would have owned immediately following such action if such holder had exercised the Warrant immediately prior to such action.

For a dividend or distribution, the adjustment shall become effective immediately after the record date for the dividend or distribution. For a subdivision, combination, or reclassification, the adjustment shall become effective immediately after the effective date of the subdivision, combination, or reclassification.

If after an adjustment the Holder, upon exercise of a Warrant, may receive shares of two or more classes of capital stock of the Company, the Board of Directors of the Company shall in good faith determine the allocation of the adjusted Exercise Price between or among the classes of capital stock. After such allocation, that portion of the Exercise Price applicable to each share of each such class of capital stock shall thereafter be subject to adjustment on terms comparable to those applicable to Common Stock in this Warrant. Notwithstanding the allocation of the Exercise Price between or among shares of capital stock as provided by this Section 15(a), a Warrant may only be exercised in full by payment of the entire Exercise Price currently in effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company will not, by amendment of its Articles 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 to be observed or performed hereunder by the Company. The Company shall at all times in good faith assist in the carrying out of all the provisions of this Section 15 and take all necessary or appropriate actions to protect the exercise rights of the Holders of this Warrant against impairment, including but not limited to obtaining a written agreement from any successor or acquiring entity to honor this Warrant in full and recognizing the Holder's right to the same terms and conditions in any new entity.

16. <u>Certificate as to Adjustments</u>.

In each case of any adjustment or readjustment in the shares of Common Stock (or Other Securities) issuable on the exercise of the Warrant, the Company at its expense will promptly cause its Chief Financial Officer or other appropriate designee to compute such adjustment or readjustment in accordance with the terms of the Warrant and prepare a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based, including a statement of (a) the consideration received or receivable by the Company for any additional shares of Common Stock (or Other Securities) issued or sold or deemed to have been issued or sold, (b) the number of shares of Common Stock (or Other Securities) outstanding or deemed to be outstanding, and (c) the Exercise Price and the number of shares of Common Stock to be received upon exercise of this Warrant, in effect immediately prior to such adjustment or readjustment and as adjusted or readjusted as provided in this Warrant. The Company will forthwith mail a copy of each such certificate to the Holder of the Warrant and any Warrant agent of the Company.

17. <u>Reservation of Stock Issuable on Exercise of Warrant</u>.

The Company will at all times reserve and keep available, solely for issuance and delivery on the exercise of the Warrant, shares of Common Stock (or Other Securities) from time to time issuable on the exercise of the Warrant.

18. <u>Assignment; Exchange of Warrant</u>.

This Warrant, and the rights evidenced hereby, may not be transferred to any third party other than an affiliate of the Holder without the prior written consent of the Company which may be withheld in the sole and absolute discretion of the Company and compliance with applicable securities laws. As a condition precedent to the Company considering whether to consent to a transfer, the Holder shall deliver to the Company a legal opinion from the Holder's counsel that such transfer is exempt from the registration requirements of applicable securities laws at the Holder's expense. If the Company consents to the proposed transfer (if applicable), upon surrender for exchange of this Warrant, together with evidence reasonably satisfactory to the Company demonstrating compliance with applicable securities laws and payment by the Holder of any applicable transfer taxes, the Company will issue and deliver to or on the order of the Holder a new Warrant of like tenor, in the name of the Holder and/or the transferee(s) specified (each a "Transferee"), calling in the aggregate on the face or faces thereof for the number of Warrant Shares called for on the face or faces of the Warrant so surrendered by the Holder; and provided further, that upon any such transfer, the Company may require, as a condition thereto, that the Transferee execute an appropriate investment representation as may be reasonably required by the Company.

19. <u>Notices</u>.

Any notice, request, instruction, or other document required by the terms of this Note, or deemed by any of the Parties hereto to be desirable, to be given to any other Party hereto shall be in writing and shall be given by personal delivery, overnight delivery, mailed by registered or certified mail, postage prepaid, with return receipt requested, or sent by electronic transmission to the addresses of the Parties set forth in the Subscription Agreement. The persons and addresses set forth in the Notice provision of the Subscription Agreement may be changed from time to time by a notice sent as aforesaid. If notice is given by mail in accordance with the provisions of this Section, such notice shall be conclusively deemed given upon receipt and delivery or refusal. If notice is given by electronic mail transmission in accordance with the provisions of this Section, such notice shall be conclusively deemed given at the time of delivery if between the hours of 9:00 a.m. and 5:00 p.m. Pacific time on a business day ("business hours") and if not during business hours, at 9:00 a.m. on the next business day following delivery, provided a delivery confirmation is obtained by the sender.

20. <u>Notices of Record Date</u>.

In case,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company takes a record of the holders of its Common Stock for the purpose of entitling them to subscribe for or purchase any shares of stock of any class or to receive a dividend, distribution, or any other rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) There is any capital reorganization of the Company, reclassification of the capital stock of the Company (other than a subdivision or combination of its outstanding shares of Common Stock), or consolidation or merger of the Company with or into another corporation which does not constitute a sale of the Company; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) There is a voluntary or involuntary dissolution, liquidation, or winding up of the Company;

then, and in any such case, the Company shall cause to be mailed to the Holder, at least 20 business days prior to the date hereinafter specified, a notice stating the date on which (i) a record is to be taken for the purpose of such dividend, distribution or rights, or (ii) such reclassification, reorganization, consolidation, merger, dissolution, liquidation, or winding up is to take place and the date, if any is to be fixed, as of which holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reclassification, reorganization, consolidation, merger, dissolution, liquidation, or winding up.

21. <u>Amendments and Supplements</u>.

The Company may from time to time supplement or amend this Warrant without the approval of any Holders in order to cure any ambiguity or to correct or supplement any provision contained herein which may be defective or inconsistent with any other provision, or to make any other provisions in regard to matters or questions herein arising hereunder which the Company may deem necessary or desirable and which shall not materially adversely affect the interest of the Holder. All other supplements or amendments to this Warrant must be signed by the party against whom such supplement or amendment is to be enforced.

22. <u>Investment Intent</u>.

Holder represents and warrants to the Company that Holder is acquiring the Warrants for investment and with no present intention of distributing or reselling any of the Warrants.

23. <u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Warrant shall be governed by and construed in accordance with the laws of the State of California without regard to principles of conflicts of laws. The Company and the Holder hereby submit to the exclusive jurisdiction of the Courts of Orange County, State of California for the resolution of all legal disputes arising under the terms of this Warrant. The Company and the Holder agree to waive trial by jury.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If any action or proceeding is brought by the Company on the one hand or by the Holder on the other hand to enforce or continue any provision of this Warrant, the prevailing party's costs and expenses, including its reasonable attorneys' fees, in connection with such action or proceeding shall be paid by the other party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In the event that any provision of this Warrant is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect any of the terms hereof.

**[SIGNATURE PAGE FOLLOWS]**

**IN WITNESS WHEREOF**, the Company has caused this Warrant to be executed by its officers thereunto duly authorized as of the date first written above.

---

| | |
|:---|:---|
| **COMPANY:** | **COMPANY:** |
| **ALTERNATIVE BALLISTICS CORPORATION**, | **ALTERNATIVE BALLISTICS CORPORATION**, |
| a Nevada corporation | a Nevada corporation |
| By: | Steven Luna |
| Its: | Chief Executive Officer |

---

---

| |
|:---|
| **HOLDER:** |
| By: |
| Its: |

---

**ANNEX A**

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF CERTAIN STATES, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE.

NOTICE OF EXERCISE

The undersigned hereby elects irrevocably to exercise the within Warrant and to purchase shares of Common Stock of Alternative Ballistics Corporation and hereby makes payment of $(at the rate of $________________ per share) in payment of the Exercise Price pursuant hereto. Please issue the shares as to which this Warrant is exercised in accordance with the instructions given below.

INSTRUCTIONS FOR REGISTRATION OF SHARES

Name (print) _______________________________________________________________________________

Address (print) ____________________________________________________________________________

Address (print) ____________________________________________________________________________

ASSIGNMENT

FOR VALUE RECEIVED,______________________________ does hereby sell, assign, and transfer unto _______________________________________, the right to purchase_________________________shares of Common Stock of Alternative Ballistics Corporation, evidenced by the within Warrant, and does hereby irrevocably constitute and appoint _________________________________________attorney to transfer such right on the books of Alternative Ballistics Corporation, with full power of substitution on the premises.

Dated: ___________________, 20___ <br>Signature:  

Notice: The signature of Notice of Exercise or Assignment must correspond with the name as written upon the face of the within Warrant in every particular without alteration or enlargement or any change whatsoever.

**DISCLOSURE DOCUMENT**

Offering Circular on Form 1-A

of

Alternative Ballistics Corporation

dated June 10, 2024

https://www.sec.gov/Archives/edgar/data/1834868/000149315224023306/partiiandiii.htm

## Add

**Exhibit 6.26**

**ALTERNATIVE BALLISTICS CORPORATION, A NEVADA CORPORATION**

**BRIDGE LOAN OFFERING DOCUMENTS**

***February 2, 2026***

 ****

**Documents included in this package:**

&nbsp;&nbsp;&nbsp;&nbsp;**1.** **Instructions for Payment** 

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **Subscription Agreement** 

&nbsp;&nbsp;&nbsp;&nbsp;**3.** **Investor Representations and Warranties Agreement** 

&nbsp;&nbsp;&nbsp;&nbsp;**4.** **Convertible Note** 

&nbsp;&nbsp;&nbsp;&nbsp;**5.** **Warrant Agreement** 

&nbsp;&nbsp;&nbsp;&nbsp;**6.** **Disclosure Document** 

**INSTRUCTIONS FOR PAYMENT**

Review and complete the Bridge Loan Offering Documents and mail or deliver them, along with a check made payable to "Alternative Ballistics Corporation" in the amount of your investment to:

**Alternative Ballistics Corporation**

Attn: Steve Luna, Chief Executive Officer

5940 S. Rainbow Blvd.

Las Vegas, NV 89118

For any inquiries, please contact:

Steve Luna, Chief Executive Officer

Email: steve@alternativeballistics.com

Phone: 619-326-4411

We prefer you to send a wire transfer instead of a check. Please scan and email the signed Bridge Loan Offering Documents to the email address above and send the wire transfer using these instructions:

**Wiring Instructions:**

US Bank

Wire Transfer Department

P.O. Box 64830

St. Paul, MN 55164-0830

Phone: 800-872-2657

**Routing Number: 122235821**

For Further Credit to: Alternative Ballistics Corporation

**Account Number: 157523676557**

**<u>SUBSCRIPTION AGREEMENT</u>**

This SUBSCRIPTION AGREEMENT is made on January 29, 2026 by and between Alternative Ballistics Corporation, a Nevada corporation (the "Company") and <u>Katinger Family Trust</u>, a <u>Revocable Trust</u> individual/company type (the "Investor") (the Company and the Investor may be referred to individually as a "Party" or collectively as the "Parties") as of the date set forth on the signature page of this Agreement.

**RECITALS:**

**WHEREAS**, the Company is offering to the Purchaser a $50,000 convertible promissory note (the "Note"), convertible into shares of the Company's common stock at a conversion price of $1.00 per share, representing a 50% discount to the current Regulation A offering price, together with 100% warrant coverage (the "Warrant")

**WHEREAS,** the Investor desires to subscribe for the Note and Warrant (and together with the shares of common stock into which the Note is convertible, and the shares of common stock underlying the Warrant, referred to herein as the "Securities") for the purchase price of $50,000 (the "Purchase Price"); and

**WHEREAS,** this Subscription Agreement is part of a package of documents, including Instructions for Payment, Investor Representations and Warranties Agreement, the Note, Warrant, and Disclosure Document (hereinafter defined), all of which are incorporated herein by reference (the "Transaction Documents").

**NOW THEREFORE,** in consideration of the promises and respective mutual agreements herein contained, it is agreed by and between the Parties hereto as follows:

**ARTICLE I.**

**THE SECURITIES**

<u>Section 1.01. THE PURCHASE OF THE SECURITIES</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *Subscription*. The Investor is purchasing the Securities, on the terms set forth in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *Convertible Note*. The Note shall be in the form attached hereto, the terms of which are hereby incorporated herein as if such Note was fully set forth herein; provided, however, that in the event of any conflict between the express provisions of the Note and this Subscription Agreement, the provisions of the Note shall control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. Loan
 Amount. The Note shall be in the amount of $50,000. Investor shall pay for the Securities
 within **48hrs** of signing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. Maturity
 Date. The principal balance and all accrued and unpaid interest thereon shall be due and
 payable nine months from the date of the Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. Interest
 Rate. The Note shall bear an interest rate of 18% per annum.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv. Prepayment.
 In the event of a prepayment of the Loan prior to the Maturity Date, the Company shall pay
 120% of the Principal Balance plus any accrued and unpaid interest on the original Principal
 Balance of the Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;v. Conversion.
 The outstanding principal balance of this Note, together with all accrued and unpaid interest
 thereon (collectively, the "Conversion Amount"), may, at any time prior to the
 Maturity Date, be converted, at the option of the Company, into fully paid and non-assessable
 shares of the Company's common stock at the Conversion Price. For purposes hereof,
 the "Conversion Price" shall mean **$1.00 per share of common stock**, subject
 to adjustment as may be expressly provided elsewhere in this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *Warrant*. The Warrant shall be in the form attached hereto, the terms of which are hereby incorporated herein as if such Warrant were fully set forth herein; provided, however, that in the event of any conflict between the express provisions of the Warrant and this Subscription Agreement, the provisions of the Warrant shall control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. Exercise
 Price. The Warrant shall have an exercise price equal to $1.00

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. Term.
 The Warrant shall be exercisable for two years from the date of issuance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. Leak
 Out. During the Leak Out Period (defined below), the Investor's sale of common stock
 upon exercise of the Warrants shall be limited to 5% of the daily trading volume of the common
 stock on the immediately prior Trading Day. "Trading Day" shall mean a day on
 which Nasdaq or a similar U.S. nationally-recognized stock exchange is open for trading.
 "Leak Out Period" shall mean 12 months following the exercise of the warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv. Mandatory
 Exercise of Warrants. The Company shall have the right to require the Investor to exercise
 all or any portion of the Warrant that is still unexercised for a cash exercise when the
 closing price of the Company's common stock on Nasdaq or a similar U.S. nationally-recognized
 stock exchange equals or exceeds $5.00 for ten consecutive Trading Days. The Company shall
 deliver to the Investor a notice to exercise and any amount not exercised following such
 notice shall be immediately forfeited.

<u>Section 1.02. CLOSING</u>.

The purchase and sale of the Securities will take place at one closing (the "Closing") at a time and date as soon as practicable after all the conditions set forth in Articles III and IV hereof have been satisfied ("Closing Date"), and at such time and location as the Investor and the Company shall agree.

<u>Section 1.03. DELIVERY</u>.

At or prior to the Closing, the Investor shall deliver to the Company the Purchase Price for the Securities and all Transaction Documents signed by the Investor. At the Closing, the Company shall deliver to the Investor all Transaction Documents counter-signed by the Company.

<u>Section 1.04. LEGENDS; SECURITIES NOT REGISTERED UNDER THE SECURITIES ACT OF 1933</u>.

The Securities have not been registered under the Securities Act of 1933, as amended (the "Act"). Each of the certificates for the Securities shall bear substantially the following legend:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE.

The Offering is not a public offering and is intended to be made pursuant to exemptions from registration as set forth in Section 4(2) of the Act and Regulation D as promulgated by the Securities and Exchange Commission ("SEC") under the Act. This Offering is also intended to be exempt from the registration requirements of various state securities laws as may be applicable.

**ARTICLE II.**

**REPRESENTATIONS AND WARRANTIES**

<u>Section 2.01. INVESTOR REPRESENTATIONS AND WARRANTIES</u>.

The Investor makes each and every one of the representations and warranties set forth in the document entitled Investor Representations and Warranties Agreement attached hereto and incorporated herein by this reference as if such document were set forth herein in its entirety.

<u>Section 2.02. COMPANY REPRESENTATIONS AND WARRANTIES</u>.

The Company hereby represents, warrants, and covenants to the Investor as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company has been duly organized and validly existing as a corporation in good standing under the laws of the state of its incorporation. The Company is duly qualified or licensed and in good standing as a foreign corporation in each jurisdiction in which its ownership or leasing of any properties or the character of its operations requires such qualification or licensing and where failure to so qualify would have a material effect on the Company. The Company has all requisite corporate power and authority, and all material and necessary authorizations, approvals, orders, licenses, certificates, and permits of and from all governmental regulatory officials and bodies to own or lease its properties and conduct its businesses as described in the Company's Offering Circular on Form 1-A dated June 10, 2024 (hereinafter, the "Disclosure Document") and the Company is doing business in compliance with all such authorizations, approvals, orders, licenses, certificates, and permits and all federal, state, and local laws, rules, and regulations concerning the business in which it is engaged except where the failure so to do business in compliance would not have a material adverse effect on the business of the Company. The disclosures herein and in the Disclosure Document concerning the effects of federal, state, and local regulation on the Company's business as currently conducted and as contemplated are correct in all material respects and do not omit to state a material fact. The Company has all corporate power and authority to enter into the Transaction Documents and to carry out the provisions and conditions hereof and thereof, and all consents, authorizations, approvals, and orders required in connection herewith and therewith have been obtained or will have been obtained prior to the Closing Date. No consent, authorization, or order of, and no filing with any court, government agency, or other body is required for the issuance of the Securities pursuant to this Agreement except with respect to applicable federal and state securities laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) This Agreement and the Transaction Documents have been duly and validly authorized, executed, and delivered by the Company and are valid and binding agreements of the Company, enforceable in accordance with their respective terms, except to the extent that the enforceability hereof or thereof may be limited by (A) bankruptcy, insolvency, reorganization, moratorium, or similar laws from time to time in effect and affecting the rights of creditors generally; (B) limitations upon the power of a court to grant specific performance or any other equitable remedy; or (C) a finding by a court of competent jurisdiction that the indemnification provisions herein are in violation of public policy. The Securities have been duly authorized and are validly issued, fully paid, and non-assessable; all corporate action required to be taken for the authorization, issue, and sale of such securities has been duly and validly taken; and to the best knowledge of the Company, the Securities are not and will not be subject to the preemptive rights of any stockholder of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Company has good and marketable title to, or valid and enforceable leasehold estates in, all items of real and personal property owned or leased by it, free and clear of all liens, claims, encumbrances, security interests, and defects of any material nature whatsoever, except for Permitted Liens. "Permitted Liens" means liens, claims, encumbrances, security interests, and defects of any material nature whatsoever that are described in the Disclosure Document or otherwise disclosed to the Investor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) There is no litigation or governmental proceeding pending or threatened against or involving the properties or business of the Company which the Company believes would materially adversely affect the value or the operation of the properties or the business of the Company, except as set forth in the Disclosure Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) There has been no material adverse change in the condition or prospects for commercialization of the Company, financial or otherwise, as of the latest dates as of which such condition or prospects, respectively, are set forth in this Agreement and the Disclosure Document; and the outstanding debt, property, and the business of the Company conform in all material respects to the descriptions thereof contained herein and therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Securities shall conform in all respects to all statements in relation thereto contained herein or in the Disclosure Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Company is not in material violation of its Articles of Incorporation, or its Bylaws. Neither the execution and delivery of the Transaction Documents, nor the issuance of the Securities, nor the consummation of any of the transactions contemplated herein or in the Note or Warrant, nor the compliance by the Company with the terms and provisions contained herein, or in the Note or Warrant, has conflicted with or will conflict with, or has resulted in or will result in a breach of, any of the terms and provisions of, or has constituted or will constitute a default under, or has resulted in or will result in the creation or imposition of any lien, charge, or encumbrance upon any property or assets of the Company pursuant to the terms of any indenture, mortgage, deed of trust, note, loan or credit agreement, or any other agreement or instrument evidencing an obligation for borrowed money, or any other agreement or instrument to which the Company is subject; nor will such action result in any violation of the provisions of the Articles of Incorporation or the Bylaws of the Company, or any statute or any order, rule, or regulation applicable to the Company of any court or of any federal, state, or other regulatory authority or other government body having jurisdiction over the Company; except for any conflict, breach, default, lien, charge, or encumbrance which does not have a material and adverse effect on the Company, any of its business, property, or assets or any transactions contemplated hereby or by the Note or Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Subsequent to the dates as of which information is given in this Agreement or the Disclosure Document, and except as may otherwise be indicated or contemplated herein or therein, the Company has not entered into any transaction other than in the ordinary course of business or declared or paid any dividend or made any other distribution on or in respect of its capital stock. The Investor acknowledges that the Company may conduct financing activities in the future which would result in the issuance of securities of the Company to third parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Company owns or possesses, free and clear of all liens or encumbrances and rights thereto or therein by third parties, other than Permitted Liens, the requisite licenses or other rights to use all trademarks, service marks, copyrights, service names, trade names, patents, patents applications, and licenses necessary to conduct and material to their businesses (including, without limitation any such licenses or rights described herein as being owned or possessed by the Company), and there is no material claim or action by any person pertaining to, or proceeding, pending or threatened, which challenges the exclusive rights of the Company with respect to any trademarks, service marks, copyrights, service names, trade names, patents, patent applications, and licenses used in the conduct of the Company's business (including, without limitation, any such licenses or rights described herein or in the Disclosure Document as being owned or possessed by the Company); the Company's current products, services, and processes do not and will not infringe on any patents currently held by third parties, to the best knowledge of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Neither the Disclosure Document nor any of the documents contained in the Transaction Documents contain any untrue statement of a material fact or omits to state any material fact required to be stated herein or therein or necessary to make the statements herein or therein, considering the circumstances under which they were made, not misleading. All statements of material facts herein or therein (including, without limitation, any attachment, exhibit, or schedule hereto or thereto) are true and correct as of the date hereof and will be true and correct on the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) The Company shall use the proceeds from this Offering for costs and expenses of related to its initial public offering as well as for general working capital purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) Neither the Company, nor any of its respective officers, directors, employees, or agents, nor any other person acting on behalf of the Company has, directly or indirectly, given or agreed to give any money, gift, or similar benefit (other than legal price concessions to customers in the ordinary course of business) to any customer, supplier, employee, or agent of a customer or supplier, or official or employee of a customer or supplier, or official or employee of any governmental agency or instrumentality of any government (domestic or foreign) or any political party or candidate for office (domestic or foreign), or other person who is or may be in a position to help or hinder the business of the Company (or assist it in connection with any actual or proposed transaction) which (A) might subject the Company to any damage or penalty in any civil, criminal, or governmental litigation or proceeding; (B) if not given in the past, might have had a materially adverse effect on the assets, business, or operations of the Company as reflected in the financial statements delivered to the Investor, if any; or (C) if not continued in the future, might adversely affect the assets, business, operations, or prospects of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) The Company has not paid or promised to pay any form of compensation to any unlicensed finders, whether in the form of finder's fees, origination fees, referral fees, or otherwise, in connection with this Offering.

**ARTICLE III.**

**CONDITIONS TO THE INVESTOR'S OBLIGATIONS**

The obligation of the Investor to purchase the Securities at Closing is subject to the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The representations and warranties of the Company contained herein shall be true and correct in all material respects on and as of the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) There shall be no preliminary or permanent injunction or other order, decree, or ruling issued by a court of competent jurisdiction or by a governmental, regulatory, or administrative agency or commission, nor any statute, rule, regulation, or order promulgated or enacted by any governmental authority, prohibiting, or otherwise restraining the sale or purchase of the Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) On or prior to the Closing Date, the Investor shall have been furnished such documents, certificates, and opinions as they may reasonably require for the purpose of enabling them to review or pass upon the matters set forth herein, or in order to evidence the accuracy, completeness, or satisfaction of any of the representations, warranties, or conditions herein contained.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Prior to the Closing, (i) there shall have been no material adverse change nor development involving a prospective change in the condition, prospects, or the business activities, financial or otherwise, of the Company as a whole, from the latest dates as of which such condition is set forth in this Subscription Agreement and the Disclosure Document; (ii) there shall have been no transaction, not in the ordinary course of business, entered into by the Company from the latest date as of which the financial condition of the Company is set forth in this Subscription Agreement which is material to the Company and which has not been disclosed to the Investor in writing; (iii) the Company shall not be in default in any material respect under any provision of any instrument relating to any outstanding indebtedness; (iv) no material amount of the assets of the Company shall have been pledged or mortgaged; and (v) no action, suit, or proceeding, at law or in equity, shall have been pending or threatened against the Company or affecting any of its respective properties or businesses before or by any court of federal or state commission, board, or other administrative agency wherein an unfavorable decision, ruling, or finding could materially adversely affect the business, operations, prospects, or financial condition or income of the Company.

**ARTICLE IV.**

**CONDITIONS TO THE COMPANY'S OBLIGATIONS**

The obligation of the Company to sell the Securities under this Agreement at the Closing is subject to the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The representations and warranties of the Investor contained in the document entitled Investor Representations and Warranties Agreement attached hereto shall be true and correct in material respects on and as of the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) There shall be no preliminary or permanent injunction or other order, decree, or ruling issued by a court of competent jurisdiction or by a governmental, regulatory, or administrative agency or commission, nor any statute, rule, regulation, or order promulgated or enacted by any governmental authority, prohibiting, or otherwise restraining the sale or purchase of the Securities.

**ARTICLE V.**

**INDEMNIFICATION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company hereby agrees to defend, indemnify, and hold harmless the Investor, their stockholders, directors, partners, employees, agents, attorneys, and each person, if any, who controls such Investor within the meaning of the Act against any and all losses, claims, damages, or liabilities to which such Investor or any such stockholder, director, partner, employee, agent, attorney, or controlling person may become subject under the Act or otherwise, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained herein, in the Disclosure Document, or in any statement made to or in any filing with the Commission or to or with any state securities commission, bureau, or office (including any amendments thereto), or arise out of or based upon the omission or alleged omission to state herein or therein a material fact required to be stated herein or therein or necessary to make the statements herein or therein not misleading (unless such statements are made or omitted in reliance upon and in conformity with written information furnished to the Company with respect to such Investor by such Investor expressly for use herein or therein or any amendment hereof or supplement hereto), or any violation by the Company of the Act or state "blue sky" laws, or any breach by the Company of their obligations, representations, or warranties hereunder or with respect to the Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Investor hereby agrees to defend, indemnify, and hold harmless the Company and its respective stockholders, directors, employees, agents, and each person, if any, who controls any of the foregoing within the meaning of the Act against any and all losses, claims, damages, or liabilities to which the Company or any of the Company's stockholders, directors, employees, agents, or controlling persons may become subject under the Act or otherwise, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any written statement as it relates to the Offering, as made by the Investor, its stockholders, directors, partners, agents, or employees or any breach by such Investor of its obligations, representations, or warranties hereunder, provided that such statement or breach was made knowingly and intentionally.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Promptly after receipt by an indemnified party under either subparagraph (a) or (b), as the case may be, of the notice of commencement of any action covered by subparagraph (a) or (b), such indemnified party shall within five business days notify the indemnifying party of the commencement thereof; the omission by one indemnified party to so notify such indemnifying party shall not relieve the indemnifying party of its obligations hereunder except to the extent such indemnifying party has been materially prejudiced by such omission, shall not relieve the indemnifying party of its obligation to indemnify any other indemnified party that has given such notice and shall not relieve the indemnifying party of any liability outside of this indemnification. If any action is brought against the indemnified party, it shall notify the indemnifying party in a timely manner, the indemnifying party will be entitled to participate in such action and, to the extent it may desire, to assume and control the defense thereof with counsel chosen by it. After notice from the indemnifying party to such indemnified party of its election to so assume the defense thereof, the indemnifying party will not be liable to such indemnified party under such subparagraph for any legal or other expense subsequently incurred by such indemnified party in connection with the defense thereof, but the indemnified party may, at its own expenses, participate in such defense by counsel chosen by it without, however, impairing the indemnifying party's control of the defense. Notwithstanding anything to the contrary contained herein, the indemnified party shall have the right to choose its own counsel and control the defense of any action, all at the reasonable expense of the indemnifying party, if (i) the employment of such counsel shall have been authorized in writing by the indemnifying party in connection with the defense of such action at the expense of the indemnifying party; (ii) the indemnifying party shall not have employed counsel reasonably satisfactory to such indemnified party to have charge of the defense of such action within a reasonable time after notice of commencement of the action; or (iii) such indemnified party shall have reasonably concluded that there may be defenses available to such indemnified party that differ from the defenses available to the indemnifying party (in which case the indemnifying party shall not have the right to direct the defense of such action on behalf of such indemnified party), in any of which events such reasonable fees and expenses of one additional counsel (for all indemnified parties) shall be borne by the indemnifying party (in the case of the Investor, one additional counsel for Investor). No settlement of any action or proceeding against an indemnified party shall be made without the consent of the indemnified party, which consent shall not be unreasonably withheld.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) In order to provide for just and equitable contribution under the Act in any case in which (i) any indemnified party makes a claim for indemnification pursuant to this paragraph but it is judicially determined (by entry of a final judgment or decree by a court of competent jurisdiction and the expiration of the time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case, notwithstanding the fact the this paragraph provides for indemnification in such case, or (ii) contribution under the Act is required on the part of any such person in circumstances for which indemnification is provided under this paragraph, then, in each such case, the Company shall be solely responsible for all aggregate losses, claims, damages, or liabilities, and the Investor shall not be required to contribute to these losses beyond the amount of the Securities purchased by such Investor pursuant to the Subscription Agreement; provided, that in any such case, no person guilty of a fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

**ARTICLE VI.**

**NOTICES**

Any notice, request, instruction, or other document required by the terms of this Agreement, or deemed by any of the Parties hereto to be desirable, to be given to any other Party hereto shall be in writing and shall be given by personal delivery, overnight delivery, mailed by registered or certified mail, postage prepaid, with return receipt requested, or sent by electronic mail (with receipt confirmed) to the addresses of the Parties as follows:

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| | |
|:---|:---|
| Company: | Alternative Ballistics Corporation |
|  | 5940 S. Rainbow Blvd. |
|  | Las Vegas, NV 89118 |
|  | Email: steve@alternativeballistics.com |
|  | Attn: Steven Luna, CEO |
| Investor: | At the address below Investor's signature on this Agreement |

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The persons and addresses set forth above may be changed from time to time by a notice sent as aforesaid. If notice is given by personal delivery or overnight delivery in accordance with the provisions of this Section, such notice shall be conclusively deemed given at the time of such delivery provided a receipt is obtained from the recipient. If notice is given by mail in accordance with the provisions of this Article, such notice shall be conclusively deemed given upon receipt and delivery or refusal. If notice is given by electronic mail transmission in accordance with the provisions of this Article, such notice shall be conclusively deemed given at the time of delivery if during business hours and if not during business hours, at the next business day after delivery, provided a confirmation is obtained by the sender.

**ARTICLE VII.**

**MISCELLANEOUS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of California applicable to contracts made and to be performed entirely therein, without giving effect to the rules of conflicts of law. The Parties agree that the courts of the County of Orange, State of California shall have sole and exclusive jurisdiction and venue for the resolution of all disputes arising under the terms of this Agreement and the transactions contemplated herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) This Agreement represents the entire agreement between the Parties relating to the subject matter hereof, superseding any and all prior to contemporaneous oral and prior written agreements and understandings. This Agreement may not be modified or amended, nor may any right be waived except by a writing signed by the party against whom the modification or waiver is sought to be enforced.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The warranties, representations, and covenants of the Company and the Investor contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The captions and headings contained herein are solely for convenience of reference and do not constitute a part of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Each of the Transaction Documents is hereby incorporated herein as if each of such attachments were fully set forth herein in its entirety. Each of such attachments is hereby expressly made a part of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The Parties agree that this Agreement may be executed by facsimile signatures and such signatures shall be deemed originals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) All Parties to this Agreement have been given the opportunity to consult with counsel of their choice regarding their rights under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The term "days," as used in this Agreement and in all documents contained in the Transaction Documents, refers to calendar days unless otherwise clearly indicated.

**[SIGNATURE PAGE FOLLOWS]**

**IN WITNESS WHEREOF**, intending to be legally bound, the Parties hereto have executed this Agreement as of the July 22, 2025.

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| | |
|:---|:---|
| **COMPANY:** | **COMPANY:** |
| **Alternative Ballistics Corporation,** | **Alternative Ballistics Corporation,** |
| a Nevada corporation | a Nevada corporation |
| */s/ Steven Luna* | */s/ Steven Luna* |
| By: | Steven Luna |
| Its: | Chief Executive Officer |

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**PURCHASER:**

**<u>Katinger Family Trust</u>** (Investor Name)

**<u>Company</u>** (Investor Type "individual or company")

A. Has the limited liability company been formed for the specific purpose of investing in the Units?

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| | | | |
|:---|:---|:---|:---|
| ☐ | YES | ☐ | NO |

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If your answer to question A is "No" CHECK whichever of the following statements (1-5) is applicable to you. If your answer to question A is "Yes" the Purchaser must be able to certify to statement (B) below in order to qualify as an "accredited investor."

The undersigned entity certifies that it is an "accredited investor" because it is:

1. _______ an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974, provided that the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, and the plan fiduciary is a bank, savings and loan association, insurance company or registered investment adviser; or

2. _______ an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974 that has total assets in excess of $5,000,000; or

3. _______ each of its shareholders, partners, or beneficiaries meets at least one of the following conditions described above under Individual Accredited Investor Status. Please also CHECK the appropriate space in that section below; or

4. _______ the plan is a self directed employee benefit plan and the investment decision is made solely by a person that meets at least one of the conditions described above under Individual Accredited Investor Status; or

5. _______ an entity with total assets in excess of $5,000,000.

B. If the answer to Question A above is "Yes," please certify the statement below is true and correct:

_____X__ The undersigned entity certifies that it is an accredited investor because each of its members meets at least one of the following conditions described below under Individual Accredited Investor Status. Please also CHECK the appropriate space in that section.

**ONLY COMPLETE THE FOLLOWING IF YOU CHECKED A.3. OR B:, AND THEN PLEASE COMPLETE THE FOLLOWING FOR *EVERY* MEMBER OF THE LIMITED LIABILITY COMPANY:**

&nbsp;&nbsp;&nbsp;&nbsp;1. Member Name: <u>Michael Edward Breede</u> 

I certify that I am an individual **"accredited investor"** because:

_____X__ I had an individual income of more than $200,000 in each of the two most recent calendar years, and I reasonably expect to have an individual income in excess of $200,000 in the current calendar year; or my spouse and I had joint income in excess of $300,000 in each of the two most recent calendar years, and we reasonably expect to have a joint income in excess of $300,000 in the current calendar year.

**OR**

_______ I have an individual net worth, or my spouse and I have a joint net worth, in excess of $1,000,000 (excluding my (our) primary residence).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Member Name:

I certify that I am an individual "accredited investor" because:

_______ I had an individual income of more than $200,000 in each of the two most recent calendar years, and I reasonably expect to have an individual income in excess of $200,000 in the current calendar year; or my spouse and I had joint income in excess of $300,000 in each of the two most recent calendar years, and we reasonably expect to have a joint income in excess of $300,000 in the current calendar year.

**OR**

_______ I have an individual net worth, or my spouse and I have a joint net worth, in excess of $1,000,000 (excluding my (our) primary residence).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Member Name:

I certify that I am an individual "accredited investor" because:

_______ I had an individual income of more than $200,000 in each of the two most recent calendar years, and I reasonably expect to have an individual income in excess of $200,000 in the current calendar year; or my spouse and I had joint income in excess of $300,000 in each of the two most recent calendar years, and we reasonably expect to have a joint income in excess of $300,000 in the current calendar year.

**OR**

_______ I have an individual net worth, or my spouse and I have a joint net worth, in excess of $1,000,000 (excluding my (our) primary residence).

[If there are additional members of the LLC, please duplicate this page.]

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| | |
|:---|:---|
| **Investor:** | **Katinger Family Trust** |
| Print Name: | Ronald Katinger |
| Its: | Grantor |

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| |
|:---|
| [Signature] |
| Address |
| Address |
| Email Address |
| Social Security/Tax I.D. Number |

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**INVESTOR REPRESENTATIONS AND WARRANTIES AGREEMENT**

This INVESTOR REPRESENTATIONS AND WARRANTIES AGREEMENT ("Agreement"), dated as of the date set forth on the signature page of this Agreement, is by and between Alternative Ballistics Corporation, a Nevada corporation (the "Company") and the purchaser set forth on the signature page of this Agreement, or assigns (the "Investor") (the Company and the Investor may be referred to individually as a "Party" and, collectively, as the "Parties").

**RECITALS:**

This Agreement is being made pursuant to an Offering by the Company of the purchase of a Convertible Note (the "Note") and warrants to purchase shares of common stock (the "Warrant" and collectively with the Note, the shares of common stock into which the Note is convertible, and the shares of common stock underlying the Warrant, the "Securities"). The Securities are being issued on the Closing (as defined in the Subscription Agreement) pursuant to a Subscription Agreement of even date herewith between the Company and the Investor which contains representations and warranties and additional covenants of the Company with respect to the sale of the Securities. Capitalized terms not otherwise defined herein shall have the meaning set forth in the Subscription Agreement. THE PROVISIONS OF THE SUBSCRIPTION AGREEMENT ARE INCORPORATED HEREIN BY REFERENCE.

**ARTICLE 1.**

**REPRESENTATIONS AND WARRANTIES OF THE INVESTOR**

The Investor hereby represents and warrants that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Investor acknowledges that the Securities are "restricted securities" (as such term is defined in Rule 144 promulgated under the Securities Act of 1933, as amended ("Rule 144"), that the Securities will include the restrictive legend set forth in Section 1.04 of the Subscription Agreement, and, except as otherwise set forth in the Subscription Agreement, that the Securities cannot be sold unless registered with the United States Securities and Exchange Commission ("SEC") and qualified by appropriate state securities regulators, or unless Investor otherwise complies with an exemption from such registration and qualification (including, without limitation, compliance with Rule 144).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Investor has adequate means of providing for current needs and contingencies, has no need for liquidity in the investment, and is able to bear the economic risk of an investment in the Securities. Investor represents that Investor is able to bear the economic risk of the investment and at the present time could afford a complete loss of such investment. Investor has reviewed the Transaction Documents with care. Additionally, Investor has had a full opportunity to inspect the Disclosure Document and to make any and all inquiries of Company officers and directors regarding the Company and its business as Investor has deemed appropriate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Investor is an "Accredited Investor" as defined in Regulation D of the Act. Investor, either alone or with Investor's professional advisers who are unaffiliated with, have no equity interest in, and are not compensated by the Company or any affiliate or selling agent of the Company, directly or indirectly, has sufficient knowledge and experience in financial and business matters that Investor is capable of evaluating the merits and risks of an investment in the Securities offered by the Company and of making an informed investment decision with respect thereto and has the capacity to protect Investor's own interests in connection with Investor's proposed investment in the Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Investor is acquiring the Securities solely for Investor's own account as principal, for investment purposes only and not with a view to the resale or distribution thereof, in whole or in part, and no other person or entity has a direct or indirect beneficial interest in such Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Investor will not sell or otherwise transfer the Securities without registration under the Act or an exemption therefrom and fully understands and agrees that Investor must bear the economic risk of Investor's purchase for an indefinite period of time because, among other reasons, the Securities have not been registered under the Act or under the securities laws of any state and, therefore, cannot be resold, pledged, assigned, or otherwise disposed of unless they are subsequently registered under the Act and under the applicable securities laws of such states or unless an exemption from such registration is available.

**ARTICLE 2.**

**MISCELLANEOUS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of California applicable to contracts made and to be performed entirely therein, without giving effect to the rules of conflicts of law. The Parties agree that the courts of the County of Orange, State of California shall have sole and exclusive jurisdiction and venue for the resolution of all disputes arising under the terms of this Agreement and the transactions contemplated herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The warranties and representations of the Investor contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The Parties agree that this Agreement may be executed by facsimile signatures and such signatures shall be deemed originals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) All Parties to this Agreement have been given the opportunity to consult with counsel of their choice regarding their rights under this Agreement.

**IN WITNESS WHEREOF**, intending to be legally bound, the Parties hereto have executed this Agreement as of July 22, 2025.

---

| | |
|:---|:---|
| **COMPANY:** | **COMPANY:** |
| **Alternative Ballistics Corporation,** | **Alternative Ballistics Corporation,** |
| a Nevada corporation | a Nevada corporation |
| By: | Steven Luna |
| Its: | Chief Executive Officer |

---

---

| | |
|:---|:---|
| **INVESTOR:** | **INVESTOR:** |
| Katinger Family Trust | Katinger Family Trust |
| By: | Ronald Katinger |
| Its: | Grantor |

---

**THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE OFFERED, SOLD TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE.**

**ALTERNATIVE BALLISTICS CORPORATION, A NEVADA CORPORATION**

**CONVERTIBLE NOTE**

This Convertible Note (this "Note") has been issued pursuant to a Subscription Agreement dated February 2, 2026 (the "Subscription Agreement") between the Company and the holder of this Note (the "Noteholder"). Capitalized terms not otherwise defined herein shall have the meaning set forth in the Subscription Agreement, the provisions of which are incorporated herein by reference.

---

| | |
|:---|:---|
| **$50000** | **Date: February 2, 2026** |

---

1. <u>The Obligation</u>. FOR VALUE RECEIVED, the undersigned, Alternative Ballistics Corporation, a Nevada corporation (the "Company"), hereby promises to pay to the order of <u>Katinger Family Trust</u> a <u>Revocable Trust</u> individual/company, or its assigns (collectively, the "Noteholder"), in lawful money of the United States of America, and in immediately payable funds, the principal sum of $50,000 (the "Obligation"). The principal amount loaned by Noteholder to the Company shall accrue interest thereon from the date of this Note. Interest shall be paid according to Section 2 below and all amounts due under this Note shall be paid upon the Maturity Date set forth in Section 3 below. The Company has the right to assign this Note upon written notice to the Noteholder. (The Noteholder and the Company may be referred to individually as a "Party" and collectively as the "Parties" in this Note.)

2. <u>Interest</u>. The principal amount of this Note that may be outstanding from time to time shall bear interest at a rate equal to 18% per annum. Interest, if any, shall be computed hereunder based on a 365-day year and paid for the actual number of days elapsed for any whole or partial month in which principal is outstanding, which interest shall then be due and payable on the Maturity Date.

3. <u>Payment Terms</u>. The principal and interest of this Note shall be due and payable to the Noteholder nine months from the date of this Note (the "Maturity Date") unless all principal and interest due under this Note have been prepaid pursuant to Section 4 herein or converted pursuant to Section 5 herein. Payments are to be made to the Noteholder at its address stated in the Subscription Agreement (or such other address as is designated by the Noteholder) in lawful money of the United States of America. Unless otherwise specified, payments received by the Noteholder pursuant to the terms hereof shall be applied, first, to the payment of all expenses, charges, late payment fees, costs, and fees incurred by or payable to the Noteholder and for which the Company is obligated pursuant to the terms of this Note; second, to the payment of interest; and third, to the payment of principal.

4. <u>Prepayment</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1. <u>Prepayment</u>. The Company shall have the right to prepay all or any portion of the Loan outstanding at any time; provided, however, in the event of a prepayment, the Company shall pay 120% of the Principal Balance plus accrued and unpaid interest on the original Principal Balance of the Note. The Company shall deliver a notice of prepayment to Noteholder, which notice shall specify a prepayment date not less than 15 nor more than 30 days from the date of such notice (the "Prepayment Date"); provided, however, that the Investor will continue to have the right to convert the Note until the close of business of the fifth business day prior to the Prepayment Date.

5. <u>Conversion</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 <u>Conversion Price</u>. The outstanding principal balance of this Note, together with all accrued and unpaid interest thereon (collectively, the "Conversion Amount"), may, at any time prior to the Maturity Date, be converted, at the option of the Company, into fully paid and non-assessable shares of the Company's common stock at the Conversion Price. For purposes hereof, the "Conversion Price" shall mean **$1.00 per share of common stock**, subject to adjustment as may be expressly provided elsewhere in this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 <u>Voluntary Conversion</u>. This Note is convertible at the option of the Noteholder, in Noteholder's sole discretion, in whole or in part, at any time prior to the Maturity Date or payment in full of the Note, whichever occurs first, for all or any portion of principal or interest, into shares of Common Stock of the Company at the Conversion Price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 <u>Mechanics of Conversion</u>. To effectuate a Voluntary Conversion, the Noteholder shall deliver to the Company a written Election to Convert, a form of which is attached hereto. Immediately upon receipt of the written Election to Convert, the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Noteholder, and in such name or names as the Noteholder may designate, a certificate or other documentary evidence for the full number of shares of common stock ("Common Shares") so purchased upon conversion of the Note. Such certificate or documentary evidence shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of such securities as of the date of delivery of the Election to Convert, notwithstanding that the certificate or documentary evidence representing such securities shall not actually have been delivered or that the stock transfer books of the Company shall then be closed. The Note shall be convertible, at the election of the Noteholder, either in full or from time to time in part and, in the event that the Note is converted in respect of less than all of the Common Shares specified therein at any time prior to the Maturity Date, a new Note evidencing the remaining portion of the indebtedness shall be issued by the Company to the Noteholder.

6. <u>Representations, Warranties, and Covenants of the Company</u>. In connection with the transactions provided for herein, the Company hereby represents, warrants, and covenants to Noteholder that, as of the date hereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 <u>Organization, Good Standing, and Qualification</u>. The Company is a corporation duly organized and validly existing under the laws of the State of Nevada and has all requisite corporate power and authority to carry on its business as now conducted. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on its business or properties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 <u>Authorization</u>. All corporate action has been taken on the part of the Company, its officers, and directors necessary for the authorization, execution, and delivery of this Note. Except as may be limited by applicable bankruptcy, insolvency, reorganization, or similar laws relating to or affecting the enforcement of creditors' rights, the Company has taken all corporate action required to make all of the obligations of the Company reflected in the provisions of this Note the valid and enforceable obligations they purport to be.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 <u>Compliance with Other Instruments</u>. The Company is not in violation of or in default under its Articles of Incorporation, as amended to date, or in any material respect of any term or provision of any loan, promissory note, mortgage, indebtedness, indenture, contract, agreement, instrument, judgment, order, or decree to which it is party or by which it is bound. The Company is not in violation of any federal or state statute, rule, or regulation applicable to the Company. The execution and delivery of this Note by the Company, the performance by the Company of its obligations pursuant to this Notes, and the issuance of the Common Shares, will not result in any violation of, or conflict with, or constitute a default under, the Company's Articles of Incorporation, as amended to date, or of any of its agreements material to the Company or its business, nor result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4 <u>Valid Issuance of Common Shares</u>. The Common Shares to be issued, sold, and delivered upon conversion of the Notes will be duly and validly issued, fully paid, and non-assessable and, based in part upon the representations and warranties of the Company in this Note, will be issued in compliance with all applicable federal and state securities laws.

7. <u>Representations and Warranties of Noteholder</u>. In connection with the transactions provided for herein, Noteholder hereby represents and warrants to the Company that, as of the date a Note is issued to such Noteholder:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 <u>Authorization</u>. This Note constitutes such Noteholder's valid and legally binding obligation, enforceable in accordance with its terms, except as may be limited by (a) applicable bankruptcy, insolvency, reorganization, or similar laws relating to or affecting the enforcement of creditors' rights and (b) laws relating to the availability of specific performance, injunctive relief, or other equitable remedies. Such Noteholder represents that it has full power and authority to enter into this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 <u>Purchase Entirely for Own Account</u>. Such Noteholder acknowledges that this Note is made with such Noteholder in reliance upon such Noteholder's representation to the Company that this Note and the Common Shares (collectively, the "Securities") will be acquired for investment for such Noteholder's own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that such Noteholder has no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Note, such Noteholder further represents that such Noteholder does not have any contract, undertaking, agreement, or arrangement with any person to sell, transfer, or grant participations to such person or to any third person with respect to the Securities. Notwithstanding the foregoing, such Noteholder shall have the right to transfer the Securities, all or in part, to any affiliate of Noteholder. Any such transferees shall execute and deliver appropriate documentation providing that the transferee agrees to be bound by the applicable provisions hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 <u>Disclosure of Information</u>. Such Noteholder acknowledges that they have received all the information they consider necessary or appropriate for deciding whether to acquire the Securities. Such Noteholder further represents that they have had an opportunity to ask questions and receive answers from the Company regarding the Company and this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4 <u>Investment Experience</u>. Such Noteholder is an investor in securities of companies in the development stage and acknowledges that they able to fend for themselves; can bear the economic risk of this investment; and has such knowledge and experience in financial or business matters that he, she, or it is capable of evaluating the merits and risks of an investment in the Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5 <u>Restricted Securities</u>. Noteholder understands that the Securities are characterized as "restricted securities" under the federal securities laws since they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the Securities Act, only in certain limited circumstances. Such Noteholder represents that it is familiar with SEC Rule 144, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.6 <u>Legends</u>. It is understood that the Securities may bear the following legend:

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE."

8. <u>Default</u>. The occurrence of any one of the following events shall constitute an Event of Default:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The non-payment, when due, of any principal or interest pursuant to this Note, regardless of whether the Company has received notice of such non-payment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The material breach of any representation or warranty in this Note. In the event the Noteholder becomes aware of a breach of this Section, the Noteholder shall notify the Company in writing of such breach and the Company shall have ten days' notice to effect a cure of such breach;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The material breach of any covenant or undertaking in this Note, not otherwise provided for in this Section. In the event the Noteholder becomes aware of a breach of this Section, the Noteholder shall notify the Company in writing of such breach and the Company shall have ten days' notice to effect a cure of such breach;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) A default shall occur in the payment when due (subject to any applicable grace period), whether by acceleration or otherwise, of any indebtedness of the Company or an event of default or similar event shall occur with respect to such indebtedness, if the effect of such default or event (subject to any required notice and any applicable grace period) would be to accelerate the maturity of any such indebtedness or to permit the holder or holders of such indebtedness to cause such indebtedness to become due and payable prior to its express maturity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The commencement by the Company of any voluntary proceeding under any bankruptcy, reorganization, arrangement, insolvency, readjustment or debt, receivership, dissolution, or liquidation law or statute or any jurisdiction, whether now or hereafter in effect; or the adjudication of the Company as insolvent or bankrupt by a decree of a court of competent jurisdiction; or the petition or application by the Company for, acquiescence in, or consent by the Company to, the appointment of any receiver or trustee for the Company or for all or a substantial part of the property of the Company; or the assignment by the Company for the benefit of creditors; or the written admission of the Company of its inability to pay its debts as they mature; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The commencement against the Company of any proceeding relating to the Company under any bankruptcy, reorganization, arrangement, insolvency, adjustment of debt, receivership, dissolution or liquidation law or statute or any jurisdiction, whether now or hereafter in effect, provided, however, that the commencement of such a proceeding shall not constitute an Event of Default unless the Company consents to the same or admits in writing the material allegations of same, or said proceeding shall remain undismissed for 30 days; or the issuance of any order, judgment, or decree for the appointment of a receiver or trustee for the Company or for all or a substantial part of the property of the Company, which order, judgment, or decree remains undismissed for 30 days; or a warrant of attachment, execution, or similar process shall be issued against any substantial part of the property of the Company.

Upon the occurrence of any Event of Default, the Noteholder may, by written notice to the Company, declare all or any portion of the unpaid principal amount due to Noteholder, together with all accrued interest thereon, immediately due and payable. The Noteholder may also proceed against any guarantor of this obligation without waiving any rights under the terms of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Notice</u>. Any notice, request, instruction, or other document required by the terms of this Note, or deemed by any of the Parties hereto to be desirable, to be given to any other Party hereto shall be in writing and shall be given by personal delivery, overnight delivery, mailed by registered or certified mail, postage prepaid, with return receipt requested, or sent by electronic transmission to the addresses of the Parties set forth in the Subscription Agreement. The persons and addresses set forth in the Notice provision of the Subscription Agreement may be changed from time to time by a notice sent as aforesaid. If notice is given by mail in accordance with the provisions of this Section, such notice shall be conclusively deemed given upon receipt and delivery or refusal. If notice is given by electronic mail transmission in accordance with the provisions of this Section, such notice shall be conclusively deemed given at the time of delivery if between the hours of 9:00 a.m. and 5:00 p.m. Pacific time on a business day ("business hours") and if not during business hours, at 9:00 a.m. on the next business day following delivery, provided a delivery confirmation is obtained by the sender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>Choice of Law</u>. This Note and the rights of the Parties hereunder shall be governed by and construed in accordance with the laws of the State of California including all matters of construction, validity, performance, and enforcement and without giving effect to the principles of conflict of laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>Exclusive Jurisdiction and Venue</u>. The Parties agree that the state and federal courts in the County of Orange, State of California shall have sole and exclusive jurisdiction and venue for the resolution of all disputes arising under the terms of this Note and the transactions contemplated herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u>Attorneys' Fees</u>. In the event the Noteholder or any assignee thereof shall refer this Note to an attorney for collection, the Company agrees to pay all the costs and expenses incurred in attempting or effecting collection hereunder, including reasonable attorney's fees, whether or not suit is instituted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. <u>Conformity with Law</u>. It is the intention of the Company and of the Noteholder to conform strictly to applicable usury and similar laws. Accordingly, notwithstanding anything to the contrary in this Note, it is agreed that the aggregate of all charges which constitute interest under applicable usury and similar laws that are contract for, chargeable or receivable under or in respect of this Note, shall under no circumstances exceed the maximum amount of interest permitted by such laws, and any excess, whether occasioned by acceleration or maturity of this Note or otherwise, shall be canceled automatically, and if theretofore paid, shall be either refunded to the Company or credited on the principal amount of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. <u>Severability</u>. Every provision of this Note is intended to be severable. In the event any term or provision hereof is declared by a court of competent jurisdiction, to be illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the balance of the terms and provisions hereof, which terms and provisions shall remain binding and enforceable.

**[SIGNATURE PAGE FOLLOWS]**

**IN WITNESS WHEREOF**, the Company has signed and sealed this Note and delivered it as of the date first set forth above.

---

| | |
|:---|:---|
| **COMPANY:** | **COMPANY:** |
| **ALTERNATIVE BALLISTICS CORPORATION** | **ALTERNATIVE BALLISTICS CORPORATION** |
| a Nevada corporation | a Nevada corporation |
| */s/ Steven Luna* | */s/ Steven Luna* |
| By: | Steven Luna |
| Its: | Chief Executive Officer |

---

---

| | |
|:---|:---|
| **ACKNOWLEDGED AND AGREED:** | **ACKNOWLEDGED AND AGREED:** |
| Katinger Family Trust | Katinger Family Trust |
| */s/ Ronald Katinger* | */s/ Ronald Katinger* |
| By: | Ronald Katinger |
| Its: | Grantor |

---

**FORM OF ELECTION TO CONVERT**

The undersigned, the holder(s) of the attached Note, hereby irrevocably elects to exercise the right to convert $_____________ of the Note into shares of Common Stock of Alternative Ballistics Corporation and request that the certificates for such securities be issued in the name of, and delivered to, __________________________________________________.

---

| | |
|:---|:---|
| Dated: | 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> (Signature must conform in all respects to name |
|  | of Noteholder as specified in the Note) |
|  | (Insert Social Security or Federal Tax I.D. |
|  | Number of Noteholder) |
|  | IF NOTE IS HELD JOINTLY, BOTH PARTIES MUST SIGN: |
|  | (Signature must conform in all respects to name |
|  | of Noteholder as specified in the Note) |
|  | (Insert Social Security or Federal Tax I.D. |
|  | Number of Joint Noteholder) |

---

**THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE.**

This Warrant Agreement (this "Warrant") has been issued pursuant to a Subscription Agreement dated February 2, 2026 (the "Subscription Agreement") between the Company and the holder of this Warrant (the "Holder"). Capitalized terms not otherwise defined herein shall have the meaning set forth in the Subscription Agreement, the provisions of which are incorporated herein by reference.

**ALTERNATIVE BALLISTICS CORPORATION**

**a Nevada Corporation**

**WARRANT AGREEMENT**

**To Purchase Shares of Common Stock**

Issue Date: February 2, 2026

THIS CERTIFIES that, for value received, <u>Katinger Family Trust</u> , a <u>Revocable Trust</u> individual/company, or its assigns (the "Holder"), is entitled, upon the terms and subject to the conditions hereinafter set forth, at any time on or after the date hereof, to subscribe for and purchase from, ALTERNATIVE BALLISTICS CORPORATION, a Nevada corporation (the "Company"), certain fully paid, non-assessable shares of the Company's common stock, par value $0.001 ("Common Stock") set forth in Section 1 below at the Exercise Price (defined below), provided that such right will terminate, if not terminated earlier in accordance with the provisions hereof, at 5:00 p.m. (Pacific time) on the five year anniversary of the Issue Date (the "Expiration Date"). The purchase price and the number of shares for which this warrant (each a "Warrant," and collectively, the "Warrants") is exercisable are subject to adjustment, as provided herein.

As used herein the following terms, unless the context otherwise requires, have the following respective meanings:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The term "Company" shall include Alternative Ballistics Corporation and any entity which shall succeed or assume the obligations of Alternative Ballistics Corporation hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The term "Warrant Shares" includes (i) the Company's common stock and (ii) any other securities into which or for which any of the Common Stock may be converted or exchanged pursuant to a plan of recapitalization, reorganization, merger, sale of assets or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The term "Other Securities" refers to any stock (other than Common Stock) and other securities of the Company or any other person (corporate or otherwise) which the holder of the Warrant at any time shall be entitled to receive, or shall have received, on the exercise of the Warrant, in lieu of or in addition to Common Stock, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The term "Exercise Price" shall be $1.00 one dollar.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The "Note" refers to that certain Promissory Note dated on even date herewith issued to the Holder pursuant to the above-referenced Subscription Agreement.

1. <u>Number of Shares Issuable upon Exercise</u>.

Unless sooner terminated in accordance herewith, from and after the date hereof through and including the Expiration Date, the Holder shall be entitled to receive up to fifty thousand (50,000) Warrant Shares, upon exercise of this Warrant in whole or in part, by delivery of an original or fax copy of the exercise notice attached hereto as A<u>nnex A</u> (the "Notice of Exercise") along with payment to the Company of the Exercise Price.

2. <u>Exercise of Warrant</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The purchase rights represented by this Warrant are exercisable by the registered Holder hereof, in whole at any time or in part from time to time by delivery of the Notice of Exercise duly completed and delivered to the office of the Company, and upon payment of the Exercise Price of the shares thereby purchased (in the manner provided in Section 2(d) hereof); whereupon the Holder of this Warrant shall be entitled to receive a certificate for the number of Warrant Shares so purchased; provided that the Company will place on each certificate a legend substantially the same as that appearing on this Warrant, in addition to any legend required by any applicable state or federal law. If this Warrant is exercised in part, the Company will issue to the Holder hereof a new Warrant upon the same terms as this Warrant but for the balance of Warrant Shares for which this Warrant remains exercisable. The Company agrees that upon exercise of this Warrant the Holder shall be deemed to be the record owner of the Warrant Shares issued upon exercise as of the close of business on the date on which this Warrant shall have been exercised as aforesaid. This Warrant will be surrendered at the time of exercise or if lost, stolen, misplaced, or destroyed, the Holder will comply with Section 11 below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Certificates for Warrant Shares purchased hereunder shall be delivered to the Holder hereof within a reasonable time after the date on which this Warrant shall have been exercised as aforesaid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Company covenants that all Warrant Shares which may be issued upon the exercise of rights represented by this Warrant will, upon exercise of the rights represented by this Warrant, be fully paid and nonassessable and free from all preemptive rights, taxes, liens, and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue which shall be paid by the Company in accordance with Section 6 below).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) In order to exercise this Warrant with respect to all or any part of the Warrant Shares for which this Warrant is at the time exercisable, Holder (or any other person or persons exercising the Warrant) must take the following actions:

&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) Execute and deliver to the Company a written notice of exercise stating the number of Warrant Shares being purchased (in whole shares only) and such other information set forth on the form of Notice of Exercise attached hereto as Annex A; 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) Pay the aggregate Exercise Price for the Warrant Shares by cash, wire transfer, or check made payable to the order of the Company.

3. <u>Leak Out</u>.

During the Leak Out Period (defined below), the Holder's sale of common stock upon exercise of the Warrants shall be limited to 5% of the daily trading volume of the common stock on the immediately prior Trading Day. "Trading Day" shall mean a day on which Nasdaq or a similar U.S. nationally-recognized stock exchange is open for trading. "Leak Out Period" shall mean 12 months following the exercise of warrants.

4. <u>Mandatory Exercise of Warrants</u>.

At such time, if ever, that the Common Stock is listed on a national securities exchange or quoted in an over-the-counter market, the closing price of the Common Stock equals or exceeds $5.00 per share (which amount may be adjusted for certain capital events, such as stock splits) for ten consecutive trading days (the "Closing Price Measuring Period"), then the Company shall have the right to require the Holder to exercise all or any portion of this Warrant still unexercised, into fully paid, validly issued, and nonassessable shares of Common Stock at the Exercise Price. The Company may exercise its right to require exercise under this Section 4 by delivering within not more than five trading days following the end of such Closing Price Measuring Period a written notice thereof by electronic mail to the Holder (the "Mandatory Exercise Notice"). The Mandatory Exercise Notice shall be irrevocable. Following receipt of the Mandatory Exercise Notice, the Holder will be required to exercise all or any portion of this Warrant still unexercised within 30 calendar days from the date of the Mandatory Exercise Notice (the "Mandatory Exercise Period"). Any unexercised portion of this Warrant on the day immediately following the last day of the Mandatory Exercise Period shall be immediately forfeited.

5. <u>No Fractional Shares</u>.

The Company shall not be required to issue fractional Warrant Shares upon the exercise of this Warrant or to deliver Warrant Certificates which evidence fractional Warrant Shares. In the event that a fraction of a Warrant Share would, except for the provisions of this Section 5, be issuable upon the exercise of this Warrant, the Company shall round the fraction down to the next whole number of the Warrant Share.

6. <u>Charges, Taxes, and Expenses</u>.

Issuance of certificates for Warrant Shares upon the exercise of this Warrant shall be made without charge to the Holder hereof for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder of this Warrant, or in such name or names as may be directed by the Holder of this Warrant; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other than the name of the Holder of this Warrant, the Company may require, as a condition thereto, that the transferee execute an appropriate investment representation as may be reasonably required by the Company.

7. <u>No Rights as Shareholders</u>.

This Warrant does not entitle the Holder hereof to any voting rights or other rights as a Shareholder of the Company prior to the exercise hereof.

8. <u>Securities Law Representations</u>.

Holder represents and warrants to Company as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Holder acknowledges that the Warrant Shares will initially be "restricted securities" (as such term is defined in Rule 144 promulgated under the Act) ("Rule 144") and that the certificates evidencing the Warrant Shares will include this legend:

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE."

Holder further acknowledges that the Warrant Shares cannot be sold unless registered with the United States Securities and Exchange Commission and qualified by appropriate state securities regulators, or unless Holder obtains written consent from Company and otherwise complies with an exemption from such registration and qualification (including, without limitation, compliance with Rule 144).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Holder has adequate means of providing for current needs and contingencies, has no need for liquidity in the investment, and is able to bear the economic risk of an investment in the Warrant and Warrant Shares offered by Company of the size contemplated. Holder represents that Holder is able to bear the economic risk of the investment and at the present time can afford a complete loss of such investment. Holder has had a full opportunity to inspect the books and records of the Company and to make any and all inquiries of Company officers and directors regarding the Company and its business as Holder has deemed appropriate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Holder is an "Accredited Investor" as defined in Regulation D of the Securities Act or Holder, either alone or with Holder's professional advisers who are unaffiliated with, have no equity interest in and are not compensated by Company or any affiliate or selling agent of Company, directly or indirectly, has sufficient knowledge and experience in financial and business matters that Holder is capable of evaluating the merits and risks of an investment in the Warrant and Warrant Shares offered by Company and of making an informed investment decision with respect thereto and has the capacity to protect Holder's own interests in connection with Holder's proposed investment in the Warrant and Warrant Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Holder is acquiring the Warrant and Warrant Shares solely for Holder's own account as principal, for investment purposes only and not with a view to the resale or distribution thereof, in whole or in part, and no other person or entity has a direct or indirect beneficial interest in such Warrant or Warrant Shares.

9. <u>Rule 144 Opinions</u>.

The Company will, at its own expense, provide any and all legal opinions required for the removal of any restrictive legend from any stock certificates representing Warrant Shares under Rule 144. The Company will not unreasonably withhold any legal opinion required for the removal of the restrictive legend from any certificates representing the Warrant Shares pursuant to Rule 144 and will process such request within five business days of receipt of such request.

10. <u>Exchange and Registry of Warrant</u>.

This Warrant is exchangeable, upon the surrender hereof by the registered Holder at the office of the Company, for a new Warrant or Warrants aggregating the total Warrant Shares of the surrendered Warrant of like tenor and dated as of such exchange. The Company shall maintain at its office a registry showing the name and address of the registered Holder of this Warrant. This Warrant may be surrendered for exchange, transfer, or exercise, in accordance with its terms, at such office of the Company, and the Company shall be entitled to rely in all respects, prior to written notice to the contrary, upon such registry.

11. <u>Loss, Theft, Destruction, or Mutilation of Warrant</u>.

Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction, or mutilation of this Warrant, and in case of loss, theft, or destruction, of indemnity reasonably satisfactory to it, and upon reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of this Warrant, if mutilated, the Company will make and deliver a new Warrant of like tenor (but with no additional rights or obligations) and dated as of such cancellation, in lieu of this Warrant.

12. <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 be a Saturday or a Sunday or shall be a legal holiday, then such action may be taken or such right may be exercised on the next succeeding day not a Saturday, Sunday, or legal holiday.

13. <u>Cash Distributions</u>.

If the Company issues cash dividends or interest on the Company's Common Stock or Other Securities that may become purchasable hereunder, the Exercise Price under this Warrant will be adjusted to reflect the diluted value of the Warrant.

14. <u>Consolidation, Merger, or Sale of the Company</u>.

If the Company is a party to a consolidation, merger, or transfer of assets which reclassifies or changes its outstanding Common Stock, the successor corporation (or corporation controlling the successor corporation or the Company, as the case may be) shall by operation of law assume the Company's obligations under this Warrant. Upon consummation of such transaction, the Warrants shall automatically become exercisable for the kind and amount of securities, cash, or other assets which the holder of a Warrant would have owned immediately after the consolidation, merger, or transfer if the holder had exercised the Warrant immediately before the effective date of such transaction. As a condition to the consummation of such transaction, the Company shall arrange for the person or entity obligated to issue securities or deliver cash or other assets upon exercise of the Warrant to, concurrently with the consummation of such transaction, assume the Company's obligations hereunder by executing an instrument so providing and further providing for adjustments which shall be as nearly equivalent as may be practical to the adjustments provided for in this Section 14.

15. <u>Adjustments for Stock Splits, Combinations, etc.</u>

The number of shares and class of capital stock purchasable under this Warrant are subject to adjustment from time to time as set forth in this Section 15.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Adjustment for change in capital stock. If 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;(i) pays a dividend or makes a distribution on its Common Stock, in each case, in shares of its 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) subdivides its outstanding shares of Common Stock into a greater number of shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) combines its outstanding shares of Common Stock into a smaller number of shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) makes a distribution on its Common Stock in shares of its capital stock other than Common Stock; 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;(v) issues by reclassification of its shares of Common Stock any shares of its capital stock;

then the number and classes of shares purchasable upon exercise of each Warrant in effect immediately prior to such action shall be adjusted so that the holder of any Warrant thereafter exercised may receive the number and classes of shares of capital stock of the Company which such holder would have owned immediately following such action if such holder had exercised the Warrant immediately prior to such action.

For a dividend or distribution, the adjustment shall become effective immediately after the record date for the dividend or distribution. For a subdivision, combination, or reclassification, the adjustment shall become effective immediately after the effective date of the subdivision, combination, or reclassification.

If after an adjustment the Holder, upon exercise of a Warrant, may receive shares of two or more classes of capital stock of the Company, the Board of Directors of the Company shall in good faith determine the allocation of the adjusted Exercise Price between or among the classes of capital stock. After such allocation, that portion of the Exercise Price applicable to each share of each such class of capital stock shall thereafter be subject to adjustment on terms comparable to those applicable to Common Stock in this Warrant. Notwithstanding the allocation of the Exercise Price between or among shares of capital stock as provided by this Section 15(a), a Warrant may only be exercised in full by payment of the entire Exercise Price currently in effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company will not, by amendment of its Articles 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 to be observed or performed hereunder by the Company. The Company shall at all times in good faith assist in the carrying out of all the provisions of this Section 15 and take all necessary or appropriate actions to protect the exercise rights of the Holders of this Warrant against impairment, including but not limited to obtaining a written agreement from any successor or acquiring entity to honor this Warrant in full and recognizing the Holder's right to the same terms and conditions in any new entity.

16. <u>Certificate as to Adjustments</u>.

In each case of any adjustment or readjustment in the shares of Common Stock (or Other Securities) issuable on the exercise of the Warrant, the Company at its expense will promptly cause its Chief Financial Officer or other appropriate designee to compute such adjustment or readjustment in accordance with the terms of the Warrant and prepare a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based, including a statement of (a) the consideration received or receivable by the Company for any additional shares of Common Stock (or Other Securities) issued or sold or deemed to have been issued or sold, (b) the number of shares of Common Stock (or Other Securities) outstanding or deemed to be outstanding, and (c) the Exercise Price and the number of shares of Common Stock to be received upon exercise of this Warrant, in effect immediately prior to such adjustment or readjustment and as adjusted or readjusted as provided in this Warrant. The Company will forthwith mail a copy of each such certificate to the Holder of the Warrant and any Warrant agent of the Company.

17. <u>Reservation of Stock Issuable on Exercise of Warrant</u>.

The Company will at all times reserve and keep available, solely for issuance and delivery on the exercise of the Warrant, shares of Common Stock (or Other Securities) from time to time issuable on the exercise of the Warrant.

18. <u>Assignment; Exchange of Warrant</u>.

This Warrant, and the rights evidenced hereby, may not be transferred to any third party other than an affiliate of the Holder without the prior written consent of the Company which may be withheld in the sole and absolute discretion of the Company and compliance with applicable securities laws. As a condition precedent to the Company considering whether to consent to a transfer, the Holder shall deliver to the Company a legal opinion from the Holder's counsel that such transfer is exempt from the registration requirements of applicable securities laws at the Holder's expense. If the Company consents to the proposed transfer (if applicable), upon surrender for exchange of this Warrant, together with evidence reasonably satisfactory to the Company demonstrating compliance with applicable securities laws and payment by the Holder of any applicable transfer taxes, the Company will issue and deliver to or on the order of the Holder a new Warrant of like tenor, in the name of the Holder and/or the transferee(s) specified (each a "Transferee"), calling in the aggregate on the face or faces thereof for the number of Warrant Shares called for on the face or faces of the Warrant so surrendered by the Holder; and provided further, that upon any such transfer, the Company may require, as a condition thereto, that the Transferee execute an appropriate investment representation as may be reasonably required by the Company.

19. <u>Notices</u>.

Any notice, request, instruction, or other document required by the terms of this Note, or deemed by any of the Parties hereto to be desirable, to be given to any other Party hereto shall be in writing and shall be given by personal delivery, overnight delivery, mailed by registered or certified mail, postage prepaid, with return receipt requested, or sent by electronic transmission to the addresses of the Parties set forth in the Subscription Agreement. The persons and addresses set forth in the Notice provision of the Subscription Agreement may be changed from time to time by a notice sent as aforesaid. If notice is given by mail in accordance with the provisions of this Section, such notice shall be conclusively deemed given upon receipt and delivery or refusal. If notice is given by electronic mail transmission in accordance with the provisions of this Section, such notice shall be conclusively deemed given at the time of delivery if between the hours of 9:00 a.m. and 5:00 p.m. Pacific time on a business day ("business hours") and if not during business hours, at 9:00 a.m. on the next business day following delivery, provided a delivery confirmation is obtained by the sender.

20. <u>Notices of Record Date</u>.

In case,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company takes a record of the holders of its Common Stock for the purpose of entitling them to subscribe for or purchase any shares of stock of any class or to receive a dividend, distribution, or any other rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) There is any capital reorganization of the Company, reclassification of the capital stock of the Company (other than a subdivision or combination of its outstanding shares of Common Stock), or consolidation or merger of the Company with or into another corporation which does not constitute a sale of the Company; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) There is a voluntary or involuntary dissolution, liquidation, or winding up of the Company;

then, and in any such case, the Company shall cause to be mailed to the Holder, at least 20 business days prior to the date hereinafter specified, a notice stating the date on which (i) a record is to be taken for the purpose of such dividend, distribution or rights, or (ii) such reclassification, reorganization, consolidation, merger, dissolution, liquidation, or winding up is to take place and the date, if any is to be fixed, as of which holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reclassification, reorganization, consolidation, merger, dissolution, liquidation, or winding up.

21. <u>Amendments and Supplements</u>.

The Company may from time to time supplement or amend this Warrant without the approval of any Holders in order to cure any ambiguity or to correct or supplement any provision contained herein which may be defective or inconsistent with any other provision, or to make any other provisions in regard to matters or questions herein arising hereunder which the Company may deem necessary or desirable and which shall not materially adversely affect the interest of the Holder. All other supplements or amendments to this Warrant must be signed by the party against whom such supplement or amendment is to be enforced.

22. <u>Investment Intent</u>.

Holder represents and warrants to the Company that Holder is acquiring the Warrants for investment and with no present intention of distributing or reselling any of the Warrants.

23. <u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Warrant shall be governed by and construed in accordance with the laws of the State of California without regard to principles of conflicts of laws. The Company and the Holder hereby submit to the exclusive jurisdiction of the Courts of Orange County, State of California for the resolution of all legal disputes arising under the terms of this Warrant. The Company and the Holder agree to waive trial by jury.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If any action or proceeding is brought by the Company on the one hand or by the Holder on the other hand to enforce or continue any provision of this Warrant, the prevailing party's costs and expenses, including its reasonable attorneys' fees, in connection with such action or proceeding shall be paid by the other party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In the event that any provision of this Warrant is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect any of the terms hereof.

**[SIGNATURE PAGE FOLLOWS]**

**IN WITNESS WHEREOF**, the Company has caused this Warrant to be executed by its officers thereunto duly authorized as of the date first written above.

---

| | |
|:---|:---|
| **COMPANY:** | **COMPANY:** |
| **ALTERNATIVE BALLISTICS CORPORATION**, | **ALTERNATIVE BALLISTICS CORPORATION**, |
| a Nevada corporation | a Nevada corporation |
| */s/ Steven Luna* | */s/ Steven Luna* |
| By: | Steven Luna |
| Its: | Chief Executive Officer |

---

---

| | |
|:---|:---|
| **HOLDER:** | **HOLDER:** |
| Katinger Family Trust | Katinger Family Trust |
| /s/ Ronald Katinger | /s/ Ronald Katinger |
| By: | Ronald Katinger |
| Its: | Grantor |

---

**ANNEX A**

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF CERTAIN STATES, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE.

NOTICE OF EXERCISE

The undersigned hereby elects irrevocably to exercise the within Warrant and to purchase shares of Common Stock of Alternative Ballistics Corporation and hereby makes payment of $(at the rate of $________________ per share) in payment of the Exercise Price pursuant hereto. Please issue the shares as to which this Warrant is exercised in accordance with the instructions given below.

INSTRUCTIONS FOR REGISTRATION OF SHARES

Name (print) _______________________________________________________________________________

Address (print) ____________________________________________________________________________

Address (print) ____________________________________________________________________________

ASSIGNMENT

FOR VALUE RECEIVED,______________________________ does hereby sell, assign, and transfer unto _______________________________________, the right to purchase_________________________shares of Common Stock of Alternative Ballistics Corporation, evidenced by the within Warrant, and does hereby irrevocably constitute and appoint _________________________________________attorney to transfer such right on the books of Alternative Ballistics Corporation, with full power of substitution on the premises.

Dated: ___________________, 20___ <br>Signature:  

Notice: The signature of Notice of Exercise or Assignment must correspond with the name as written upon the face of the within Warrant in every particular without alteration or enlargement or any change whatsoever.

**DISCLOSURE DOCUMENT**

Offering Circular on Form 1-A

of

Alternative Ballistics Corporation

dated June 10, 2024

https://www.sec.gov/Archives/edgar/data/1834868/000149315224023306/partiiandiii.htm

## Add

**Exhibit 6.27**

![](ex6-27_001.jpg)

**<u>BUSINESS CONSULTING SERVICES AGREEMENT</u>**

This **BUSINESS CONSULTING SERVICES AGREEMENT** (this "**Agreement**") is made effective as of the date of the final signature below.

**BETWEEN**:

**ALTERNATIVE BALLISTICS CORPORATION,** 

a corporation registered under the laws of the State of Nevada

(the "**Corporation**")

**AND**

**ARIES CAPITAL PARTNERS, LLC,** 

(the "**Consultant**")

**WHEREAS** the Corporation and the Consultant have agreed that the Consultant will provide certain services to the Corporation, as more particularly set out in this Agreement.

**NOW, THEREFORE,** for good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged by the parties) the Corporation and the Consultant hereby agree as follows:

**1.** **Engagement** 

The Corporation hereby appoints the Consultant, as an independent contractor, and the Consultant hereby accepts the appointment, to provide the Services (as defined in Section 2 below) more particularly set out herein in accordance with this Agreement.

**2.** **Services** 

(a) The
 Consultant will provide strategic business development and networking services (the "Services"),
 which may include, but are not limited to: facilitating introductions to the Consultant's
 extensive network of partners, industry contacts, and relevant stakeholders; assisting the
 Corporation in building relationships with law enforcement agencies, private security firms,
 and firearm training or recreational facilities; and supporting product demonstrations, presentations,
 and strategic outreach within the territory of Arizona. The Services are intended to increase
 awareness and recognition of the Corporation and its products, and to provide the Corporation
 with opportunities for engagement, feedback, and potential commercial relationships. All
 Services shall be performed under the direction of, and as further defined by, the Corporation's
 board of directors. It is expressly understood that the Consultant shall not engage in any
 promotional activities, marketing, investor relations, or make any representations regarding
 the Corporation's products or securities, except as specifically authorized in writing
 by the Corporation.

---

| |
|:---|
| 1 **\|** Page |
| Business Consulting Services Agreement<br>Between:<br>Alternative Ballistics Corporation,<br>And<br>Aries Capital Partners, LLC |

---

(b) The
 Parties acknowledge and agree that the Consultant may not subcontract any of its rights and
 duties hereunder.

**3.** **Consultant's Conduct** 

The Consultant covenants and agrees to perform the Services hereunder in an expeditious, ethical, honest, businesslike manner in good faith with a view to the best interests of the Corporation. The Consultant shall comply with all laws, statutes, regulations, statutory rules, principles of common law or equity, orders and terms and conditions of any grant of approval, permission, authority or license of any "**Governmental Authority**" (defined as any multinational, national, federal, provincial, state, regional, municipal, local or other government, governmental or public department, central bank, court, tribunal, arbitral body, commission, board, bureau or agency, domestic or foreign; any subdivision, agent, commission, board or authority of any of the foregoing; any quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing) and/or any stock exchange or other self-regulatory organization applicable to the Corporation's business, undertaking, and property and having jurisdiction over the Corporation's business, undertaking, or property (collectively, "**Applicable Laws**"). Consultant is currently not registered with the Securities and Exchange Commission as a broker or dealer and, therefore, will not make any offers or sales of securities or take any other actions which may require registration as a broker or dealer.

**4.** **Relationship** 

The Consultant will provide the Services as an independent contractor and not as an employee of the Corporation. For certainty:

(a) It
 is understood and agreed by each of the parties that nothing contained in this Agreement
 nor in any acts of the parties hereto shall be deemed to create a partnership or agency or
 joint venture relationship or any relationship between the Corporation and the Consultant
 other than the relationship of business owner and independent contractor.

(b) It
 is anticipated that Consultant shall spend as much time as deemed necessary by the Consultant
 in order to perform the Services. The Corporation understands that this amount of time may
 vary and that Consultant may perform similar Services for other companies.

(c) The
 Consultant agrees that the Corporation shall have no liability or responsibility for the
 withholding, collection, or payment of any taxes, employment insurance premiums, or any government
 pension plan contributions on any amounts paid by the Corporation to the Consultant or amounts
 paid by the Consultant to its employees or contractors, if any. The Consultant also agrees
 to indemnify the Corporation from any and all claims in respect to the Corporation's
 failure to withhold and/or remit any taxes, employment insurance premiums, or pension plan
 contributions.

---

| |
|:---|
| 2 **\|** Page |
| Business Consulting Services Agreement<br>Between:<br>Alternative Ballistics Corporation,<br>And<br>Aries Capital Partners, LLC |

---

(d) Notwithstanding
 anything in this Agreement which is to the contrary, the Consultant shall have no authority
 to and will not (i) exercise or hold itself out as having any authority to enter into or
 conclude any contract or to undertake any commitment or obligation for, in the name of, or
 on behalf of the Corporation, or (ii) act in any manner beyond the scope of this Agreement,
 without first having obtained the approval of the Corporation. The Consultant shall not publish,
 circulate, or otherwise use any materials or documents other than material provided by or
 otherwise approved by the Corporation.

(e) During
 the Term, the Consultant will provide for its own costs; provided, however, subject to the
 pre-approval of the Corporation, the Consultant will be reimbursed for all reasonable out-of-pocket
 costs.

**5.** **Term and Termination** 

(a) The
 term of this Agreement shall begin on the effective date of this Agreement and continue until
 no later from the date which is six months from the date of this Agreement; except that,
 unless earlier terminated per the terms and conditions below (the "**Term** ").

(b) The
 Consultant may terminate this Agreement at any time at its sole discretion upon providing
 to the Corporation 30 calendar days' written notice of Consultant's intention
 to do so. Upon receipt of such notice, the Corporation may waive notice in which event this
 Agreement shall terminate immediately.

(c) The
 Corporation may terminate this Agreement at any time at its sole discretion upon providing
 to the Consultant 30 calendar days' written notice of Corporation's intention
 to do so. Upon receipt of such notice, the Consultant may waive notice in which event this
 Agreement shall terminate immediately.

(d) If
 the Consultant or any of its agents or employees commits any act constituting fraud, misconduct,
 gross negligence, or a wilful breach of Applicable Laws, in each case in connection with
 its performance of the Services hereunder, the Corporation shall have the right to terminate
 this Agreement by giving notice to such effect to the Consultant, which notice shall provide
 the reason for the termination in reasonable detail. Such termination shall be effective
 as of the date of receipt by the Consultant.

(e) In
 the event of termination, all fees fully earned (or fully earned within 30 days of termination)
 and expenses outstanding, shall be due and payable. Sections 4, 8, 10, 16, and 22 shall survive
 termination.

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**6.** **Fees and Expenses** 

(a) The
 Corporation shall pay the Consultant an initial signing payment of 250,000 shares of the
 Corporation's common stock (the "**Shares**") due immediately upon the
 execution of this Agreement.

(b) Except
 as otherwise expressly provided in this Agreement or with the prior approval of the Corporation,
 the Consultant shall not be entitled to any other fees, compensation, reimbursement, or payment
 for the Services performed pursuant to this Agreement.

(c) Shares
 shall be non-refundable once paid and will not be subject to any claw back.

**7.** **Non-Exclusive** 

Consultant shall devote reasonable time to the Services on a non-exclusive basis as determined by Consultant in the exercise of their discretion.

**8.** **Confidentiality** 

(a) The
 Consultant acknowledges that during the course of providing the Services, the Consultant
 will be provided with the Corporation's product and will gain knowledge of, or have
 access to, information relating to the business and affairs of the Corporation, its clients,
 and third parties who may from time-to-time have dealings with the Corporation and its clients
 (such product and information herein collectively, "**Information** "). The
 Information, regardless of the form in which it is recorded, transmitted, observed, or expressed
 or to which it may be converted or transcribed, shall include, without limitation, oral,
 written, and electronically stored or accessible information and data and includes the name
 and identity of all such clients and third parties.

(b) The
 Consultant acknowledges that all Information is strictly confidential and agrees that it
 shall not reveal to any person or entity, or use any Information at any time, except as expressly
 directed by the Corporation, or as may be required by law.

(c) The
 Consultant acknowledges and agrees that the obligation of confidentiality under this Agreement
 shall survive the termination of this Agreement, and the Consultant agrees that it will never
 disclose any Information to any person or entity, except as expressly directed by the Corporation,
 or as may be required by law.

(d) The
 Consultant undertakes and agrees that no information will be distributed, altered, copied,
 interfered with, or destroyed except in accordance with the instructions of the Corporation.

(e) The
 Consultant agrees to use extreme caution with, and take all steps to safeguard, the confidentiality
 of any part of the Information that may come into its possession at any time or in any place,
 and in particular when using any type of electronic device or when performing the Services
 outside of the Corporation's offices *.* 

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(f) If
 it appears that the Consultant has disclosed (or has threatened to disclose) information
 in violation of this Agreement, the Corporation shall be entitled to an injunction, without
 the requirement of a bond, to restrain the Consultant from disclosing the Information in
 whole or in part. The Corporation shall not be prohibited by this provision from pursuing
 other remedies, including a claim for losses and damages.

(g) Upon
 termination of this Agreement, the Consultant shall return all Information (and any copies)
 to the Corporation that are in the Consultants' possession.

(h) The
 Consultant agrees and acknowledges that in the event the Corporation's securities are
 subsequently listed on a national stock exchange or any over-the-counter quotation system
 or trading platform, the information may constitute material non-public information which,
 pursuant to federal securities laws and corresponding state securities laws, would prohibit
 the purchase and sale of the Corporation's securities while such information remains
 material non-public information.

(i) Without
 limiting the generality of the foregoing, information is not confidential if it was already
 in the possession of Consultant through sources other than the Corporation or if the information
 is generally known to or available to the public.

**9.** **Assignment** 

(a) The
 Consultant shall not have the right to assign its rights or interest in or delegate its duties
 or obligations under this Agreement.

(b) The
 Corporation shall not have the right to assign its rights or interest in this Agreement unless
 approved by the Consultant, which approval may be withheld in the Consultant's sole,
 absolute and unfettered discretion. Notwithstanding the foregoing, the Corporation may, on
 14 days' prior Notice to the Consultant, assign its rights or interest under this Agreement
 (in whole or in part) to an affiliate without the Consultant's consent, provided that
 such affiliate shall be jointly and severally bound to the Consultant for all obligations
 of the Corporation and the assignee hereunder.

**10.** **Non-Circumvention** 

(a) The
 Consultant shall not circumvent, or negotiate, complete, or assist in the negotiation or
 completion of any business or other transaction (no matter how remote) relating to the business
 of the Corporation, its products, its contacts, or its clients for the purpose of a contractual
 relationship based, directly or indirectly, on the Information provided by the Corporation.
 Likewise, any transactions, during the Term and for 12 months following termination, set
 in motion by the Consultant in relationship to this Agreement are subject to acceptance in
 writing by the Corporation. The Consultant shall not intentionally undermine transactional
 opportunities in order to evade the provisions of this Agreement; and

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(b) The
 Consultant will not disclose names and addresses, telephone, telefax, email addresses, or
 any other contacts or clients of the Corporation to third parties, and the Consultant recognizes
 such contacts as exclusive property of the Corporation and that the Consultant will not enter
 into direct negotiations or transactions with such contacts revealed by the Corporation.

**11.** **Notices** 

Any notice, direction, certificate, consent, determination or other communication required or permitted to be given or made under this Agreement (a "**Notice**") shall be in writing and shall be effectively given and made if (i) delivered personally, (ii) sent by prepaid courier service or mail, or (iii) sent by fax or other means of recorded electronic communication, including email, in each case to the applicable address set out below, provided that any of the Parties may change the address designated from time to time, by Notice in writing to the other Parties:

(a) to
 the Corporation:

Alternative Ballistics Corporation

5940 South Rainbow Blvd.,

Las Vegas, Nevada 89118

Attn: Steven Luna, CEO

steve@alternativeballistics.com

(b) to
 the Consultant:

Aries Capital Partners, LLC

_______________________

_______________________

Attn: _______________________

_______________________

Any such communication so given or made shall be deemed to have been given or made and to have been received on the day of delivery if delivered, or on the day of faxing or sending by other means of recorded electronic communication, including email, provided that such day in either event is a Business Day (a Business Day means a day, other than a Saturday or Sunday, on which a New York bank, is open for commercial banking business during normal banking hours) and the communication is so delivered, faxed or sent before 5:00 p.m. on such day. Otherwise, such communication shall be deemed to have been given and made and to have been received on the next following Business Day. Any such communication sent by mail shall be deemed to have been given and made and to have been received on the 5<sup>th</sup> Business Day following the mailing thereof; provided, however, that no such communication shall be mailed during any actual or apprehended disruption of postal services. Any email communications shall be sent with a read receipt requested any such communication given or made in any other manner shall be deemed to have been given or made and to have been received only upon actual receipt.

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**12.** **Consultant Representations** 

(a) Consultant
 acknowledges that Consultant has been afforded the opportunity to ask questions of and receive
 answers from duly authorized officers or other representatives of Corporation concerning
 the Corporation, the Securities, and this Agreement;

(b) Consultant
 has had experience in investments in restricted and publicly traded securities, and Consultant
 has had experience in investments in speculative securities and other investments that involve
 the risk of loss of investment. Consultant acknowledges that the Securities received are
 speculative and involves the risk of loss. Consultant has the requisite knowledge to assess
 the relative merits and risks of receiving Securities without the necessity of relying upon
 other advisors, and Consultant can afford the risk of loss of its entire value in the Securities.
 Consultant is an accredited investor, as that term is defined in Regulation D promulgated
 under the Securities Act of 1933, as amended (the "**Securities Act** ").

(c) Consultant
 is acquiring the Securities for its own account for long-term investment and not with a view
 toward resale or distribution thereof, except in accordance with applicable securities laws.

(d) Consultant
 acknowledges that the Securities to be issued pursuant to this Agreement have not been registered
 under the Securities Act and accordingly are "Restricted Securities" within the
 meaning of Rule 144 of the Securities Act ()"**Rule 144** "). As such, the Securities
 may not be publicly resold unless the Securities have been registered under the Securities
 and Exchange Act of 1934, as amended ()"**Exchange Act** "), in a registration
 statement deemed effective by the Securities and Exchange Commission, or Corporation has
 received an opinion of counsel reasonably satisfactory to Corporation that such resale or
 transfer is exempt from the registration requirements of the Exchange Act. For purposes of
 Rule 144's holding period, the Securities shall be deemed to be vested in six equal
 installments during the Term. Corporation agrees to take any and all action(s) reasonably
 necessary to clear the subject Securities of restriction upon presentation of any Rule 144
 application by Consultant or its broker, including, but not limited to: (i) authorizing the
 Corporation's transfer agent to remove the restrictive legend on the subject Securities
 in accordance with the requirements of Rule 144; (ii) accepting a valid legal opinion from
 counsel reasonably satisfactory to Corporation counsel authorizing the removal of the restrictive
 legend in accordance with Rule 144; and (iii) cooperating and communicating with Consultant
 and Consultant's broker and legal counsel to clear the subject Securities of restriction
 as soon as possible after presentation of required documents and information under Rule 144.

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**13.** **No Waiver** 

Any consent or waiver by a party to or of any breach or default by the other party in the performance by such other party of its obligations hereunder must be in writing and no consent or waiver, express or implied, by a party to or of any breach or default by the other party in the performance of such other party of its obligations hereunder shall be deemed or construed to be a consent or waiver to or of any other breach or default.

**14.** **Amendments** 

This Agreement may not be amended, supplemented, or otherwise modified except by written agreement executed by all of the parties hereto.

**15.** **Successors and Assigns** 

All of the terms and provisions of this Agreement shall be binding upon and enforceable by and against the parties hereto and their respective successors and permitted assigns.

**16.** **Indemnity** 

(a) The
 Consultant shall indemnify and hold the Corporation and its affiliates' directors,
 officers, employees, and agents harmless from and against any and all claims that result
 from a breach by Consultant of this Agreement including, but not limited to, any representations,
 warranties, or covenants of the Consultant provided herein or any damages caused to any property
 of the Corporation or her affiliates, or injury to persons caused by any misrepresentations,
 misconduct or negligence of the Consultant. The Corporation shall give Consultant prompt
 written notice of the assertion of any such claim. The Consultant shall assume the defense
 of such claim at her own expense, with counsel of their own choosing (subject to the Corporation's
 reasonable approval), and shall have complete control over the claim, provided that Consultant
 shall not settle the claim without the Corporation's prior written approval, which
 approval shall not be unreasonably withheld. The Corporation shall be entitled to participate
 in any such defense at its own expense with counsel of its own choosing.

(b) The
 Corporation shall indemnify and hold the Consultant harmless from and against any and all
 claims that result from a breach by the Corporation of this Agreement including, but not
 limited to, any representations, warranties, or covenants of the Corporation provided herein
 or any damages caused, or injury to persons caused by the willful misconduct or gross negligence
 of the Corporation. The Consultant shall give the Corporation prompt written notice of the
 assertion of any such claim. The Corporation shall assume the defense of such claim at his
 own expense, with counsel of its own choosing (subject to the Consultant's reasonable
 approval), and shall have complete control over the claim, provided that the Corporation
 shall not settle the claim without the Consultant's prior written approval, which approval
 shall not be unreasonably withheld. The Consultant shall be entitled to participate in any
 such defense at their own expense with counsel of her own choosing.

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**17.** **Further Assurances** 

Each party hereto shall act in good faith in performing its obligations and exercising its rights herein and shall promptly do, make, execute or deliver, or cause to be done, made, executed or delivered, all such further acts, documents, and things as the other party may reasonably require from time to time for the purpose of giving effect to this Agreement and shall use reasonable commercial efforts and take all such steps as may be reasonably within its power to implement to their full extent the provisions of this Agreement.

**18.** **Force Majeure** 

Notwithstanding any other provision of this Agreement, whenever and to the extent that any party to this Agreement shall be unable to fulfill or shall be delayed or restricted in the fulfillment of any obligation (other than the payment of any monies) under any provision of this Agreement by reason of strike, lock-out, war or acts of military authority, terrorism, rebellion or civil commotion, material or labour shortage not within the control of either party, fire or explosion, flood, wind, water, earthquake, pandemic, or other casualty, any event or matter not wholly or mainly within the reasonable control of the party having the obligation, or act of God not caused by the default or act of or omission by such party and not avoidable by the exercise of reasonable effort or foresight by it, then, so long as any such impediment exists, such party shall be relieved from the fulfilment of such obligation and the other party shall not be entitled to compensation for any damage, inconvenience, nuisance or discomfort thereby occasioned and the time for fulfilment of such obligation shall be extended accordingly.

**19.** **Severability** 

If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect, such determination shall not impair or affect the validity, legality, or enforceability of the remaining provisions hereof and each provision is hereby declared to be separate, severable, and distinct.

**20.** **Legal Representation** 

Each of the Corporation and Consultant represents that they have consulted with independent legal counsel and/or tax, financial, and business advisors to the extent that they deemed necessary.

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**21.** **Entire Agreement** 

This Agreement represents the entire agreement between the parties and the provisions of this Agreement shall supersede all prior oral and written commitments, contracts, and understandings with respect to the subject matter of this Agreement. This Agreement may be amended only by mutual written agreement of the party.

**22.** **Governing Law and Principles of Construction** 

This Agreement shall be governed by, and construed in accordance with, the laws of the State of California, without regard to its conflict of laws provisions. Any suit, action, or proceeding arising out of or relating to this Agreement shall be commenced and maintained in any court of competent jurisdiction in the State of California.

**23.** **Counterparts and Electronic Transmission** 

It is agreed by the parties that this Agreement and any amendments thereto (and any other agreements, notices or documents contemplated thereby) may be executed and delivered by facsimile transmission, or other form of electronic recorded transmission (including by email) and in any number of counterparts and all such facsimile or other electronically transmitted copies and counterparts shall be deemed to be an original hereof and for all purposes constitute one agreement, be binding on the parties hereto, provided each party hereto has executed and delivered at least one counterpart to the other(s), and each may be relied upon by each party hereto as such for any and all purposes.

**24.** **Attorneys' Fees** 

In the event any party hereto shall commence legal proceedings against the other to enforce the terms hereof, or to declare rights hereunder, as the result of a breach of any covenant or condition of this Agreement, the prevailing party in any such proceeding shall be entitled to recover from the losing party its costs of suit, including reasonable attorneys' fees, as may be fixed by the court.

**25.** **Exclusive Jurisdiction and Venue** 

The Parties agree that the state and federal courts in the County of Orange, State of California shall have sole and exclusive jurisdiction and venue for the resolution of all disputes arising under the terms of this Agreement and the transactions contemplated herein.

**26.** **Definition of "Days"** 

When used herein, the term "days" refers to calendar days unless otherwise specified.

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**IN WITNESS WHEREOF**, the parties hereto have executed this Agreement (as applicable, by their duly authorized representatives) effective as of the latest date below.

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| | | |
|:---|:---|:---|
| Date: January 29, 2026 | **ALTERNATIVE BALLISTICS CORPORATION,**<br> a Nevada corporation | **ALTERNATIVE BALLISTICS CORPORATION,**<br> a Nevada corporation |
|  | By: | /s/ Steven Luna |
|  | Name: | Steven Luna |
|  | Title: | Chief Executive Officer |

---

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| | | |
|:---|:---|:---|
|  | **ARIES CAPITAL PARTNERS, LLC** | **ARIES CAPITAL PARTNERS, LLC** |
|  | | /s/ Dana W. Amato |
| Date: January 29, 2026 | Name: | Dana W. Amato |
|  | Title: | CEO and President |

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## Add

**Exhibit 6.28**

**NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH MAY BE THE LEGAL COUNSEL OPINION (AS DEFINED IN THE PURCHASE AGREEMENT)), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144, RULE 144A OR REGULATION S UNDER SAID ACT OR OTHER APPLICABLE EXEMPTION. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.**

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| | |
|:---|:---|
| **Principal Amount: $550,000.00** | **Issue Date: March 13, 2026** |
| **Actual Amount of Purchase Price: $500,000.00** |  |

---

**SECURED PROMISSORY NOTE**

**FOR VALUE RECEIVED**, **ALTERNATIVE BALLISTICS CORPORATION**, a Nevada corporation (hereinafter called the "Borrower" or the "Company") (Trading Symbol: ALBC), hereby promises to pay to the order of **LENDSPARK CORPORATION**, a California corporation, or registered assigns (the "Holder"), in the form of lawful money of the United States of America, the principal sum of $550,000.00 (the "Principal Amount") (subject to adjustment herein), of which $500,000.00 is the actual amount of the purchase price hereof plus an original issue discount in the amount of $50,000.00 (the "OID"), and to pay a one-time interest charge on the Principal Amount hereof at the rate of twelve percent (12%) (the "Interest Rate") (which is equal to $66,000.00 and shall be guaranteed and earned in full as of the date hereof (the "Issue Date")), when such amounts become due and payable, whether at maturity or upon acceleration or otherwise, as further provided herein. The maturity date shall be twelve (12) months from the Issue Date (the "Maturity Date"), and is the date upon which the Principal Amount (which includes the OID) and any accrued and unpaid interest and other fees, shall be due and payable (in addition to all payment obligations under Section 4.16 of this Note).

This Note may not be prepaid or repaid in whole or in part except as otherwise explicitly set forth herein.

Any Principal Amount or interest on this Note which is not paid when due shall bear interest at the rate of the lesser of (i) eighteen percent (18%) per annum and (ii) the maximum amount permitted by law from the due date thereof until the same is paid ("Default Interest"). Interest and Default Interest shall be computed on the basis of a 365-day year and the actual number of days elapsed.

All payments due hereunder (to the extent not converted into shares of common stock, $0.001 par value per share, of the Borrower (the "Common Stock") in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall instead be due on the next succeeding day which is a business day.

Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities Purchase Agreement, dated as of the Issue Date, pursuant to which this Note was originally issued (the "Purchase Agreement"). As used in this Note, the term "business day" shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the city of New York, New York are authorized or required by law or executive order to remain closed. As used herein, the term "Trading Day" means any day that shares of Common Stock are listed for trading or quotation on the Principal Market (as defined in the Purchase Agreement) (the "Principal Market"), provided, however, that if the Common Stock is not then listed or quoted on any Principal Market, then any calendar day.

This Note is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof.

The following terms shall also apply to this Note:

**ARTICLE I. CONVERSION 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;1.1 <u>Conversion Right.</u> The Holder shall have the right, on any calendar day, at any time on or following the Issue Date, to convert all or any portion of the then outstanding and unpaid Principal Amount and interest (including any Default Interest) into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified, at the Conversion Price (as defined below) determined as provided herein (a "Conversion"), by submitting to the Borrower or Borrower's transfer agent a Notice of Conversion (as defined in this Note) by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date (as defined in this Note) prior to 11:59 p.m., New York, New York time; *provided, however*, that notwithstanding anything to the contrary contained herein, the Holder shall not have the right to convert any portion of this Note, pursuant to Section 1 or otherwise, to the extent that after giving effect to such issuance after conversion as set forth on the applicable Notice of Conversion, the Holder (together with the Holder's affiliates (the "Affiliates"), and any other Persons (as defined below) 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 Attribution Parties shall include the number of shares of Common Stock issuable upon conversion of this Note 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) conversion of the remaining, nonconverted portion of this Note beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted 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 1.1, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the "1934 Act") and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Holder is solely responsible for any schedules required to be filed in accordance therewith. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the 1934 Act and the rules and regulations promulgated thereunder. For purposes of this Section 1.1, in determining the number of outstanding shares of Common Stock, the 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 the Holder, the Company shall within two Trading Days 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 Note, 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 at the time of the respective calculation hereunder. "Person" and "Persons" means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and any governmental entity or any department or agency thereof. The limitations contained in this paragraph shall apply to a successor holder of this Note. The number of Conversion Shares (as defined in the Purchase Agreement) (the "Conversion Shares") to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto as <u>Exhibit A</u> (the "Notice of Conversion"), delivered to the Borrower or Borrower's transfer agent by the Holder in accordance with the terms of this Note; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower or Borrower's transfer agent before 11:59 p.m., New York, New York time on such conversion date (the "Conversion Date"). The term "Conversion Amount" means, with respect to any conversion of this Note, the sum of (1) the Principal Amount of this Note to be converted in such conversion <u>plus</u> (2) at the Holder's option, accrued and unpaid interest, if any, on such Principal Amount at the Interest Rate to the Conversion Date, <u>plus</u> (3) at the Holder's option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.2 <u>Conversion Price.</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;(a) <u>Calculation of Conversion Price.</u> The per share conversion price into which Principal Amount and interest (including any Default Interest) under this Note shall be convertible into shares of Common Stock hereunder as further described in this Note (the "Conversion Price") shall equal the Market Price (as defined in this Note), subject to adjustment as provided in this Note. "Market Price" shall mean 65% of the lowest traded price of the Common Stock on the Principal Market during the ten (10) Trading Day period immediately preceding the respective Conversion Date. If at any time the Conversion Price as determined hereunder for any conversion would be less than the par value of the Common Stock, then at the sole discretion of the Holder, the Conversion Price hereunder may equal such par value for such conversion and the Conversion Amount for such conversion may be increased to include Additional Principal, where "Additional Principal" means such additional amount to be added to the Conversion Amount to the extent necessary to cause the number of conversion shares issuable upon such conversion to equal the same number of conversion shares as would have been issued had the Conversion Price not been adjusted by the Holder to the par value price. Holder shall be entitled to deduct $1,750.00 from the conversion amount in each Notice of Conversion to cover Holder's fees associated with each Notice of Conversion. All such Conversion Price determinations are to be appropriately adjusted for any stock dividend, stock split, stock combination, rights offerings, reclassification or similar transaction that proportionately decreases or increases the Common Stock. If the Company, at any time while this Note is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock Equivalents, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately before such event, and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to the immediately preceding sentence shall become effective immediately after the record date for the determination of shareholders 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. "Common Stock Equivalents" means any securities of the Company or the Company's Subsidiaries (as defined in the Purchase Agreement) which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Adjustment of Conversion Price</u>. If (i) an Event of Default (as defined in this Note) occurs under this Note or (ii) the Company fails to pay an Amortization Payment (as defined in this Note) when due as provided in Section 4.16 of this Note, then the Conversion Price shall be the lesser of (i) the then applicable Conversion Price under the Note or (ii) the Default Price (as defined in this Note), subject to adjustment as provided in this Note. "Default Price" shall mean 50% of the lowest traded price of the Common Stock on the Principal Market during the ten (10) Trading Day period immediately preceding the respective Conversion Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Voluntary Adjustment By Company</u>. Subject to the rules and regulations of the Principal Market, the Company may at any time while this Note is outstanding, with the prior written consent of the Holder, reduce the then applicable Conversion Price to any amount and for any period of time deemed appropriate by the Board of Directors of the Company. For the avoidance of doubt, the Holder shall not be required to effectuate such conversion in the event of any reduction in Conversion Price 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;1.3 <u>Authorized and Reserved Shares.</u> The Borrower covenants that at all times until the Note is satisfied in full, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of a number of Conversion Shares equal to the greater of: (a) 2,750,000 shares of Common Stock or (b) the sum of (i) the number of Conversion Shares issuable upon the full conversion of this Note (assuming no payment of Principal Amount or interest) at a conversion price equal to the then applicable Conversion Price <u>multiplied by</u> (ii) five (5) (the "Reserved Amount"). The Borrower represents that upon issuance, the Conversion Shares will be duly and validly issued, fully paid and non-assessable. The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Conversion Shares or instructions to have the Conversion Shares issued as contemplated by Section 1.4(f) hereof, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates or cause the Company to electronically issue shares of Common Stock to execute and issue the necessary certificates for the Conversion Shares or cause the Conversion Shares to be issued as contemplated by Section 1.4(f) hereof in accordance with the terms and conditions of this Note.

If, at any time, the Borrower does not maintain the Reserved Amount, it will be considered an Event of Default (as defined in this Note) under this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.4 <u>Method 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;(a) <u>[Intentionally Omitted]</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;(b) <u>Surrender of Note Upon Conversion.</u> Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Borrower unless the entire unpaid Principal Amount is so converted. The Holder and the Borrower shall maintain records showing the Principal Amount so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Borrower, so as not to require physical surrender of this Note upon each such conversion. In the event of any dispute or discrepancy, such records of the Holder shall, *prima facie,* be controlling and determinative in the absence of manifest error. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted Principal Amount of this Note represented by this Note may be less than the amount stated on the face 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Payment of Taxes</u>. The Borrower shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock or other securities or property on conversion of this Note in a name other than that of the Holder (or in street name), and the Borrower shall not be required to issue or deliver any such shares or other securities or property unless and until the person or persons (other than the Holder or the custodian in whose street name such shares are to be held for the Holder's account) requesting the issuance thereof shall have paid to the Borrower the amount of any such tax or shall have established to the satisfaction of the Borrower that such tax has been paid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Delivery of Common Stock Upon Conversion</u>. Upon receipt by the Borrower or Borrower's transfer agent from the Holder of a facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section 1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the Conversion Shares (or cause the electronic delivery of the Conversion Shares as contemplated by Section 1.4(f) hereof) within one (1) Trading Day after such receipt (the "Deadline") (and, solely in the case of conversion of the entire unpaid Principal Amount and interest (including any Default Interest) under this Note, surrender of this Note). If the Company shall fail for any reason or for no reason to issue to the Holder on or prior to the Deadline a certificate for the number of Conversion Shares or to which the Holder is entitled hereunder and register such Conversion Shares on the Company's share register or to credit the Holder's balance account with DTC (as defined below) for such number of Conversion Shares to which the Holder is entitled upon the Holder's conversion of this Note (a "Conversion Failure"), then, in addition to all other remedies available to the Holder, (i) the Company shall pay in cash to the Holder on each day after the Deadline and during such Conversion Failure an amount equal to 2.0% of the product of (A) the sum of the number of Conversion Shares not issued to the Holder on or prior to the Deadline and to which the Holder is entitled and (B) the closing sale price of the Common Stock on the Trading Day immediately preceding the last possible date which the Company could have issued such Conversion Shares to the Holder without violating this Section 1.4(d); and (ii) the Holder, upon written notice to the Company, may void all or any portion of such Notice of Conversion; provided that the voiding of all or any portion of a Notice of Conversion shall not affect the Company's obligations to make any payments which have accrued prior to the date of such notice. In addition to the foregoing, if on or prior to the Deadline the Company shall fail to issue and deliver a certificate to the Holder and register such Conversion Shares on the Company's share register or credit the Holder's balance account with DTC for the number of Conversion Shares to which the Holder is entitled upon the Holder's exercise hereunder or pursuant to the Company's obligation pursuant to clause (ii) below, and if on or after such Trading Day the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stock issuable upon such exercise that the Holder anticipated receiving from the Company, then the Company shall, within two (2) Trading Days after the Holder's request and in the Holder's discretion, either (i) pay cash to the Holder in an amount equal to the Holder's total purchase price (including brokerage commissions and other reasonable and customary out-of-pocket expenses, if any) for the shares of Common Stock so purchased (the "Buy-In Price"), at which point the Company's obligation to deliver such certificate (and to issue such Conversion Shares) or credit such Holder's balance account with DTC for such Conversion Shares shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing such Conversion Shares or credit such Holder's balance account with DTC and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) the closing sales price of the Common Stock on the date of exercise. Nothing shall limit the 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 certificates representing the Conversion Shares (or to electronically deliver such Conversion Shares) upon the conversion of this Note as required pursuant to the terms 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Obligation of Borrower to Deliver Common Stock.</u> At the time that the Holder submits the Notice of Conversion to the Borrower or Borrower's transfer agent, the Holder shall be deemed to be the holder of record of the Conversion Shares issuable upon such conversion, the outstanding Principal Amount and the amount of accrued and unpaid interest (including any Default Interest) under this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations under this Article I, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower's obligation to issue and deliver the certificates for the Conversion Shares (or cause the electronic delivery of the Conversion Shares as contemplated by Section 1.4(f) hereof) shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is sent to the Borrower or Borrower's transfer agent before 11:59 p.m., New York, New York time, on such date. Notwithstanding anything herein to the contrary, the Holder shall have the right to rescind any Notice of Conversion prior to the Borrower's electronic delivery of such Conversion Shares to the Holder's designated brokerage account pursuant to the instructions specified in the respective Notice of Conversion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Delivery of Conversion Shares by Electronic Transfer</u>. In lieu of delivering physical certificates representing the Conversion Shares issuable upon conversion hereof, provided the Borrower is participating in the Depository Trust Company ("DTC") Fast Automated Securities Transfer or Deposit/Withdrawal at Custodian programs, upon request of the Holder and its compliance with the provisions contained in Section 1.1 and in this Section 1.4, the Borrower shall use its best efforts to cause its transfer agent to electronically transmit the Conversion Shares issuable upon conversion hereof to the Holder by crediting the account of Holder's Prime Broker with DTC through its Deposit Withdrawal Agent Commission 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;1.5 <u>Concerning the Shares</u>. The Conversion Shares issuable upon conversion of this Note may not be sold or transferred unless (i) such shares are sold pursuant to an effective registration statement under the 1933 Act or (ii) the Borrower or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be the Legal Counsel Opinion (as defined in the Purchase Agreement)) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration or (iii) such shares are sold or transferred pursuant to Rule 144, Rule 144A, Regulation S, or other applicable exemption, or (iv) such shares are transferred to an "affiliate" (as defined in Rule 144) of the Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who is an Accredited Investor (as defined in the Purchase Agreement). Except as otherwise provided in the Purchase Agreement (and subject to the removal provisions set forth below), until such time as the Conversion Shares have been registered under the 1933 Act or otherwise may be sold pursuant to Rule 144, Rule 144A, Regulation S, or other applicable exemption without any restriction as to the number of securities as of a particular date that can then be immediately sold, each certificate for the Conversion Shares that has not been so included in an effective registration statement or that has not been sold pursuant to an effective registration statement or an exemption that permits removal of the legend, shall bear a legend substantially in the following form, as appropriate:

**"NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH MAY BE THE LEGAL COUNSEL OPINION (AS DEFINED IN THE PURCHASE AGREEMENT)), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144, RULE 144A, REGULATION S UNDER SAID ACT, OR OTHER APPLICABLE EXEMPTION. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES."**

The legend set forth above shall be removed and the Company shall issue to the Holder a certificate for the applicable Conversion Shares without such legend upon which it is stamped or (as requested by the Holder) issue the applicable Conversion Shares by electronic delivery by crediting the account of such holder's broker with DTC, if, unless otherwise required by applicable state securities laws: (a) such Conversion Shares are registered for sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144, Rule 144A, Regulation S, or other applicable exemption without any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) the Company or the Holder provides the Legal Counsel Opinion (as contemplated by and in accordance with Section 4(l) of the Purchase Agreement) to the effect that a public sale or transfer of such Conversion Shares may be made without registration under the 1933 Act, which opinion shall be accepted by the Company so that the sale or transfer is effected. The Company shall be responsible for the fees of its transfer agent and all DTC fees associated with any such issuance. The Holder agrees to sell all Conversion Shares, including those represented by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any. In the event that the Company does not accept the opinion of counsel provided by the Holder with respect to the transfer of Conversion Shares pursuant to an exemption from registration, such as Rule 144, Rule 144A, Regulation S, or other applicable exemption, at the Deadline, notwithstanding that the conditions of Rule 144, Rule 144A, Regulation S, or other applicable exemption, as applicable, have been met, it will be considered an Event of Default under this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.6 <u>Effect of Certain Events.</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;(a) <u>Effect of Merger, Consolidation, Etc</u>. At the option of the Holder, the sale, conveyance or disposition of all or substantially all of the assets of the Borrower, or the consolidation, merger or other business combination of the Borrower with or into any other Person (as defined below) or Persons when the Borrower is not the survivor shall either: (i) be deemed to be an Event of Default pursuant to which the Borrower shall be required to pay to the Holder upon the consummation of and as a condition to such transaction an amount equal to the Default Amount (as defined in this Note) or (ii) be treated pursuant to Section 1.6(b) hereof. "Person" shall mean any individual, corporation, limited liability company, partnership, association, trust or other entity or organization.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Adjustment Due to Merger, Consolidation, Etc</u>. If, at any time when this Note is issued and outstanding and prior to conversion of all of this Note, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different number of shares of another class or classes of stock or securities of the Borrower or another entity, or in case of any sale or conveyance of all or substantially all of the assets of the Borrower other than in connection with a plan of complete liquidation of the Borrower, then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which the Holder would have been entitled to receive in such transaction had this Note been converted in full immediately prior to such transaction (without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions shall be made with respect to the rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation, provisions for adjustment of the Conversion Price and of the number of shares issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon the conversion hereof. The Borrower shall not effectuate any transaction described in this Section 1.6(b) unless (a) it first gives, to the extent practicable, at least thirty (30) days prior written notice (but in any event at least fifteen (15) days prior written notice) of the record date of the special meeting of shareholders to approve, or if there is no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b) the resulting successor or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Section 1.6(b). The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Adjustment Due to Distribution.</u> If the Borrower shall declare or make any distribution of its assets (or rights to acquire its assets) to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend or distribution to the Borrower's shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary (i.e., a spin-off)) (a "Distribution"), then the Holder of this Note shall be entitled, upon any conversion of this Note after the date of record for determining shareholders entitled to such Distribution, to receive the amount of such assets which would have been payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had such Holder been the holder of such shares of Common Stock on the record date for the determination of shareholders entitled to 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Purchase Rights.</u> If, at any time when all or any portion of this Note is issued and outstanding, the Borrower issues any convertible securities or rights to purchase stock, warrants, securities or other property (the "Purchase Rights") pro rata to the record holders of any class of Common Stock, then the Holder of this Note will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such Holder could have acquired if such Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without regard to any limitations on conversion contained herein) 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 Common Stock are to be determined for the grant, issue or sale of such Purchase 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Dilutive Issuance</u>. If the Borrower, at any time while this Note or any amounts due hereunder are outstanding, issues, sells or grants (or has issued, sold or granted as of the Issue Date, as the case may be) any option to purchase, or sells or grants any right to reprice, or otherwise disposes of, or issues (or has sold or issued, as the case may be, or announces any sale, grant or any option to purchase or other disposition), any Common Stock or other securities convertible into, exercisable for, or otherwise entitle any person or entity the right to acquire, shares of Common Stock (including, without limitation, upon conversion of this Note, and any convertible notes or warrants outstanding as of or following the Issue Date), in each or any case at an effective price per share that is lower than the then Conversion Price (such lower price, the "Base Conversion Price" and such issuances, collectively, a "Dilutive Issuance") (it being agreed that if the holder of the Common Stock or other securities so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share that is lower than the Conversion Price, such issuance shall be deemed to have occurred for less than the Conversion Price on such date of the Dilutive Issuance), then the Conversion Price shall be reduced, at the option of the Holder, to a price equal to the Base Conversion Price. Such adjustment shall be made whenever such Common Stock or other securities are issued. By way of example, and for the avoidance of doubt, if the Company issues a convertible promissory note (including but not limited to a Variable Rate Transaction (as defined in the Purchase Agreement)), and the holder of such convertible promissory note has the right to convert it into Common Stock at an effective price per share that is lower than the then Conversion Price (including but not limited to a conversion price with a discount that varies with the trading prices of or quotations for the Common Stock), then the Holder has the right to reduce the Conversion Price to such Base Conversion Price (including but not limited to a conversion price with a discount that varies with the trading prices of or quotations for the Common Stock) in perpetuity regardless of whether the holder of such convertible promissory note ever effectuated a conversion at the Base Conversion Price. In the event of an issuance of securities involving multiple tranches or closings, any adjustment pursuant to this Section 1.6(e) shall be calculated as if all such securities were issued at the initial closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Notice of Adjustments.</u> Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the events described in Section 1.6 of this Note, the Borrower shall, at its expense and within one (1) calendar day after the occurrence of each respective adjustment or readjustment of the Conversion Price, compute such adjustment or readjustment and prepare and furnish to the Holder a certificate setting forth (i) the Conversion Price in effect at such time based upon the Dilutive Issuance, (ii) the number of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon conversion of the Note, (iii) the detailed facts upon which such adjustment or readjustment is based, and (iv) copies of the documentation (including but not limited to relevant transaction documents) that evidences the adjustment or readjustment. In addition, the Borrower shall, within one (1) calendar day after each written request from the Holder, furnish to such Holder a like certificate setting forth (i) the Conversion Price in effect at such time based upon the Dilutive Issuance, (ii) the number of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon conversion of the Note, (iii) the detailed facts upon which such adjustment or readjustment is based, and (iv) copies of the documentation (including but not limited to relevant transaction documents) that evidences the adjustment or readjustment. For the avoidance of doubt, each adjustment or readjustment of the Conversion Price as a result of the events described in Section 1.6 of this Note shall occur without any action by the Holder and regardless of whether the Borrower complied with the notification provisions in Section 1.6 of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.7 <u>[Intentionally Omitted]</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;1.8 <u>Status as Shareholder.</u> Upon submission of a Notice of Conversion by the Holder, (i) the Conversion Shares covered thereby shall be deemed converted into shares of Common Stock and (ii) the Holder's rights as the Holder of such converted portion of this Note shall cease and terminate, excepting only the right to receive certificates for such shares of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure by the Borrower to comply with the terms of this Note. Notwithstanding the foregoing, if the Holder has not received certificates for all shares of Common Stock prior to the tenth (10th) business day after the expiration of the Deadline with respect to a conversion of any portion of this Note for any reason, then (unless the Holder otherwise elects to retain its status as a holder of Common Stock by so notifying the Borrower) the Holder shall regain the rights of a Holder of this Note with respect to such unconverted portions of this Note and the Borrower shall, as soon as practicable, return such unconverted Note to the Holder or, if the Note has not been surrendered, adjust its records to reflect that such portion of this Note has not been converted. In all cases, the Holder shall retain all of its rights and remedies for the Borrower's failure to convert this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.9 <u>[Intentionally Omitted]</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;1.10 <u>Repayment from Proceeds</u>. If, at any time prior to the full repayment or full conversion of all amounts owed under this Note, the Company or any of the Company's Subsidiaries receives cash proceeds from any source or series of related or unrelated sources on or after the Issue Date, including but not limited to, the issuance of equity or debt, the incurrence of Indebtedness (as defined in this Note), a merchant cash advance, sale of receivables or similar transaction, the conversion of outstanding warrants of the Company or any of the Company's Subsidiaries, the issuance of securities pursuant to an Equity Line of Credit (as defined in this Note) of the Company, or the sale of assets (including but not limited to real property) by the Company or any of the Company's Subsidiaries, the Company shall, within one (1) business day of Company's or the Subsidiaries' receipt of such proceeds, inform the Holder of or publicly disclose such receipt, following which the Holder shall have the right in its sole discretion to require the Company or the Subsidiaries to immediately apply up to 25% of such proceeds to repay all or any portion of the outstanding Principal Amount and interest (including any Default Interest) then due under this Note. Failure of the Company to comply with this provision shall constitute an Event of Default. "Equity Line of Credit" shall mean any transaction involving a written agreement between the Company and an investor or underwriter whereby the Company has the right to "put" its Common Stock to the investor or underwriter over an agreed period of time and at an agreed price or price formula (such Common Stock must be registered pursuant to a registration statement of the Company for the investor's or underwriter's resale).

**ARTICLE II. RANKING AND CERTAIN COVENANTS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 <u>Ranking and Security</u>. This Note shall be a secured obligation of the Borrower, with priority over all existing and future Indebtedness of the Borrower, as provided in that certain security agreement entered into between the Borrower and the Holder on the Issue Date (the "Security 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;2.2 <u>Other Indebtedness</u>. In addition to all obligations under the Security Agreement, and so long as the Borrower shall have any obligation under this Note, neither the Borrower nor any of the Borrower's Subsidiaries shall (directly or indirectly) incur or suffer to exist or guarantee any Indebtedness that is senior to or pari passu with (in priority of payment and performance) the Borrower's obligations hereunder. "Indebtedness" shall mean all indebtedness, including but not limited to (a) all indebtedness of the Borrower or Subsidiaries for the deferred purchase price of property or services, including any type of letters of credit, (b) all liabilities, obligations and indebtedness for borrowed money including, but not limited to, all obligations of the Borrower or Subsidiaries evidenced by notes, bonds, debentures or other similar instruments, (c) purchase money indebtedness hereafter incurred by the Borrower or Subsidiaries to finance the purchase of fixed or capital assets, including all capital lease obligations of the Borrower which do not exceed the purchase price of the assets funded, (d) all guaranties, endorsements and other contingent obligations in respect of indebtedness of Borrower, Subsidiaries or others, whether or not the same are or should be reflected in the Borrower's or Subsidiaries' consolidated balance sheet (or the notes thereto), (e) all guarantee obligations of the Borrower or Subsidiaries in respect of obligations of the kind referred to in clauses (a) through (d) above that the Borrower or Subsidiaries would not be permitted to incur or enter into, and (f) all obligations of the kind referred to in clauses (a) through (e) above that the Borrower or Subsidiaries is not permitted to incur or enter into that are secured and/or unsecured by (or for which the holder of such obligation has an existing right, contingent or otherwise, to be secured and/or unsecured by) any lien or encumbrance on property (including accounts and contract rights) owned by the Borrower or Subsidiaries, whether or not the Borrower or Subsidiaries has assumed or become liable for the payment of such obligation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 <u>Distributions on Capital Stock.</u> So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the Holder's written consent (a) pay, declare or set apart for such payment, any dividend or other distribution (whether in cash, property or other securities) on shares of capital stock other than dividends on shares of Common Stock solely in the form of additional shares of Common Stock or (b) directly or indirectly or through any subsidiary make any other payment or distribution in respect of its capital stock except for distributions pursuant to any shareholders' rights plan which is approved by a majority of the Borrower's disinterested directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4 <u>Restriction on Stock Repurchases and Debt Repayments.</u> So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the Holder's written consent redeem, repurchase or otherwise acquire (whether for cash or in exchange for property or other securities or otherwise) in any one transaction or series of related transactions any shares of capital stock of the Borrower or any warrants, rights or options to purchase or acquire any such shares, or repay any Indebtedness of Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5 <u>Sale of Assets.</u> So long as the Borrower shall have any obligation under this Note, neither the Borrower nor any of the Borrower's Subsidiaries shall, without the Holder's written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business. Any consent by the Holder to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6 <u>Advances and Loans; Affiliate Transactions.</u> So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder's written consent, lend money, give credit, make advances to or enter into any similar transaction with any person, firm, joint venture or corporation, including, without limitation, officers, directors, employees, subsidiaries and affiliates of the Borrower, except loans, credits or advances (a) in existence or committed on the Issue Date and which the Borrower has informed Holder in writing prior to the Issue Date, (b) in regard to transactions with unaffiliated third parties, made in the ordinary course of business or (c) in regard to transactions with unaffiliated third parties, not in excess of $100,000. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder's written consent, repay any affiliate (as defined in Rule 144) of the Borrower in connection with any indebtedness or accrued amounts owed to any such 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;2.7 <u>Section 3(a)(9) or 3(a)(10) Transaction</u>. So long as this Note is outstanding, the Borrower shall not enter into any transaction or arrangement structured in accordance with, based upon, or related or pursuant to, in whole or in part, either Section 3(a)(9) of the Securities Act (a "3(a)(9) Transaction") or Section 3(a)(10) of the Securities Act (a "3(a)(10) Transaction"). In the event that the Borrower does enter into, or makes any issuance of Common Stock related to a 3(a)(9) Transaction or a 3(a)(10) Transaction while this note is outstanding, a liquidated damages charge of 25% of the outstanding principal balance of this Note, but not less than $25,000, will be assessed and will become immediately due and payable to the Holder at its election in the form of a cash payment or added to the balance of this Note (under Holder's and Borrower's expectation that this amount will tack back to the Issue Date), in addition to all other available remedies at law or in equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.8 <u>Preservation of Business and Existence, etc</u>. Beginning on the Issue Date and continuing for so long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder's written consent, (a) change the nature of its business; (b) sell, divest, change the structure of any material assets other than in the ordinary course of business; or (c) (d) enter into any Prohibited Transaction (as defined in this Note). "Prohibited Transaction" shall mean any merchant cash advance transaction, sale of receivables transaction, or any other similar transaction. In addition, so long as the Borrower shall have any obligation under this Note, the Borrower shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, its existence, rights and privileges, and become or remain, and cause each of its Subsidiaries (other than dormant Subsidiaries that have no or minimum assets) to become or remain, duly qualified and in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.9 <u>Noncircumvention</u>. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate or Articles of Incorporation or Bylaws, or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, 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 Note, and will at all times in good faith carry out all the provisions of this Note and take all action as may be required to protect the rights of the Holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.10 <u>Lost, Stolen or Mutilated Note</u>. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company shall execute and deliver to the Holder a new Note.

**ARTICLE III. EVENTS OF DEFAULT**

It shall be considered an event of default if any of the following events listed in this Article III (each, an "Event of Default") shall occur on or after the 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;3.1 <u>Failure to Pay Principal or Interest.</u> The Borrower fails to pay the Principal Amount hereof or interest thereon when due on this Note, whether at maturity, upon acceleration or otherwise, or fails to fully comply with Section 1.10 of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 <u>Conversion and the Shares.</u> The Borrower (i) fails to issue Conversion Shares to the Holder (or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this Note, (ii) fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form) any certificate for the Conversion Shares issuable to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, (iii) fails to reserve the Reserved Amount at all times, (iv) the Borrower directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate for the Conversion Shares issuable to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, or fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any Conversion Shares issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement, statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue uncured (or any written announcement, statement or threat not to honor its obligations shall not be rescinded in writing) for two (2) Trading Days after the Holder shall have delivered a Notice of Conversion, and/or (v) fails to remain current in its obligations to its transfer agent (including but not limited to payment obligations to its transfer agent). It shall be an Event of Default of this Note, if a conversion of this Note is delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer agent. If at the option of the Holder, the Holder advances any funds to the Borrower's transfer agent in order to process a conversion, such advanced funds shall be added to the principal balance of the Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 <u>Breach of Agreements and Covenants.</u> The Borrower breaches any material covenant, agreement, or other term or condition contained in the Purchase Agreement, Security Agreement, this Note, Warrants (as defined in the Purchase Agreement) (the "Warrants"), Irrevocable Transfer Agent Instructions, or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith or therewith and the Borrower fails to remedy such breach within 15 days after the occurrence of such breach.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4 <u>Breach of Representations and Warranties.</u> Any material representation or warranty of the Borrower made in the Purchase Agreement, Security Agreement, this Note, Warrants, Irrevocable Transfer Agent Instructions, or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith or therewith shall be false or misleading in any material respect when made and the Borrower fails to remedy such breach within 15 days after the occurrence of such breach.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5 <u>Receiver or Trustee.</u> The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.6 <u>Judgments.</u> Any money judgment, writ or similar process shall be entered or filed against the Borrower or any subsidiary of the Borrower or any of its property or other assets for more than $100,000, and shall remain unvacated, unbonded or unstayed for a period of twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.7 <u>Bankruptcy.</u> Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the Borrower and the Borrower fails to remedy such breach within 60 days after the occurrence of such breach.

.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.8 <u>Failure to Comply with the 1934 Act.</u> At any time after the date that is three (3) calendar months after the Issue Date, the Borrower shall fail to comply with the reporting requirements of the 1934 Act and/or the Borrower shall cease to be subject to the reporting requirements of the 1934 Act and the Borrower fails to remedy such breach within 15 days after the occurrence of such breach.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.9 <u>Liquidation.</u> Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its 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;3.10 <u>Cessation of Operations.</u> Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure of the Borrower's ability to continue as a "going concern" shall not be an admission that the Borrower cannot pay its debts as they become 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;3.11 <u>Maintenance of Assets.</u> The failure by Borrower to maintain any material intellectual property rights, personal, real property or other assets which are necessary to conduct its business (whether now or in the future).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.12 <u>Financial Statement Restatement.</u> The restatement of any financial statements filed by the Borrower with the SEC for any date or period from two years prior to the Issue Date of this Note and until this Note is no longer 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;3.13 <u>Replacement of Transfer Agent.</u> In the event that the Borrower proposes to replace its transfer agent, the Borrower fails to provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.14 <u>Cross-Default</u>. The declaration of an event of default by any lender or other extender of credit to the Company under any notes, loans, agreements or other instruments of the Company evidencing any Indebtedness of the Company (including those filed as exhibits to or described in the Company's filings with the SEC), after the passage of all applicable notice and cure or grace 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;3.15 <u>[Intentionally Omitted]</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;3.16 <u>Inside Information</u>. Any attempt by the Borrower or its officers, directors, and/or affiliates to transmit, convey, disclose, or any actual transmittal, conveyance, or disclosure by the Borrower or its officers, directors, and/or affiliates of, material non-public information concerning the Borrower, to the Holder or its successors and assigns, which is not immediately cured by Borrower's filing of a Form 8-K pursuant to Regulation FD on that same 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;3.17 <u>Unavailability of Rule 144</u>. If, at any time on or after the date that is six (6) calendar months after the Issue Date, the Holder is unable to (i) obtain a standard "144 legal opinion letter" from an attorney reasonably acceptable to the Holder, the Holder's brokerage firm (and respective clearing firm), and the Borrower's transfer agent in order to facilitate the Holder's conversion of any portion of the Note into free trading shares of the Borrower's Common Stock pursuant to Rule 144, and/or (ii) thereupon deposit such shares into the Holder's brokerage account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.18 <u>Delisting, Suspension, or Quotation of Trading of Common Stock</u>. If, at any time on or after the Issue Date, the Borrower's Common Stock (i) is suspended from trading, (ii) halted from trading, and/or (iii) fails to be listed on a Principal Market and the Borrower fails to remedy such breach within 15 days after the occurrence of such breach.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.19 <u>Failure to Pay an Amortization Payment</u>. The Borrower fails to pay an Amortization Payment (as defined in this Note) when due as provided in Section 4.16 of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.20 <u>Registration Statement Failures</u>. The Borrower fails to (i) file a registration statement (the "Registration Statement") covering the Holder's resale at prevailing market prices (and not fixed prices) of all of the Conversion Shares under this Note (ignoring any beneficial ownership limitations in this Note) and Exercise Shares (as defined in the Purchase Agreement) (the "Exercise Share") under the Warrants within sixty (60) calendar days following the Issue Date, (ii) cause the Registration Statement to become effective within one hundred twenty (120) calendar days following the Issue Date, (iii) cause the Registration Statement to remain effective until the Holder no longer owns the Note, Conversion Shares, Warrants, or any Exercise Shares, or (iv) immediately amend the Registration Statement or file a new Registration Statement (and cause such Registration Statement to become effective as soon as possible) covering Holder's resale at prevailing market prices (and not fixed prices) of all remaining Conversion Shares under the Note (ignoring all beneficial ownership limitations in this Note) and Exercise Shares under the Warrants (ignoring all beneficial ownership limitations in the Warrants) each time that there are insufficient shares registered under all prior Registration Statements to cover all of the Conversion Shares (ignoring all beneficial ownership limitations in this Note) and Exercise Shares (ignoring all beneficial ownership limitations in the 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;3.21 <u>Rights and Remedies Upon an Event of Default</u>. Upon the occurrence of any Event of Default specified in this Article III, this Note shall become immediately due and payable, and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the Principal Amount then outstanding plus accrued interest (including any Default Interest) through the date of full repayment multiplied by 150% (collectively the "Default Amount"), as well as all costs, including, without limitation, legal fees and expenses, of collection, all without demand, presentment or notice, all of which hereby are expressly waived by the Borrower. Holder may, in Holder's sole discretion, convert all or any portion of this Note (including the Default Amount) into Common Stock pursuant to the terms of this Note (for the avoidance of doubt, this shall apply even if such conversion occurs after the Maturity Date). The Holder shall be entitled to exercise all other rights and remedies available at law or in equity.

**ARTICLE IV. MISCELLANEOUS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 <u>Failure or Indulgence Not Waiver.</u> No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privileges. All rights and remedies of the Holder existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 <u>Notices.</u> All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, e-mail or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by e-mail or facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:

If to the Borrower, to:

**ALTERNATIVE BALLISTICS CORPORATION**

5940 S. Rainbow Blvd.

Las Vegas, NV 89118

Attention: Steven Luna

e-mail: steve@alternativeballistics.com

If to the Holder:

**LENDSPARK CORPORATION**

5451 Avenida Encinitas, Suite B

Carlsbad, CA 92008

Attention: David Clark

E-mail: Dave@Lendspark.com

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 <u>Amendments.</u> This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. The term "Note" and all reference thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 <u>Assignability.</u> This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. The Borrower shall not assign this Note or any rights or obligations hereunder without the prior written consent of the Holder. The Holder may assign its rights hereunder to any "accredited investor" (as defined in Rule 501(a) of the 1933 Act) in a private transaction from the Holder or to any of its "affiliates", as that term is defined under the 1934 Act, without the consent of the Borrower. Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide margin account or other lending arrangement. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note represented by this Note may be less than the amount stated on the face 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;4.5 <u>Cost of Collection.</u> If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs of collection, including reasonable attorneys' 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;4.6 <u>Arbitration of Claims; Governing Law; Venue; Attorney's Fees.</u> The Company and Holder shall submit all Claims (as defined in Exhibit C of the Purchase Agreement) (the "Claims") arising under this Note or any other agreement between the parties and their affiliates or any Claim relating to the relationship of the parties to binding arbitration pursuant to the arbitration provisions set forth in Exhibit C of the Purchase Agreement (the "Arbitration Provisions"). The Company and Holder hereby acknowledge and agree that the Arbitration Provisions are unconditionally binding on the Company and Holder hereto and are severable from all other provisions of this Note. By executing this Note, Company represents, warrants and covenants that Company has reviewed the Arbitration Provisions carefully, consulted with legal counsel about such provisions (or waived its right to do so), understands that the Arbitration Provisions are intended to allow for the expeditious and efficient resolution of any dispute hereunder, agrees to the terms and limitations set forth in the Arbitration Provisions, and that Company will not take a position contrary to the foregoing representations. The Company acknowledges and agrees that Holder may rely upon the foregoing representations and covenants of the Company regarding the Arbitration Provisions. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Note shall be governed by, the internal laws of the State of Nevada, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Nevada or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Nevada. The Company and Holder consent to and expressly agree that the exclusive venue for arbitration of any Claims arising under this Note or any other agreement between the Company and Holder or their respective affiliates (including but not limited to the Transaction Documents (as defined in the Purchase Agreement) (the "Transaction Documents")) or any Claim relating to the relationship of the Company and Holder or their respective affiliates shall be in San Diego County, State of California. Without modifying the Company's and Holder's obligations to resolve disputes hereunder pursuant to the Arbitration Provisions, for any litigation arising in connection with any of the Transaction Documents (and notwithstanding the terms (specifically including any governing law and venue terms) of any transfer agent services agreement or other agreement between the Company's transfer agent and the Company, such litigation specifically includes, without limitation any action between or involving Company and the Company's transfer agent under the Irrevocable Transfer Agent Instructions (as defined in the Purchase Agreement) or otherwise related to Holder in any way (specifically including, without limitation, any action where Company seeks to obtain an injunction, temporary restraining order, or otherwise prohibit the Company's transfer agent from issuing shares of Common Stock to Holder for any reason)), each party hereto hereby (i) consents to and expressly submits to the exclusive personal jurisdiction of any state or federal court sitting in San Diego County, State of California, (ii) expressly submits to the exclusive venue of any such court for the purposes hereof, (iii) agrees to not bring any such action (specifically including, without limitation, any action where Company seeks to obtain an injunction, temporary restraining order, or otherwise prohibit the Company's transfer agent from issuing shares of Common Stock to Holder for any reason) outside of any state or federal court sitting in San Diego County, State of California, and (iv) waives any claim of improper venue and any claim or objection that such courts are an inconvenient forum or any other claim, defense or objection to the bringing of any such proceeding in such jurisdiction or to any claim that such venue of the suit, action or proceeding is improper. Notwithstanding anything in the foregoing to the contrary, nothing herein (i) shall limit, or shall be deemed or construed to limit, the ability of the Holder to realize on any collateral or any other security, or to enforce a judgment or other court ruling in favor of the Holder, including through a legal action in any court of competent jurisdiction, or (ii) shall limit, or shall be deemed or construed to limit, any provision of Section 4.15 of this Note. The Company hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any objection to jurisdiction and venue of any action instituted hereunder, any claim that it is not personally subject to the jurisdiction of any such court, and any claim that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper (including but not limited to based upon *forum non conveniens*). **THE COMPANY 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 WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTIONS CONTEMPLATED HEREBY**. The Company irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Note or any other agreement, certificate, instrument or document contemplated hereby or thereby by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to Company 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 law. The prevailing party in any action or dispute brought in connection with this Note or any other agreement, certificate, instrument or document contemplated hereby or thereby shall be entitled to recover from the other party its reasonable attorney's fees and costs. If any provision of this Note shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Note in that jurisdiction or the validity or enforceability of any provision of this Note in any other 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;4.7 <u>Certain Amounts.</u> Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstanding Principal Amount (or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on such interest, the Borrower and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this Note may be difficult to determine and the amount to be so paid by the Borrower represents stipulated damages and not a penalty and is intended to compensate the Holder in part for loss of the opportunity to convert this Note and to earn a return from the sale of shares of Common Stock acquired upon conversion of this Note at a price in excess of the price paid for such shares pursuant to this Note. The Borrower and the Holder hereby agree that such amount of stipulated damages is not plainly disproportionate to the possible loss to the Holder from the receipt of a cash payment without the opportunity to convert this Note into 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;4.8 <u>Purchase Agreement.</u> The Company and the Holder shall be bound by the applicable terms of the Transaction Documents entered into in connection herewith and 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;4.9 <u>Notice of Corporate Events.</u> Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder of Common Stock unless and only to the extent that it converts this Note into Common Stock. The Borrower shall provide the Holder with prior notification of any meeting of the Borrower's shareholders (and copies of proxy materials and other information sent to shareholders). In the event of any taking by the Borrower of a record of its shareholders for the purpose of determining shareholders who are entitled to receive payment of any dividend or other distribution, any right to subscribe for, purchase or otherwise acquire (including by way of merger, consolidation, reclassification or recapitalization) any share of any class or any other securities or property, or to receive any other right, or for the purpose of determining shareholders who are entitled to vote in connection with any change in control or any proposed liquidation, dissolution or winding up of the Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20) days prior to the record date specified therein (or thirty (30) days prior to the consummation of the transaction or event, whichever is earlier), of the date on which any such record is to be taken for the purpose of such dividend, distribution, right or other event, and a brief statement regarding the amount and character of such dividend, distribution, right or other event to the extent known at such time. The Borrower shall make a public announcement of any event requiring notification to the Holder hereunder substantially simultaneously with the notification to the Holder in accordance with the terms of this Section 4.9.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.10 <u>Remedies.</u> The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or other security being required.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.11 <u>Construction; Headings</u>. This Note shall be deemed to be jointly drafted by the Company and all the Holder and shall not be construed against any person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part of, or affect the interpretation of, this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.12 <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 the Holder in order to enforce any right or remedy under this Note. Notwithstanding any provision to the contrary contained in this Note, it is expressly agreed and provided that the total liability of the Company under this Note for payments which under the applicable law are in the nature of interest shall not exceed the maximum lawful rate authorized under applicable law (the "Maximum Rate"), 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 which under the applicable law in the nature of interest that the Company may be obligated to pay under this Note exceed such Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by applicable law and applicable to this Note is increased or decreased by statute or any official governmental action subsequent to the Issue Date, the new maximum contract rate of interest allowed by law will be the Maximum Rate applicable to this Note 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 the Holder with respect to indebtedness evidenced by this the Note, such excess shall be applied by the Holder to the unpaid principal balance of any such indebtedness or be refunded to the Company, the manner of handling such excess to be at the Holder's election.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.13 <u>Severability.</u> In the event that any provision of this Note is invalid or unenforceable under any applicable statute or rule of law (including any judicial ruling), then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.14 <u>Terms of Future Financings.</u> So long as this Note is outstanding, upon any issuance by the Borrower or any of its Subsidiaries of any security, or amendment to a security that was originally issued before the Issue Date, with any term that the Holder reasonably believes is more favorable to the holder of such security or with a term in favor of the holder of such security that the Holder reasonably believes was not similarly provided to the Holder in this Note (even if the holder of such other security does not receive the benefit of such more favorable term until a default occurs under such other security), then (i) the Borrower shall notify the Holder of such additional or more favorable term within one (1) business day of the issuance and/or amendment (as applicable) of the respective security, and (ii) such term, at Holder's option, shall become a part of the transaction documents with the Holder (regardless of whether the Borrower complied with the notification provision of this Section 4.14). The types of terms contained in another security that may be more favorable to the holder of such security include, but are not limited to, terms addressing payment rate, interest rates, conversion price, and original issue discount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.15 <u>Dispute Resolution</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;(a) In the case of a dispute relating to the Conversion Price, Conversion Amount, any repayment amount or Default Amount, Issue Date, Closing Date, Maturity Date, the closing bid price, or fair market value (as the case may be) (including, without limitation, a dispute relating to the determination of any of the foregoing) (the "Note Calculations"), the Company or the Holder (as the case may be) shall submit the dispute to the other party via electronic mail (A) if by the Company, within two (2) Trading Days after the occurrence of the circumstances giving rise to such dispute or (B) if by the Holder, at any time after the Holder learned of the circumstances giving rise to such dispute. If the Holder and the Company are unable to agree upon such determination or calculation within two (2) Trading Days following such initial notice by the Company or the Holder (as the case may be) of such dispute to the Company or the Holder (as the case may be), then the Holder may, at its sole option, submit the dispute to an independent, reputable investment bank or independent, outside accountant selected by the Holder (the "Independent Third Party"), and the Company shall pay all expenses of such Independent Third 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Holder and the Company shall each deliver to such Independent Third Party (A) a copy of the initial dispute submission so delivered in accordance with the first sentence of this Section 4.15(a) and (B) written documentation supporting its position with respect to such dispute, in each case, no later than 5:00 p.m. (New York time) by second (2nd) Business Day immediately following the date on which the Holder selected such Independent Third Party (the "Dispute Submission Deadline") (the documents referred to in the immediately preceding clauses (A) and (B) are collectively referred to herein as the "Required Dispute Documentation") (it being understood and agreed that if either the Holder or the Company fails to so deliver all of the Required Dispute Documentation by the Dispute Submission Deadline, then the party who fails to so submit all of the Required Dispute Documentation shall no longer be entitled to (and hereby waives its right to) deliver or submit any written documentation or other support to such Independent Third Party with respect to such dispute and such Independent Third Party shall resolve such dispute based solely on the Required Dispute Documentation that was delivered to such Independent Third Party prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by both the Company and the Holder or otherwise requested by such Independent Third Party, neither the Company nor the Holder shall be entitled to deliver or submit any written documentation or other support to such Independent Third Party in connection with such dispute, other than the Required Dispute Documentation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 and the Holder shall cause such Independent Third Party to determine the resolution of such dispute and notify the Company and the Holder of such resolution no later than five (5) Business Days immediately following the Dispute Submission Deadline. The fees and expenses of such Independent Third Party shall be borne solely by the Company, and such Independent Third Party's resolution of such dispute shall be final and binding upon all parties absent manifest error.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 Company expressly acknowledges and agrees that (i) this Section 4.15 constitutes an agreement to arbitrate between the Company and the Holder (and constitutes an arbitration agreement) under the rules then in effect under the Nevada Rules of Civil Procedure ("NRCP") and that the Holder is authorized to apply for an order to compel arbitration pursuant to the NRCP in order to compel compliance with this Section 4.15, (ii) a dispute relating to the Note Calculations includes, without limitation, disputes as to (A) whether an issuance or sale or deemed issuance or sale of Common Stock occurred under Section 1.6 of this Note, (B) the consideration per share at which an issuance or deemed issuance of Common Stock occurred, (C) whether any issuance or sale or deemed issuance or sale of Common Stock was an issuance or sale or deemed issuance or sale, (D) whether an agreement, instrument, security or the like constitutes a Common Stock Equivalent and (E) whether a Dilutive Issuance occurred, (iii) the terms of this Note and each other applicable Transaction Document shall serve as the basis for the selected Independent Third Party's resolution of the applicable dispute, such Independent Third Party shall be entitled (and is hereby expressly authorized) to make all findings, determinations and the like that such Independent Third Party determines are required to be made by such Independent Third Party in connection with its resolution of such dispute (including, without limitation, determining (A) whether an issuance or sale or deemed issuance or sale of Common Stock occurred under Section 1.6 of this Note, (B) the consideration per share at which an issuance or deemed issuance of Common Stock occurred, (C) whether any issuance or sale or deemed issuance or sale of Common Stock was an issuance or sale or deemed issuance or sale, (D) whether an agreement, instrument, security or the like constitutes a Common Stock Equivalent and (E) whether a Dilutive Issuance occurred) and in resolving such dispute such Independent Third Party shall apply such findings, determinations and the like to the terms of this Note and any other applicable Transaction Documents, and (iv) nothing in this Section 4.15 shall limit the Holder from obtaining any injunctive relief or other equitable remedies (including, without limitation, with respect to any matters described in this Section 4.15).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.16 <u>Amortization Payments</u>. In addition to all other payment obligations under this Note, the Borrower shall also make the following amortization payments (each an "Amortization Payment") in cash to the Holder towards the repayment of this Note, as provided in the following table:

---

| | |
|:---|:---|
| <u>Payment Date</u>: | <u>Payment Amount</u>: |
| October 13, 2026 | $102600.00 |
| November 13, 2026 | $102600.00 |
| December 13, 2026 | $102600.00 |
| January 13, 2027 | $102600.00 |
| February 13, 2027 | $102600.00 |
| March 13, 2027 | All remaining outstanding amounts under the Note |

---

For the avoidance of doubt, each Amortization Payment paid to Holder under this Note shall first reduce all accrued and unpaid interest under the Note, and the remainder of such Amortization Payment (if any) shall reduce the outstanding principal balance of the Note.

[signature page follows]

**IN WITNESS WHEREOF**, Borrower has caused this Note to be signed in its name by its duly authorized officer on March 13, 2026.

**ALTERNATIVE BALLISTICS CORPORATION**

---

| | |
|:---|:---|
| By: | */s/ Steven Luna* |
| Name: | Steven Luna |
| Title: | Chief Executive Officer |

---

**EXHIBIT A — NOTICE OF CONVERSION**

The undersigned hereby elects to convert $________________principal amount of the Note (defined below) into that number of shares of Common Stock to be issued pursuant to the conversion of the Note ("Common Stock") as set forth below, of **ALTERNATIVE BALLISTICS CORPORATION**, a Nevada corporation (the "Borrower"), according to the conditions of the secured promissory note of the Borrower dated as of March 13, 2026 (the "Note"), as of the date written below. No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.

Box Checked as to applicable instructions:

---

| | |
|:---|:---|
| ☐ | The Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission system ("DWAC Transfer"). |
|  | Name of DTC Prime Broker: |
|  | Account Number: |

---

☐ The undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth below (which numbers are based on the Holder's calculation attached hereto) in the name(s) specified immediately below or, if additional space is necessary, on an attachment hereto:

---

| | |
|:---|:---|
| Date of Conversion: | |
| Applicable Conversion Price: | $*<u> </u>* |
| Number of Shares of Common Stock to be Issued Pursuant to Conversion of the Note: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u> </u><br>|
| Amount of Principal Balance Due remaining Under the Note after this conversion: | &nbsp;&nbsp;&nbsp;&nbsp;&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><u> </u><br>|

---

---

| |
|:---|
| By: |
| Name: |
| Title: |
| Date: |

---

## Add

**Exhibit 6.29**

**SECURITY AGREEMENT**

This SECURITY AGREEMENT, dated as of March 13, 2026 (this "<u>Agreement</u>"), is among Alternative Ballistics Corporation, a Nevada corporation (the "<u>Company</u>"), all of the Subsidiaries (as defined in the Purchase Agreement) of the Company (such subsidiaries, the "<u>Guarantors</u>" and, collectively with the Company, the "<u>Debtor</u>" or "<u>Debtors</u>") and Lendspark Corporation, a California corporation (collectively with its endorsees, transferees and assigns, the "<u>Secured Parties</u>").

**W I T N E S S E T H:**

WHEREAS, pursuant to the securities purchase agreement entered into by the Company and the Secured Parties on or around March 13, 2026 (the "Purchase Agreement"), the Secured Parties have agreed to extend the loan to Company as evidenced by that certain 12% secured promissory note dated on or around March 13, 2026, in the original principal amount of $550,000.00 (the "Note");

WHEREAS, in order to induce the Secured Parties to extend the loan evidenced by the Note under the Purchase Agreement, each Debtor has agreed to execute and deliver to the Secured Parties this Agreement and to grant the Secured Parties, a security interest in certain property of such Debtors to secure the prompt payment, performance and discharge in full of all of the Company's obligations under the Note.

NOW, THEREFORE, in consideration of the agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **Certain Definitions**. As used in this Agreement, the following terms shall have the meanings set forth in this Section 1. Terms used but not otherwise defined in this Agreement that are defined in Article 9 of the UCC (such as "account", "chattel paper", "commercial tort claim", "deposit account", "document", "equipment", "fixtures", "general intangibles", "goods", "instruments", "inventory", "investment property", "letter-of-credit rights", "proceeds" and "supporting obligations") shall have the respective meanings given such terms in Article 9 of the UCC.

&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>Collateral</u>" means the collateral in which the Secured Parties are granted a security interest by this Agreement in all of the Debtors' assets, and which shall include but is not limited to the following personal property of the Debtors, whether presently owned or existing or hereafter acquired or coming into existence, wherever situated, and all additions and accessions thereto and all substitutions and replacements thereof, and all proceeds, products and accounts thereof, including, without limitation, all proceeds from the sale or transfer of the Collateral and of insurance covering the same and of any tort claims in connection therewith, and all dividends, interest, cash, notes, securities, equity interest or other property at any time and from time to time acquired, receivable or otherwise distributed in respect of, or in exchange for, any or all of the Pledged Securities (as defined 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;(i) All goods, including, without limitation, (A) all machinery, equipment, computers, motor vehicles, trucks, tanks, boats, ships, appliances, furniture, special and general tools, fixtures, test and quality control devices and other equipment of every kind and nature and wherever situated, together with all documents of title and documents representing the same, all additions and accessions thereto, replacements therefor, all parts therefor, and all substitutes for any of the foregoing and all other items used and useful in connection with any Debtor's businesses and all improvements thereto; and (B) all inventory;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 contract rights and other general intangibles, including, without limitation, Intellectual Property, all partnership interests, membership interests, stock or other securities, rights under any of the Organizational Documents, agreements related to the Pledged Securities, licenses, distribution and other agreements, computer software (whether "off-the-shelf", licensed from any third party or developed by any Debtor), computer software development rights, leases, franchises, customer lists, quality control procedures, grants and rights, goodwill, Intellectual Property, income tax refunds, and employee retention tax credits;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) All accounts, together with all instruments, all documents of title representing any of the foregoing, all rights in any merchandising, goods, equipment, motor vehicles and trucks which any of the same may represent, and all right, title, security and guaranties with respect to each account, including any right of stoppage in transit;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) All documents, letter-of-credit rights, instruments and chattel paper;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) All commercial tort claims (including but not limited to any such claims that arise in connection with any existing or future claims of breaches of loyalty, good faith, care, or obedience against any past, present, or future officers or directors of any of the Debtors);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) All deposit accounts and all cash (whether or not deposited in such deposit accounts);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) All investment property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) All supporting obligations; 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;(ix) All files, records, books of account, business papers, and computer programs; 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;(x) the products and proceeds of all of the foregoing Collateral set forth in clauses (i)-(ix) above.

Without limiting the generality of the foregoing, the "<u>Collateral</u>" shall include all investment property and general intangibles respecting ownership and/or other equity interests in each Guarantor, including, without limitation, the shares of capital stock and the other equity interests disclosed in the SEC Documents (as defined in the Purchase Agreement) (the "<u>SEC Documents</u>") and listed on <u>Schedule E</u> hereto (as the same may be modified from time to time pursuant to the terms hereof), and any other shares of capital stock and/or other equity interests of any other direct or indirect subsidiary of any Debtor obtained in the future, and, in each case, all certificates representing such shares and/or equity interests and, in each case, all rights, options, warrants, stock, other securities and/or equity interests that may hereafter be received, receivable or distributed in respect of, or exchanged for, any of the foregoing and all rights arising under or in connection with the Pledged Securities, including, but not limited to, all dividends, interest and cash.

Notwithstanding the foregoing, nothing herein shall be deemed to constitute an assignment of any asset which, in the event of an assignment, becomes void by operation of applicable law or the assignment of which is otherwise prohibited by applicable law (in each case to the extent that such applicable law is not overridden by Sections 9-406, 9-407 and/or 9-408 of the UCC or other similar applicable law); <u>provided</u>, <u>however</u>, that, to the extent permitted by applicable law, this Agreement shall create a valid security interest in such asset and, to the extent permitted by applicable law, this Agreement shall create a valid security interest in the proceeds of such asset.

&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>Intellectual Property</u>" means the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including, without limitation, (i) all copyrights arising under the laws of the United States, any other country or any political subdivision thereof, whether registered or unregistered and whether published or unpublished, all registrations and recordings thereof, and all applications in connection therewith, including, without limitation, all registrations, recordings and applications in the United States Copyright Office, (ii) all letters patent of the United States, any other country or any political subdivision thereof, all reissues and extensions thereof, and all applications for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part thereof, (iii) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade dress, service marks, logos, domain names and other source or business identifiers, and all goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, or otherwise, and all common law rights related thereto, (iv) all trade secrets arising under the laws of the United States, any other country or any political subdivision thereof, (v) all rights to obtain any reissues, renewals or extensions of the foregoing, (vi) all licenses for any of the foregoing, and (vii) all causes of action for infringement of the foregoing.

&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) [Intentionally Omitted].

&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>Necessary Endorsement</u>" means undated stock powers endorsed in blank or other proper instruments of assignment duly executed and such other instruments or documents as the Secured Parties may 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;(e) "<u>Obligations</u>" means all of the liabilities and obligations (primary, secondary, direct, contingent, sole, joint or several) due or to become due, or that are now or may be hereafter contracted or acquired, or owing to, of any Debtor to the Secured Parties, including, without limitation, all obligations under this Agreement, the Note, the Warrants (as defined in the Purchase Agreement) (the "Warrants"), and any other instruments, agreements or other documents executed and/or delivered in connection herewith or therewith, in each case, whether now or hereafter existing, voluntary or involuntary, direct or indirect, absolute or contingent, liquidated or unliquidated, whether or not jointly owed with others, and whether or not from time to time decreased or extinguished and later increased, created or incurred, and all or any portion of such obligations or liabilities that are paid, to the extent all or any part of such payment is avoided or recovered directly or indirectly from any of the Secured Parties as a preference, fraudulent transfer or otherwise as such obligations may be amended, supplemented, converted, extended or modified from time to time. Without limiting the generality of the foregoing, the term "Obligations" shall include, without limitation: (i) principal, interest, and penalties under the Note and all other amounts owed thereunder; (ii) any and all other fees, indemnities, costs, obligations and liabilities of the Debtors from time to time under or in connection with this Agreement, the Note, the Warrants, and any other instruments, agreements or other documents executed and/or delivered in connection herewith or therewith; and (iii) all amounts (including but not limited to post-petition interest) in respect of the foregoing that would be payable but for the fact that the obligations to pay such amounts are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving any Debtor.

&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>Organizational Documents</u>" means, with respect to any Debtor, the documents by which such Debtor was organized (such as a certificate of incorporation, certificate of limited partnership or articles of organization, and including, without limitation, any certificates of designation for preferred stock or other forms of preferred equity) and which relate to the internal governance of such Debtor (such as bylaws, a partnership agreement or an operating, limited liability or members 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;(g) "<u>Pledged Interests</u>" shall have the meaning ascribed to such term in Section 4(j).

&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>Pledged Securities</u>" shall have the meaning ascribed to such term in Section 4(i).

&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>UCC</u>" means the Uniform Commercial Code of the State of Nevada and or any other applicable law of any state or states which has jurisdiction with respect to all, or any portion of, the Collateral or this Agreement, from time to time. It is the intent of the parties that defined terms in the UCC should be construed in their broadest sense so that the term "Collateral" will be construed in its broadest sense. Accordingly if there are, from time to time, changes to defined terms in the UCC that broaden the definitions, they are incorporated herein and if existing definitions in the UCC are broader than the amended definitions, the existing ones shall be controlling.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **Grant of Security Interest in Collateral**. As an inducement for the Secured Parties to extend the loan as evidenced by the Note, and to secure the complete and timely payment, performance and discharge in full, as the case may be, of all of the Obligations, each Debtor hereby unconditionally and irrevocably pledges, grants and hypothecates to the Secured Parties a security interest in and to, a lien upon and a right of set-off against all of their respective right, title and interest of whatsoever kind and nature in and to, the Collateral (a "<u>Security Interest</u>" and, collectively, the "<u>Security Interests</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. **Delivery of Certain Collateral**. Contemporaneously or prior to the execution of this Agreement, each Debtor shall deliver or cause to be delivered to the Secured Parties (a) any and all certificates and other instruments representing or evidencing the Pledged Securities, and (b) any and all certificates and other instruments or documents representing any of the other Collateral, in each case, together with all Necessary Endorsements. The Debtors are, contemporaneously with the execution hereof, delivering to Secured Parties, or have previously delivered to Secured Parties, a true and correct copy of each Organizational Document governing any of the Pledged Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. **Representations, Warranties, Covenants and Agreements of the Debtors**. Except as set forth under the corresponding section of the disclosure schedules delivered to the Secured Parties concurrently herewith (the "<u>Disclosure Schedules</u>"), which Disclosure Schedules shall be deemed a part hereof, each Debtor represents and warrants to, and covenants and agrees with, the Secured Parties 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;(a) Each Debtor has the requisite corporate, partnership, limited liability company or other power and authority to enter into this Agreement and otherwise to carry out its obligations hereunder. The execution, delivery and performance by each Debtor of this Agreement and the filings contemplated therein have been duly authorized by all necessary action on the part of such Debtor and no further action is required by such Debtor. This Agreement has been duly executed by each Debtor. This Agreement constitutes the legal, valid and binding obligation of each Debtor, enforceable against each Debtor in accordance with its terms except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization and similar laws of general application relating to or affecting the rights and remedies of creditors and by general principles of equity.

&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 Debtors have no place of business or offices where their respective books of account and records are kept (other than temporarily at the offices of its attorneys or accountants) or places where Collateral is stored or located, except as set forth on <u>Schedule A</u> attached hereto. Except as specifically set forth on <u>Schedule A</u>, each Debtor is the record owner of the real property where such Collateral is located, and there exist no mortgages or other liens on any such real property. Except as disclosed on <u>Schedule A</u>, none of such Collateral is in the possession of any consignee, bailee, warehouseman, agent or processor.

&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) Except as set forth in <u>Schedule C</u> attached hereto, the Debtors are the sole owner of the Collateral (except for non-exclusive licenses granted by any Debtor in the ordinary course of business), free and clear of any liens, security interests, encumbrances, rights or claims. The Debtors are fully authorized to grant the Security Interests. Except as set forth in <u>Schedule C</u> attached hereto, there is not on file in any governmental or regulatory authority, agency or recording office an effective financing statement, security agreement, license or transfer or any notice of any of the foregoing (other than those that will be filed in favor of the Secured Parties pursuant to this Agreement) covering or affecting any of the Collateral. Except as set forth in <u>Schedule C</u> attached hereto and except pursuant to this Agreement, as long as this Agreement shall be in effect, the Debtors shall not execute and shall not knowingly permit to be on file in any such office or agency any other financing statement or other document or instrument (except to the extent filed or recorded in favor of the Secured Parties pursuant to the terms 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;(d) No written claim has been received that any Collateral or any Debtor's use of any Collateral violates the rights of any third party. There has been no adverse decision to any Debtor's claim of ownership rights in or exclusive rights to use the Collateral in any jurisdiction or to any Debtor's right to keep and maintain such Collateral in full force and effect, and there is no proceeding involving said rights pending or, to the best knowledge of any Debtor, threatened before any court, judicial body, administrative or regulatory agency, arbitrator or other governmental authority.

&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) Each Debtor shall at all times maintain its books of account and records relating to the Collateral at its principal place of business and its Collateral at the locations set forth on <u>Schedule A</u> attached hereto and may not relocate such books of account and records or tangible Collateral unless it delivers to the Secured Parties at least 30 days prior to such relocation (i) written notice of such relocation and the new location thereof (which must be within the United States) and (ii) evidence that appropriate financing statements under the UCC and other necessary documents have been filed and recorded and other steps have been taken to perfect the Security Interests to create in favor of the Secured Parties a valid, perfected and continuing perfected first priority lien in 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;(f) This Agreement creates in favor of the Secured Parties a valid security interest in the Collateral securing the payment and performance of the Obligations. Upon making the filings described in the immediately following paragraph, all security interests created hereunder in any Collateral which may be perfected by filing Uniform Commercial Code financing statements shall have been duly perfected. Except for the filing of the Uniform Commercial Code financing statements referred to in the immediately following paragraph, the execution and delivery of deposit account control agreements satisfying the requirements of Section 9-104(a)(2) of the UCC with respect to each deposit account of the Debtors, and the delivery of the certificates and other instruments provided in Section 3, no action is necessary to create, perfect or protect the security interests created hereunder. Without limiting the generality of the foregoing, except for the filing of said financing statements and the execution and delivery of said deposit account control agreements, no consent of any third parties and no authorization, approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for (i) the execution, delivery and performance of this Agreement, (ii) the creation or perfection of the Security Interests created hereunder in the Collateral or (iii) the enforcement of the rights of the Secured Parties 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;(g) Each Debtor hereby authorizes the Secured Parties to file one or more financing statements under the UCC with respect to the Security Interests, with the proper filing and recording agencies in any jurisdiction deemed proper by it. The Secured Parties shall have the right (and are hereby authorized to) to file with the applicable filing office(s) such financing statements, amendments, addenda, continuations, terminations, assignments and other records (whether or not executed by Debtors) to perfect and to maintain perfected first priority security interests in the Collateral by the Secured Parties, including but not limited to a financing statement on Form UCC-1 with the State of Nevada and in all other applicable jurisdictions with respect to the Collateral promptly upon the execution of this Agreement, as well as with the proper filing and recording agencies (including but not limited to any filings with the United States Copyright Office and the United States Patent and Trademark 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;(h) The execution, delivery and performance of this Agreement by the Debtors does not (i) violate any of the provisions of any Organizational Documents of any Debtor or any judgment, decree, order or award of any court, governmental body or arbitrator or any applicable law, rule or regulation applicable to any Debtor, or (ii) conflict with, or constitute a default (or an event that 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 (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing any Debtor's debt or otherwise) or other understanding to which any Debtor is a party or by which any property or asset of any Debtor is bound or affected. If any, all required consents (including, without limitation, from stockholders or creditors of any Debtor) necessary for any Debtor to enter into and perform its obligations hereunder have been obtained.

&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 ownership and other equity interests in partnerships and limited liability companies (if any) included in the Collateral (the "<u>Pledged Interests</u>") by their express terms do not provide that they are securities governed by Article 8 of the UCC and are not held in a securities account or by any financial intermediary.

&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) Each Debtor shall at all times maintain the liens and Security Interests provided for hereunder as valid and perfected first priority liens and security interests in the Collateral in favor of the Secured Parties until this Agreement and the Security Interest hereunder shall be terminated pursuant to Section 14 hereof. Each Debtor hereby agrees to defend the same against the claims of any and all persons and entities. Each Debtor shall safeguard and protect all Collateral for the account of the Secured Parties. Each Debtor shall pay the cost of filing the same in all public offices wherever filing is, or is deemed by the Secured Parties to be, necessary or desirable to effect the rights and obligations provided for herein. Each Debtor shall file with the applicable filing office(s) such financing statements, amendments, addenda, continuations, terminations, assignments and other records (whether or not executed by Debtor) to perfect and to maintain perfected security interests in the Collateral by the Secured Parties, including but not limited to (a) promptly upon the execution of this Agreement, a financing statement on Form UCC-1 shall be filed with the State of Nevada and in all other applicable jurisdictions on behalf of the Secured Parties with respect to the Collateral. The Financing Statement shall designate the Secured Parties as the secured party and Debtor as the debtor, shall identify the security interest in the Collateral, and contain any other items required by law. Without limiting the generality of the foregoing, each Debtor shall pay all fees, taxes and other amounts necessary to maintain the Collateral and the Security Interests hereunder, and each Debtor shall obtain and furnish to the Secured Parties from time to time, upon demand, such releases and/or subordinations of claims and liens which may be required to maintain the priority of the Security Interests 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;(l) No Debtor will transfer, pledge, hypothecate, encumber, license, sell or otherwise dispose of any of the Collateral (except for non-exclusive licenses granted by a Debtor in its ordinary course of business and sales of inventory by a Debtor in its ordinary course of business) without the prior written consent of the Secured 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;(m) Each Debtor shall keep and preserve its equipment, inventory and other tangible Collateral in good condition, repair and order and shall not operate or locate any such Collateral (or cause to be operated or located) in any area excluded from insurance coverage.

&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) Each Debtor shall maintain with financially sound and reputable insurers, insurance with respect to the Collateral, including Collateral hereafter acquired, against loss or damage of the kinds and in the amounts customarily insured against by entities of established reputation having similar properties similarly situated and in such amounts as are customarily carried under similar circumstances by other such entities and otherwise as is prudent for entities engaged in similar businesses but in any event sufficient to cover the full replacement cost thereof. Each Debtor shall cause each insurance policy issued in connection herewith to provide, and the insurer issuing such policy to certify to the Secured Parties, that (a) the Secured Parties will be named as lender loss payee and additional insured under each such insurance policy; (b) if such insurance be proposed to be cancelled or materially changed for any reason whatsoever, such insurer will promptly notify the Secured Parties and such cancellation or change shall not be effective as to the Secured Parties for at least thirty (30) days after receipt by the Secured Parties of such notice, unless the effect of such change is to extend or increase coverage under the policy; and (c) the Secured Parties will have the right (but no obligation) at its election to remedy any default in the payment of premiums within thirty (30) days of notice from the insurer of such default. If no Event of Default (as defined in the Note) under the Note exists and if the proceeds arising out of any claim or series of related claims do not exceed $100,000, loss payments in each instance will be applied by the applicable Debtor to the repair and/or replacement of property with respect to which the loss was incurred to the extent reasonably feasible, and any loss payments or the balance thereof remaining, to the extent not so applied, shall be payable to the applicable Debtor; <u>provided</u>, <u>however</u>, that payments received by any Debtor after an Event of Default occurs and is continuing or in excess of $100,000 for any occurrence or series of related occurrences shall be paid to the Secured Parties and accordingly, if received by such Debtor, shall be held in trust for the Secured Parties and immediately paid over to the Secured Parties. Copies of such policies or the related certificates, in each case, naming the Secured Parties as lender loss payee and additional insured shall be delivered to the Secured Parties at least annually and at the time any new policy of insurance is issued.

&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) Each Debtor shall, within twenty (20) days of obtaining knowledge thereof, advise the Secured Parties promptly, in sufficient detail, of any material adverse change in the Collateral, and of the occurrence of any event which would have a material adverse effect on the value of the Collateral or on the Secured Parties' security interest 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;(p) Each Debtor shall promptly execute and deliver to the Secured Parties such further deeds, mortgages, assignments, security agreements, financing statements or other instruments, documents, certificates and assurances and take such further action as the Secured Parties may from time to time request and may in its sole discretion deem necessary to perfect, protect or enforce the Secured Parties' security interest in 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;(q) Each Debtor shall permit the Secured Parties and its representatives and agents to inspect the Collateral during normal business hours and upon reasonable prior notice, and to make copies of records pertaining to the Collateral as may be reasonably requested by the Secured Parties 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;(r) Each Debtor shall take all steps reasonably necessary to diligently pursue and seek to preserve, enforce and collect any rights, claims, causes of action and accounts receivable in respect 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;(s) Each Debtor shall promptly notify the Secured Parties in sufficient detail upon becoming aware of any attachment, garnishment, execution or other legal process levied against any Collateral and of any other information received by such Debtor that may materially affect the value of the Collateral, the Security Interest or the rights and remedies of the Secured Parties 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;(t) All information heretofore, herein or hereafter supplied to the Secured Parties by or on behalf of any Debtor with respect to the Collateral is accurate and complete in all material respects as of the date furnished.

&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) The Debtors shall at all times preserve and keep in full force and effect their respective valid existence and good standing and any rights and franchises material to its 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;(v) No Debtor will change its name, type of organization, jurisdiction of organization, organizational identification number (if it has one), legal or corporate structure, or identity, or add any new fictitious name unless it provides at least 30 days prior written notice to the Secured Parties of such change and, at the time of such written notification, such Debtor provides any financing statements or fixture filings necessary to perfect and continue the perfection of the Security Interests granted and evidenced 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;(w) Except in the ordinary course of business, no Debtor may consign any of its inventory or sell any of its inventory on bill and hold, sale or return, sale on approval, or other conditional terms of sale without the consent of the Secured Parties which shall not be unreasonably withheld.

&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) No Debtor may relocate its chief executive office to a new location without providing 30 days prior written notification thereof to the Secured Parties and so long as, at the time of such written notification, such Debtor provides any financing statements or fixture filings necessary to perfect and continue the perfection of the Security Interests granted and evidenced 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;(y) Each Debtor was organized and remains organized solely under the laws of the state set forth next to such Debtor's name in <u>Schedule B</u> attached hereto, which <u>Schedule B</u> sets forth each Debtor's organizational identification number or, if any Debtor does not have one, states that one does not exist.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(z) (i) The actual name of each Debtor is the name set forth in <u>Schedule B</u> attached hereto; (ii) no Debtor has any trade names except as set forth in <u>Schedule B</u> attached hereto; (iii) no Debtor has used any name other than that stated in the preamble hereto or as set forth in <u>Schedule B</u> attached hereto for the preceding five years; and (iv) no entity has merged into any Debtor or been acquired by any Debtor within the past five years except as set forth on <u>Schedule B</u> attached 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;(aa) At any time and from time to time that any Collateral consists of instruments, certificated securities or other items that require or permit possession by the Secured Parties to perfect the security interest created hereby, the applicable Debtor shall deliver such Collateral to the Secured 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;(bb) Each Debtor, in its capacity as issuer, hereby agrees to comply with any and all orders and instructions of Secured Parties regarding the Pledged Interests consistent with the terms of this Agreement without the further consent of any Debtor as contemplated by Section 8-106 (or any successor section) of the UCC. Further, each Debtor agrees that it shall not enter into a similar agreement (or one that would confer "control" within the meaning of Article 8 of the UCC) with any other person or entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(dd) If there is any investment property or deposit account included as Collateral that can be perfected by "control" through an account control agreement, the applicable Debtor shall cause such an account control agreement, in form and substance in each case satisfactory to the Secured Parties, to be entered into and delivered to the Secured 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;(ee) To the extent that any Collateral consists of letter-of-credit rights, the applicable Debtor shall cause the issuer of each underlying letter of credit to consent to an assignment of the proceeds thereof to the Secured 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;(ff) To the extent that any Collateral is in the possession of any third party, the applicable Debtor shall join with the Secured Parties in notifying such third party of the Secured Parties' security interest in such Collateral and shall use its best efforts to obtain an acknowledgement and agreement from such third party with respect to the Collateral, in form and substance reasonably satisfactory to the Secured 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;(gg) If any Debtor shall at any time hold or acquire a commercial tort claim, such Debtor shall promptly notify the Secured Parties in a writing signed by such Debtor of the particulars thereof and grant to the Secured Parties in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance satisfactory to the Secured 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;(hh) Each Debtor shall immediately provide written notice to the Secured Parties of any and all accounts which arise out of contracts with any governmental authority and, to the extent necessary to perfect or continue the perfected status of the Security Interests in such accounts and proceeds thereof, shall execute and deliver to the Secured Parties an assignment of claims for such accounts and cooperate with the Secured Parties in taking any other steps required, in its judgment, under the Federal Assignment of Claims Act or any similar federal, state or local statute or rule to perfect or continue the perfected status of the Security Interests in such accounts and proceeds 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;(ii) Each Debtor shall cause each subsidiary of such Debtor (including but not limited to each subsidiary acquired or formed by a Debtor after the date of this Agreement) to immediately become a party hereto (an "Additional Debtor"), by executing and delivering an Additional Debtor Joinder in substantially the form of <u>Annex A</u> attached hereto and comply with the provisions hereof applicable to the Debtors. Concurrent therewith, the Additional Debtor shall deliver replacement schedules for, or supplements to all other Schedules to (or referred to in) this Agreement, as applicable, which replacement schedules shall supersede, or supplements shall modify, the Schedules then in effect. The Additional Debtor shall also deliver such opinions of counsel, authorizing resolutions, good standing certificates, incumbency certificates, organizational documents, financing statements and other information and documentation as the Secured Parties may reasonably request. Upon delivery of the foregoing to the Secured Parties, the Additional Debtor shall be and become a party to this Agreement with the same rights and obligations as the Debtors, for all purposes hereof as fully and to the same extent as if it were an original signatory hereto and shall be deemed to have made the representations, warranties and covenants set forth herein as of the date of execution and delivery of such Additional Debtor Joinder, and all references herein to the "Debtors" shall be deemed to include each Additional Debtor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(jj) Each Debtor shall vote the Pledged Securities to comply with the covenants and agreements set forth herein and in the Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(kk) Each Debtor shall register the pledge of the applicable Pledged Securities on the books of such Debtor. Each Debtor shall notify each issuer of Pledged Securities to register the pledge of the applicable Pledged Securities in the name of the Secured Parties on the books of such issuer. Further, except with respect to certificated securities delivered to the Secured Parties, the applicable Debtor shall deliver to Secured Parties an acknowledgement of pledge (which, where appropriate, shall comply with the requirements of the UCC with respect to perfection by registration) signed by the issuer of the applicable Pledged Securities, which acknowledgement shall confirm that: (a) it has registered the pledge on its books and records; and (b) at any time directed by the Secured Parties during the continuation of an Event of Default, such issuer will transfer the record ownership of such Pledged Securities into the name of the Secured Parties or any designee of Secured Parties, will take such steps as may be necessary to effect the transfer, and will comply with all other instructions of Secured Parties regarding such Pledged Securities without the further consent of the applicable Debtor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ll) In the event that, upon an occurrence of an Event of Default, Secured Parties shall sell all or any of the Pledged Securities to another party or parties (herein called the "<u>Transferee</u>") or shall purchase or retain all or any of the Pledged Securities, each Debtor shall, to the extent applicable: (i) deliver to Secured Parties or the Transferee, as the case may be, the articles of incorporation, bylaws, minute books, stock certificate books, corporate seals, deeds, leases, indentures, agreements, evidences of indebtedness, books of account, financial records and all other Organizational Documents and records of the Debtors and their direct and indirect subsidiaries; (ii) use its best efforts to obtain resignations of the persons then serving as officers and directors of the Debtors and their direct and indirect subsidiaries, if so requested; and (iii) use its best efforts to obtain any approvals that are required by any governmental or regulatory body in order to permit the sale of the Pledged Securities to the Transferee or the purchase or retention of the Pledged Securities by Secured Parties and allow the Transferee or Secured Parties to continue the business of the Debtors and their direct and indirect 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;(mm) Without limiting the generality of the other obligations of the Debtors hereunder, each Debtor shall promptly (i) cause to be registered at the United States Copyright Office all of its material copyrights, (ii) cause the security interest contemplated hereby with respect to all Intellectual Property registered at the United States Copyright Office or United States Patent and Trademark Office to be duly recorded at the applicable office, and (iii) give the Secured Parties notice whenever it acquires (whether absolutely or by license) or creates any additional material Intellectual Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(nn) Each Debtor will from time to time, at the joint and several expense of the Debtors, promptly execute and deliver all such further instruments and documents, and take all such further action as may be necessary or desirable, or as the Secured Parties may reasonably request, in order to perfect and protect any security interest granted or purported to be granted hereby or to enable the Secured Parties to exercise and enforce their rights and remedies hereunder and with respect to any Collateral or to otherwise carry out the 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;(oo) <u>Schedule D</u> attached hereto lists all of the patents, patent applications, trademarks, trademark applications, registered copyrights, and domain names owned by any of the Debtors as of the date hereof. <u>Schedule D</u> attached hereto lists all material licenses in favor of any Debtor for the use of any patents, trademarks, copyrights and domain names as of the date hereof. All material patents and trademarks of the Debtors have been duly recorded at the United States Patent and Trademark Office and all material copyrights of the Debtors have been duly recorded at the United States Copyright 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;(pp) None of the account debtors or other persons or entities obligated on any of the Collateral is a governmental authority covered by the Federal Assignment of Claims Act or any similar federal, state or local statute or rule in respect of such Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. **Effect of Pledge on Certain Rights**. If any of the Collateral subject to this Agreement consists of nonvoting equity or ownership interests (regardless of class, designation, preference or rights) that may be converted into voting equity or ownership interests upon the occurrence of certain events (including, without limitation, upon the transfer of all or any of the other stock or assets of the issuer), it is agreed that the pledge of such equity or ownership interests pursuant to this Agreement or the enforcement of any of Secured Parties' rights hereunder shall not be deemed to be the type of event which would trigger such conversion rights notwithstanding any provisions in the Organizational Documents or agreements to which any Debtor is subject or to which any Debtor is party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. **Defaults**. The following events shall each be an "<u>Event of Default</u>" 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) The occurrence of an Event of Default (as defined in the Note) under the Note;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any representation or warranty of any Debtor in this Agreement shall prove to have been incorrect in any material respect when made;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The failure by any Debtor to observe or perform any of its obligations hereunder for ten (10) days after delivery to such Debtor of notice of such failure by or on behalf of the Secured Parties unless such default is capable of cure but cannot be cured within such time frame and such Debtor is using best efforts to cure same in a timely fashion; 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;(d) If any provision of this Agreement shall at any time for any reason be declared to be null and void, or the validity or enforceability thereof shall be contested by any Debtor, or a proceeding shall be commenced by any Debtor, or by any governmental authority having jurisdiction over any Debtor, seeking to establish the invalidity or unenforceability thereof, or any Debtor shall deny that any Debtor has any liability or obligation purported to be created under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. **Duty To Hold In Trust**.

&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) Upon the occurrence of any Event of Default under this Agreement and at any time thereafter, each Debtor shall, upon receipt of any revenue, income, dividend, interest or other sums subject to the Security Interests, whether payable pursuant to the Note or otherwise, or of any check, draft, note, trade acceptance or other instrument evidencing an obligation to pay any such sum, hold the same in trust for the Secured Parties and shall forthwith endorse and transfer any such sums or instruments, or both, to the Secured Parties, for application to the satisfaction of the Obligations.

&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 any Debtor shall become entitled to receive or shall receive any securities or other property (including, without limitation, shares of Pledged Securities or instruments representing Pledged Securities acquired after the date hereof, or any options, warrants, rights or other similar property or certificates representing a dividend, or any distribution in connection with any recapitalization, reclassification or increase or reduction of capital, or issued in connection with any reorganization of such Debtor or any of its direct or indirect subsidiaries) in respect of the Pledged Securities (whether as an addition to, in substitution of, or in exchange for, such Pledged Securities or otherwise), such Debtor agrees to (i) accept the same as the agent of the Secured Parties; (ii) hold the same in trust on behalf of and for the benefit of the Secured Parties; and (iii) to deliver any and all certificates or instruments evidencing the same to Secured Parties on or before the close of business on the fifth business day following the receipt thereof by such Debtor, in the exact form received together with the Necessary Endorsements, to be held by Secured Parties subject to the terms of this Agreement as Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. **Rights and Remedies Upon Default**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Upon the occurrence of any Event of Default under this Agreement and at any time thereafter, the Secured Parties, shall have the right to exercise all of the remedies conferred hereunder and under the Note, and the Secured Parties shall have all the rights and remedies of a secured party under the UCC. Without limitation, the Secured Parties shall have the following rights and powers:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 Secured Parties shall have the right to take possession of the Collateral and, for that purpose, enter, with the aid and assistance of any person, any premises where the Collateral, or any part thereof, is or may be placed and remove the same, and each Debtor shall assemble the Collateral and make it available to the Secured Parties at places which the Secured Parties shall reasonably select, whether at such Debtor's premises or elsewhere, and make available to the Secured Parties, without rent, all of such Debtor's respective premises and facilities for the purpose of the Secured Parties taking possession of, removing or putting the Collateral in saleable or disposable form.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) Upon notice to the Debtors by Secured Parties, all rights of each Debtor to exercise the voting and other consensual rights which it would otherwise be entitled to exercise and all rights of each Debtor to receive the dividends and interest which it would otherwise be authorized to receive and retain, shall cease. Upon such notice, the Secured Parties shall have the right to receive any interest, cash dividends or other payments on the Collateral and, at the option of Secured Parties, to exercise in such Secured Parties' discretion all voting rights pertaining thereto. Without limiting the generality of the foregoing, Secured Parties shall have the right (but not the obligation) to exercise all rights with respect to the Collateral as it were the sole and absolute owner thereof, including, without limitation, to vote and/or to exchange, at its sole discretion, any or all of the Collateral in connection with a merger, reorganization, consolidation, recapitalization or other readjustment concerning or involving the Collateral or any Debtor or any of its direct or indirect 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Secured Parties shall have the right to assign, sell, lease or otherwise dispose of and deliver all or any part of the Collateral, at public or private sale or otherwise, either with or without special conditions or stipulations, for cash or on credit or for future delivery, in such parcel or parcels and at such time or times and at such place or places, and upon such terms and conditions as the Secured Parties may deem commercially reasonable, all without (except as shall be required by applicable statute and cannot be waived) advertisement or demand upon or notice to any Debtor or right of redemption of a Debtor, which are hereby expressly waived. Upon each such sale, lease, assignment or other transfer of Collateral, the Secured Parties, may, unless prohibited by applicable law which cannot be waived, purchase all or any part of the Collateral being sold, free from and discharged of all trusts, claims, right of redemption and equities of any Debtor, which are hereby waived and released.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 Secured Parties shall have the right (but not the obligation) to notify any account debtors and any obligors under instruments or accounts to make payments directly to the Secured Parties, on behalf of the Secured Parties, and to enforce the Debtors' rights against such account debtors and obligors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 Secured Parties may (but are not obligated to) direct any financial intermediary or any other person or entity holding any investment property to transfer the same to the Secured Parties or its designee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 Secured Parties may (but is not obligated to) transfer any or all Intellectual Property registered in the name of any Debtor at the United States Patent and Trademark Office and/or Copyright Office into the name of the Secured Parties or any designee or any purchaser 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;(b) The Secured Parties shall comply with any applicable law in connection with a disposition of Collateral and such compliance will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral. The Secured Parties may sell the Collateral without giving any warranties and may specifically disclaim such warranties. If the Secured Parties sell any of the Collateral on credit, the Debtors will only be credited with payments actually made by the purchaser. In addition, each Debtor waives any and all rights that it may have to a judicial hearing in advance of the enforcement of any of the Secured Parties' rights and remedies hereunder, including, without limitation, its right following an Event of Default to take immediate possession of the Collateral and to exercise its rights and remedies with respect 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;(c) For the purpose of enabling the Secured Parties to further exercise rights and remedies under this Section 8 or elsewhere provided by agreement or applicable law, each Debtor hereby grants to the Secured Parties, for the benefit of the Secured Parties, an irrevocable, nonexclusive license (exercisable without payment of royalty or other compensation to such Debtor) to use, license or sublicense following an Event of Default, any Intellectual Property now owned or hereafter acquired by such Debtor, and wherever the same may be located, and including in such license access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. **Applications of Proceeds**. The proceeds of any such sale, lease or other disposition of the Collateral hereunder or from payments made on account of any insurance policy insuring any portion of the Collateral shall be applied first, to the expenses of retaking, holding, storing, processing and preparing for sale, selling, and the like (including, without limitation, any taxes, fees and other costs incurred in connection therewith) of the Collateral, to the reasonable attorneys' fees and expenses incurred by the Secured Parties in enforcing the Secured Parties' rights hereunder and in connection with collecting, storing and disposing of the Collateral, and then to satisfaction of the Obligations to the Secured Parties, and to the payment of any other amounts required by applicable law, after which the Secured Parties shall pay to the applicable Debtor any surplus proceeds. If, upon the sale, license or other disposition of the Collateral, the proceeds thereof are insufficient to pay all amounts to which the Secured Parties are legally entitled, the Debtors will be liable for the deficiency, together with interest thereon, at the rate of the Default Interest (as defined in the Note), and the reasonable fees of any attorneys employed by the Secured Parties to collect such deficiency. To the extent permitted by applicable law, each Debtor waives all claims, damages and demands against the Secured Parties arising out of the repossession, removal, retention or sale of the Collateral, unless due solely to the gross negligence or willful misconduct of the Secured Parties as determined by a final judgment (not subject to further appeal) of a court of competent jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. **Securities Law Provision**. Each Debtor recognizes that Secured Parties may be limited in its ability to effect a sale to the public of all or part of the Pledged Securities by reason of certain prohibitions in the Securities Act of 1933, as amended, or other federal or state securities laws (collectively, the "<u>Securities Laws</u>"), and may be compelled to resort to one or more sales to a restricted group of purchasers who may be required to agree to acquire the Pledged Securities for their own account, for investment and not with a view to the distribution or resale thereof. Each Debtor agrees that sales so made may be at prices and on terms less favorable than if the Pledged Securities were sold to the public, and that Secured Parties have no obligation to delay the sale of any Pledged Securities for the period of time necessary to register the Pledged Securities for sale to the public under the Securities Laws. Each Debtor shall cooperate with Secured Parties in its attempt to satisfy any requirements under the Securities Laws (including, without limitation, registration thereunder if requested by Secured Parties) applicable to the sale of the Pledged Securities by Secured Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. **Costs and Expenses**. Each Debtor agrees to pay all reasonable out-of-pocket fees, costs and expenses incurred in connection with any filing required hereunder, including without limitation, any financing statements pursuant to the UCC, continuation statements, partial releases and/or termination statements related thereto or any expenses of any searches reasonably required by the Secured Parties. The Debtors shall also pay all other claims and charges which in the reasonable opinion of the Secured Parties is reasonably likely to prejudice, imperil or otherwise affect the Collateral or the Security Interests therein. The Debtors will also, upon demand, pay to the Secured Parties the amount of any and all reasonable expenses, including the reasonable fees and expenses of its counsel and of any experts and agents, which the Secured Parties may incur in connection with the creation, perfection, protection, satisfaction, foreclosure, collection or enforcement of the Security Interest and the preparation, administration, continuance, amendment or enforcement of this Agreement and pay to the Secured Parties the amount of any and all reasonable expenses, including the reasonable fees and expenses of its counsel and of any experts and agents, which the Secured Parties may incur in connection with (i) the enforcement of this Agreement, (ii) the custody or preservation of, or the sale of, collection from, or other realization upon, any of the Collateral, or (iii) the exercise or enforcement of any of the rights of the Secured Parties under the Note. Until so paid, any fees payable hereunder shall be added to the principal amount of the Note and shall bear interest at the rate of the Default Interest (as defined in the Note).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. **Responsibility for Collateral**. The Debtors assume all liabilities and responsibility in connection with all Collateral, and the Obligations shall in no way be affected or diminished by reason of the loss, destruction, damage or theft of any of the Collateral or its unavailability for any reason. Without limiting the generality of the foregoing, (a) the Secured Parties do not (i) have any duty (either before or after an Event of Default) to collect any amounts in respect of the Collateral or to preserve any rights relating to the Collateral, or (ii) have any obligation to clean-up or otherwise prepare the Collateral for sale, and (b) each Debtor shall remain obligated and liable under each contract or agreement included in the Collateral to be observed or performed by such Debtor thereunder. The Secured Parties shall not have any obligation or liability under any such contract or agreement by reason of or arising out of this Agreement or the receipt by the Secured Parties of any payment relating to any of the Collateral, nor shall the Secured Parties be obligated in any manner to perform any of the obligations of any Debtor under or pursuant to any such contract or agreement, to make inquiry as to the nature or sufficiency of any payment received by the Secured Parties in respect of the Collateral or as to the sufficiency of any performance by any party under any such contract or agreement, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which the Secured Parties may be entitled at any time or times.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. **Security Interests Absolute**. All rights of the Secured Parties and all obligations of the Debtors hereunder, shall be absolute and unconditional, irrespective of: (a) any lack of validity or enforceability of this Agreement, the Note or any agreement entered into in connection with the foregoing, or any portion hereof or thereof; (b) any change in the time, manner or place of payment or performance of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from the Note or any other agreement entered into in connection with the foregoing; (c) any exchange, release or nonperfection of any of the Collateral, or any release or amendment or waiver of or consent to departure from any other collateral for, or any guarantee, or any other security, for all or any of the Obligations; (d) any action by the Secured Parties to obtain, adjust, settle and cancel in its sole discretion any insurance claims or matters made or arising in connection with the Collateral; or (e) any other circumstance which might otherwise constitute any legal or equitable defense available to a Debtor, or a discharge of all or any part of the Security Interests granted hereby. Until the Obligations shall have been paid and performed in full, the rights of the Secured Parties shall continue even if the Obligations are barred for any reason, including, without limitation, the running of the statute of limitations or bankruptcy. Each Debtor expressly waives presentment, protest, notice of protest, demand, notice of nonpayment and demand for performance. In the event that at any time any transfer of any Collateral or any payment received by the Secured Parties hereunder shall be deemed by final order of a court of competent jurisdiction to have been a voidable preference or fraudulent conveyance under the bankruptcy or insolvency laws of the United States, or shall be deemed to be otherwise due to any party other than the Secured Parties, then, in any such event, each Debtor's obligations hereunder shall survive cancellation of this Agreement, and shall not be discharged or satisfied by any prior payment thereof and/or cancellation of this Agreement, but shall remain a valid and binding obligation enforceable in accordance with the terms and provisions hereof. Each Debtor waives all right to require the Secured Parties to proceed against any other person or entity or to apply any Collateral which the Secured Parties may hold at any time, or to marshal assets, or to pursue any other remedy. Each Debtor waives any defense arising by reason of the application of the statute of limitations to any obligation secured hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. **Term of Agreement**. This Agreement and the Security Interests shall terminate on the date on which all payments under the Note have been indefeasibly paid in full and all other Obligations have been paid or discharged; <u>provided</u>, <u>however</u>, that all indemnities of the Debtors contained in this Agreement (including, without limitation, Annex B hereto) shall survive and remain operative and in full force and effect regardless of the termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. **Power of Attorney; Further Assurances**.

&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) Each Debtor authorizes the Secured Parties, and does hereby make, constitute and appoint the Secured Parties and its officers, agents, successors or assigns with full power of substitution, as such Debtor's true and lawful attorney-in-fact, with power, in the name of the Secured Parties or such Debtor, to, after the occurrence and during the continuance of an Event of Default, (i) endorse any note, checks, drafts, money orders or other instruments of payment (including payments payable under or in respect of any policy of insurance) in respect of the Collateral that may come into possession of the Secured Parties; (ii) to sign and endorse any financing statement pursuant to the UCC or any invoice, freight or express bill, bill of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications and notices in connection with accounts, and other documents relating to the Collateral; (iii) to pay or discharge taxes, liens, security interests or other encumbrances at any time levied or placed on or threatened against the Collateral; (iv) to demand, collect, receipt for, compromise, settle and sue for monies due in respect of the Collateral; (v) to transfer any Intellectual Property or provide licenses respecting any Intellectual Property; and (vi) generally, at the option of the Secured Parties, and at the expense of the Debtors, at any time, or from time to time, to execute and deliver any and all documents and instruments and to do all acts and things which the Secured Parties deem necessary to protect, preserve and realize upon the Collateral and the Security Interests granted therein in order to effect the intent of this Agreement and the Note all as fully and effectually as the Debtors might or could do; and each Debtor hereby ratifies all that said attorney shall lawfully do or cause to be done by virtue hereof. This power of attorney is coupled with an interest and shall be irrevocable for the term of this Agreement and thereafter as long as any of the Obligations shall be outstanding. The designation set forth herein shall be deemed to amend and supersede any inconsistent provision in the Organizational Documents or other documents or agreements to which any Debtor is subject or to which any Debtor is a party. Without limiting the generality of the foregoing, after the occurrence and during the continuance of an Event of Default, the Secured Parties are specifically authorized to execute and file any applications for or instruments of transfer and assignment of any patents, trademarks, copyrights or other Intellectual Property with the United States Patent and Trademark Office and the United States Copyright 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) On a continuing basis, each Debtor will make, execute, acknowledge, deliver, file and record, as the case may be, with the proper filing and recording agencies in any jurisdiction, including, without limitation, the jurisdictions indicated on <u>Schedule B</u> attached hereto, all such instruments, and take all such action as may reasonably be deemed necessary or advisable, or as reasonably requested by the Secured Parties, to perfect the Security Interests granted hereunder and otherwise to carry out the intent and purposes of this Agreement, or for assuring and confirming to the Secured Parties the grant or perfection of a perfected security interest in all the Collateral under the UCC.

&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 Debtor hereby irrevocably appoints the Secured Parties as such Debtor's attorney-in-fact, with full authority in the place and instead of such Debtor and in the name of such Debtor, from time to time in the Secured Parties' discretion, to take any action and to execute any instrument which the Secured Parties may deem necessary or advisable to accomplish the purposes of this Agreement, including the filing, in its sole discretion, of one or more financing or continuation statements and amendments thereto, relative to any of the Collateral without the signature of such Debtor where permitted by law, which financing statements may (but need not) describe the Collateral as "all assets" or "all personal property" or words of like import, and ratifies all such actions taken by the Secured Parties. This power of attorney is coupled with an interest and shall be irrevocable for the term of this Agreement and thereafter as long as any of the Obligations shall be outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. **Notices**. All notices, requests, demands and other communications hereunder shall be subject to the notice provision of the Purchase Agreement (as such term is defined in the Note).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. **Other Security**. To the extent that the Obligations are now or hereafter secured by property other than the Collateral or by the guarantee, endorsement or property of any other person, firm, corporation or other entity, then the Secured Parties shall have the right, in its sole discretion, to pursue, relinquish, subordinate, modify or take any other action with respect thereto, without in any way modifying or affecting any of the Secured Parties' rights and remedies hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. [Intentionally Omitted].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19. **Miscellaneous**.

&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) No course of dealing between the Debtors and the Secured Parties, nor any failure to exercise, nor any delay in exercising, on the part of the Secured Parties, any right, power or privilege hereunder or under the Note shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or thereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

&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) All of the rights and remedies of the Secured Parties with respect to the Collateral, whether established hereby or by the Note or by any other agreements, instruments or documents or by law shall be cumulative and may be exercised singly or concurrently.

&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) This Agreement, together with the exhibits and schedules hereto, 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 this Agreement and the exhibits and schedules hereto. 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 Debtors and the Secured Parties holding 67% or more of the principal amount of Note then outstanding, or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought.

&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) 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.

&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) 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.

&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 be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Debtors may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Secured Parties. The Secured Parties may assign any or all of its rights under this Agreement to any party to whom such Secured Parties assigns or transfers any Obligations, provided such transferee agrees in writing to be bound, with respect to the transferred Obligations, by the provisions of this Agreement that apply to the "Secured 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;(g) Each party shall take such further action and execute and deliver such further documents as may be necessary or appropriate in order to carry out the provisions and 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;(h) The Debtors and Secured Parties shall submit all Claims (as defined in Exhibit C of the Purchase Agreement) (the "Claims") arising under this Agreement or any other agreement between the parties and their affiliates or any Claim relating to the relationship of the parties to binding arbitration pursuant to the arbitration provisions set forth in Exhibit C of the Purchase Agreement (the "Arbitration Provisions"). The Debtors and Secured Parties hereby acknowledge and agree that the Arbitration Provisions are unconditionally binding on the Debtors and Secured Parties hereto and are severable from all other provisions of this Agreement. By executing this Agreement, Debtors represents, warrants and covenants that Debtors have reviewed the Arbitration Provisions carefully, consulted with legal counsel about such provisions (or waived its right to do so), understands that the Arbitration Provisions are intended to allow for the expeditious and efficient resolution of any dispute hereunder, agrees to the terms and limitations set forth in the Arbitration Provisions, and that Debtors will not take a position contrary to the foregoing representations. Debtors acknowledge and agree that Secured Parties may rely upon the foregoing representations and covenants of Debtors regarding the Arbitration Provisions. This Agreement shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Agreement shall be governed by, the internal laws of the State of Nevada, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Nevada or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Nevada. The Debtors and Secured Parties consent to and expressly agree that the exclusive venue for arbitration of any Claims arising under this Agreement or any other agreement between the Debtors and Secured Parties or their respective affiliates (including but not limited to the Transaction Documents (as defined in the Purchase Agreement)) or any Claim relating to the relationship of the Debtors and Secured Parties or their respective affiliates shall be in San Diego County, State of California. Without modifying the Debtors' and Secured Parties' obligations to resolve disputes hereunder pursuant to the Arbitration Provisions, for any litigation arising in connection with any of the Transaction Documents, each party hereto hereby (i) consents to and expressly submits to the exclusive personal jurisdiction of any state or federal court sitting in San Diego County, State of California, (ii) expressly submits to the exclusive venue of any such court for the purposes hereof, (iii) agrees to not bring any such action outside of any state or federal court sitting in San Diego County, State of California, and (iv) waives any claim of improper venue and any claim or objection that such courts are an inconvenient forum or any other claim, defense or objection to the bringing of any such proceeding in such jurisdiction or to any claim that such venue of the suit, action or proceeding is improper. Notwithstanding anything in the foregoing to the contrary, nothing herein shall limit, or shall be deemed or construed to limit, the ability of the Secured Parties to realize on any collateral or any other security, or to enforce a judgment or other court ruling in favor of the Secured Parties, including through a legal action in any court of competent jurisdiction. The Debtors hereby irrevocably waive, and agree not to assert in any suit, action or proceeding, any objection to jurisdiction and venue of any action instituted hereunder, any claim that it is not personally subject to the jurisdiction of any such court, and any claim that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper (including but not limited to based upon *forum non conveniens*). **THE DEBTORS 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 WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTIONS CONTEMPLATED HEREBY**. The Debtors irrevocably waive personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other agreement, certificate, instrument or document contemplated hereby or thereby by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to Debtors 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 law. The prevailing party in any action or dispute brought in connection with this Agreement or any other agreement, certificate, instrument or document contemplated hereby or thereby shall be entitled to recover from the other party its reasonable attorney's fees and costs. 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.

&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 may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by electronic transmission, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such electronic signature were the original 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;(j) All Debtors shall jointly and severally be liable for the obligations of each Debtor to the Secured Parties 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) Each Debtor shall indemnify, reimburse and hold harmless the Secured Parties and their respective partners, members, managers, shareholders, officers, directors, attorneys, employees, and agents (and any other persons with other titles that have similar functions) (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, "<u>Indemnitees</u>") 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 this Agreement or the Collateral, except any such losses, claims, liabilities, damages, penalties, suits, costs and expenses which result from the gross negligence or willful misconduct of the Indemnitee as determined by a final, nonappealable decision of a court of competent jurisdiction. This indemnification provision is in addition to, and not in limitation of, any other indemnification provision in the Note, the Purchase Agreement (as such term is defined in the Note) or any other agreement, instrument or other document executed or delivered in connection herewith or 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;(l) Nothing in this Agreement shall be construed to subject the Secured Parties to liability as a partner in any Debtor or any if its direct or indirect subsidiaries that is a partnership or as a member in any Debtor or any of its direct or indirect subsidiaries that is a limited liability company, nor shall the Secured Parties be deemed to have assumed any obligations under any partnership agreement or limited liability company agreement, as applicable, of any such Debtor or any of its direct or indirect subsidiaries or otherwise, unless and until any such Secured Parties exercise its right to be substituted for such Debtor as a partner or member, as applicable, pursuant 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;(m) To the extent that the grant of the security interest in the Collateral and the enforcement of the terms hereof require the consent, approval or action of any partner or member, as applicable, of any Debtor or any direct or indirect subsidiary of any Debtor or compliance with any provisions of any of the Organizational Documents, the Debtors hereby grant such consent and approval and waive any such noncompliance with the terms of said documents.

[SIGNATURE PAGE FOLLOW]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on the day and year first above written.

---

| | |
|:---|:---|
| **ALTERNATIVE BALLISTICS CORPORATION** | **ALTERNATIVE BALLISTICS CORPORATION** |
| By: | */s/ Steven Luna* |
| Name: | Steven Luna |
| Title: | Chief Executive Officer |

---

---

| | |
|:---|:---|
| **LENDSPARK CORPORATION** | **LENDSPARK CORPORATION** |
| By: | */s/ David Clark* |
| Name: | David Clark |
| Title: | Principal |

---

**SCHEDULE A**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The following are all other locations in the United States of America or any other location in which the Company maintains any books or records relating to any of the Collateral consisting of accounts, instruments, chattel paper, general intangibles or mobile goods:

<u>Address</u> <u>County</u> <u>State/Country</u> <br>5940 S. Rainbow Blvd, Las Vegas, NV 89118 Clark NV/USA

Source: UCC §9-301(2) and (3).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The following are all other places of business of the Company in the United States of America or any other location:

<u>Address</u> <u>County</u> <u>State/Country</u> <br>None.

Source: UCC §9-301(2) and (3).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The following are all other locations in the United States of America or any other location where any of the Collateral consisting of inventory or equipment is located:

---

| | | |
|:---|:---|:---|
| Address | County | State/Country |
| 5940 S. Rainbow Blvd, Las<br> Vegas, NV 89118 | Clark | NV/USA |
| <br> 4490 Murphy Canyon<br> Road, D-179, San Diego,<br> CA 92123 | <br> San Diego | <br> CA/USA |

---

Source: UCC §§-301(2) and (3).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The following are the names and addresses of all persons or entities other than the Company, such as lessees, consignees, warehousemen or purchasers of chattel paper, which have possession or are intended to have possession of any of the Collateral consisting of instruments, chattel paper, inventory or equipment:

<u>Name</u> <u>Mailing Address</u> <u>County</u> <u>State/Country</u> <br>None.

Source: UCC §§9-301(2) and (3), 9-312 and 9-313.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The following is a complete list of all bank accounts (including securities and commodities accounts) maintained by the Company (*provide name and address of depository bank, type of account and account number*):

---

| | | |
|:---|:---|:---|
| Depository Bank | Bank Address | Acct. No. |
| US Bank | 16083 San Dieguito Road, Ste. F, Rancho Santa Fe, CA 92067<br>Checking | 157523676557 |
| US Bank | 16083 San Dieguito Road, Ste. F, Rancho Santa Fe, CA 92067<br>Checking | 157530653367 |
| Bank of America | 400 S Rampart Blvd., Las Vegas, NV 89145<br>Checking | 501019710178 |
| Bank of America | 400 S Rampart Blvd., Las Vegas, NV 89145 Checking | 501025628814 |

---

**SCHEDULE B**

<u>Debtor Name</u> <u>Other Names</u> <u>Tax Identification Number</u> <u>Jurisdiction of Organization</u> <br> Alternative Ballistics Corporation None. 85-2764555 Nevada

**SCHEDULE C**

<u>Other Liens and Related Filings</u>

None

**SCHEDULE D**

<u>Patents and Trademarks</u>

**<u>Patents</u>**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Patent <br> Application No.** | **Patent No.** | **Patent Name** | **Date Filed** | **Date Issued** | **Location** |
| **11/353875** | 7526999 | Less-Lethal Force Device | 2/13/2006 | 5/5/2009 | USPTO |
| **14/183455** | 9612074 | Less-Lethal Force Device-Impact Ratio | 2/18/2014 | 4/4/2017 | USPTO |
| **14/598555 (continuation of 14/183455)** | 9823033 | Less-Lethal Force Device-Impact Ratio | 1/16/2015 | 11/21/2017 | USPTO |
| **15/386281** | 10295291 | Less-Lethal Force Device | 12/12/2016 | 5/21/2019 | USPTO |
| **17/644060** | 11566876 | Bullet Capturing Ballistic Slugs | 12/13/2021 | 1/31/2023 | USPTO |
| **BR 10 2022 008832 2** | 102022008832-2 | Bullet Capturing Ballistic Slugs | 5/6/2022 | 1/7/2025 | Brazil |
| **1-2022-02498** | Pending | Bullet Capturing Slugs | 4/21/2022 | Pending | Vietnam |
| **20220103403** | AR127939B1 | Bullet Capturing Slugs | 12/13/2022 | 11/28/2024 | Argentina |
| **2022-000260** | A060137 | Bullet Capturing Slugs | 12/13/2022 | 10/24/2024 | Venezuela |
| **22107593** | Pending | Bullet Capturing Slugs | 12/13/2022 | Pending | Paraguay |
| **PCT/US2022/81356** | N/A | International Patent Application for Bullet Capturing Slugs | 12/12/2022 | 2/1/2023 (International Artwork Search Complete) | USPTO/International Bureau |
| **18/146953** | 11835322 | Continuation Patent Application | 12/27/2022 | 12/5/2023 | USPTO |
| **18/499714** | 12188750 | Continuation Patent Application | 11/1/2023 | 1/7/2025 | USPTO |
| **18/977428** | Pending | Continuation Patent Application | 12/11/2024 | Pending | USPTO |
| **A50485/2024** | Pending | Bullet Capturing Slugs | 6/13/2024 | Pending | Austria |
| **3240925** | 3240925 | Bullet Capturing Slugs | 6/12/2024 | 10/7/2025 | Canada |
| **313532** | Pending | Bullet Capturing Slugs | 6/13/2024 | Pending | Israel |
| **MX/a/2024/007289** | Pending | Bullet Capturing Slugs | 6/13/2024 | Pending | Mexico |
| **95022-01** | Pending | Bullet Capturing Slugs | 6/13/2024 | Pending | Panama |
| **1120243434** | Pending | Bullet Capturing Slugs | 6/8/2024 | Pending | Saudi Arabia |
| **2022413959** | 2022413959 | Bullet Capturing Slugs | 7/12/2024 | 11/27/2025 | Australia |
| **NC2024/0009084** | Pending | Bullet Capturing Slugs | 7/9/2024 | Pending | Colombia |
| **22908593.1** | Pending | Bullet Capturing Slugs | 7/11/2024 | Pending | Europe |
| **2024/05374** | 2024/05374 | Bullet Capturing Slugs | 7/10/2024 | 9/25/2024 | South Africa |

---

**<u>Trademarks</u>**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Title** | **Serial No.** | **Registration No.** | **G & S** |
| **USPTO** | THE ALTERNATIVE | 77410543 | 3519634 | Less-lethal projectile, namely, a rounded metal block encapsulated in rubber, discharged from a pistol to temporarily incapacitate a person |
| **USPTO** | ![](ex6-29_001.jpg)<br>ALTERNATIVE BALLISTICS LOGO [old version] | 85667538 | 4712832 | Less-lethal projectile discharged from a pistol or other firearm |
| **USPTO** | ALTERNATIVE BALLISTICS LOGO 2<br>![](ex6-29_002.jpg)<br>| 90411439 | Pending | Amended 4/8/2022 to: Firearm attachments having a mount for attaching bullet capturing projectiles and bullet capturing projectiles, sold as a unit or individually<br> [Originally filed as: Weaponry, namely, less-lethal projectile discharged from a pistol or other firearm] |
| **USPTO** | THE ALTERNATIVE | 97/352515 | Pending | Firearm attachments having a mount for attaching bullet capturing projectiles and bullet capturing projectiles, sold as a unit or individually |
| **USPTO** | ALTERNATIVE BALLISTICS | 97/352517 | Pending | Firearm attachments having a mount for attaching bullet capturing projectiles and bullet capturing projectiles, sold as a unit or individually |
| **USPTO** | ALTERNATIVE BALLISTICS LOGO B&W | 97/352524 | Pending | Firearm attachments having a mount for attaching bullet capturing projectiles and bullet capturing projectiles, sold as a unit or individually |
| **[Madrid System\WIPO]** | THE ALTERNATIVE | 1662198 | 1662198 | Firearm attachments having a mount for bullet capturing projectiles and bullet capturing projectiles, sold as a unit |
| **Brazil** | THE ALTERNATIVE | 501662198 | 501662198 | Firearm attachments having a mount for bullet capturing projectiles and bullet capturing projectiles, sold as a unit |
| **Vietnam** | THE ALTERNATIVE | 1662198 | 1662198 | Firearm attachments having a mount for bullet capturing projectiles and bullet capturing projectiles, sold as a unit |
| **[Madrid System\WIPO]** | ALTERNATIVE BALLISTICS | 1662593 | 1662593 | Firearm attachments having a mount for bullet capturing projectiles and bullet capturing projectiles, sold as a unit |
| **Brazil** | ALTERNATIVE BALLISTICS | 501662593 | 501662593 | Firearm attachments having a mount for bullet capturing projectiles and bullet capturing projectiles, sold as a unit |
| **Vietnam** | ALTERNATIVE BALLISTICS | 1662593 | 1662593 | Firearm attachments having a mount for bullet capturing projectiles and bullet capturing projectiles, sold as a unit |
| **[Madrid System\WIPO]** | ALTERNATIVE BALLISTICS LOGO B&W | 1662596 | 1662596 | Firearm attachments having a mount for bullet capturing projectiles and bullet capturing projectiles, sold as a unit |
| **Brazil** | ALTERNATIVE BALLISTICS LOGO B&W | 501662596 | 501662596 | Firearm attachments having a mount for bullet capturing projectiles and bullet capturing projectiles, sold as a unit |
| **Vietnam** | ALTERNATIVE BALLISTICS LOGO B&W | 1662596 | 1662596 | Firearm attachments having a mount for bullet capturing projectiles and bullet capturing projectiles, sold as a unit |
| USPTO | THE HD | 99097386 | 99097386 | Firearm attachments, namely, mounts for attaching a bullet capture devise to capture a bullet in a less-lethal spherical projectile; Less-lethal projectiles, namely,<br> a bullet capturing metal sphere that uses the kinetic energy of a firearm to temporarily incapacitate a target. |
| USPTO | THE HOME DEFENSE | 99097408 | 99097408 | Firearm attachments, namely, mounts for attaching a bullet capture devise to capture a bullet in a less-lethal spherical projectile; Less-lethal projectiles, namely,<br> a bullet capturing metal sphere that uses the kinetic energy of a firearm to temporarily incapacitate a target. |

---

**SCHEDULE E**

<u>Equity Interests of Guarantors</u>

<u>Schedule E-1</u>

<u>Pledged Securities:</u>

---

| | | | |
|:---|:---|:---|:---|
| <br> Issuer | <br> Record<br> Owner | <br> Class of<br> Shares  | Percentage Ownership |
| None. |  |  |  |

---

**ANNEX A**

**to**

**SECURITY**

**AGREEMENT**

**FORM OF ADDITIONAL DEBTOR JOINDER**

Security Agreement dated as of March 13, 2026 made by

Alternative Ballistics Corporation

and its subsidiaries party thereto from time to time, as Debtors

to and in favor of

the Secured Parties identified therein (the "<u>Security Agreement</u>")

Reference is made to the Security Agreement as defined above; capitalized terms used herein and not otherwise defined herein shall have the meanings given to such terms in, or by reference in, the Security Agreement.

The undersigned hereby agrees that upon delivery of this Additional Debtor Joinder to the Secured Parties referred to above, the undersigned shall (a) be an Additional Debtor under the Security Agreement, (b) have all the rights and obligations of the Debtors under the Security Agreement as fully and to the same extent as if the undersigned was an original signatory thereto and (c) be deemed to have made the representations and warranties set forth therein as of the date of execution and delivery of this Additional Debtor Joinder. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE UNDERSIGNED SPECIFICALLY GRANTS TO THE SECURED PARTIES A SECURITY INTEREST IN THE COLLATERAL AS MORE FULLY SET FORTH IN THE SECURITY AGREEMENT AND ACKNOWLEDGES AND AGREES TO THE WAIVER OF JURY TRIAL PROVISIONS SET FORTH THEREIN.

Attached hereto are supplemental and/or replacement Schedules to the Security Agreement, as applicable.

An executed copy of this Joinder shall be delivered to the Secured Parties, and the Secured Parties may rely on the matters set forth herein on or after the date hereof. This Joinder shall not be modified, amended or terminated without the prior written consent of the Secured Parties.

IN WITNESS WHEREOF, the undersigned has caused this Joinder to be executed in the name and on behalf of the undersigned.

---

| |
|:---|
| [Name of Additional Debtor] |
| By: |
| Name: |
| Title: |
| Address: |

---

Dated:

## Add

**Exhibit 6.30**

**SECURITIES PURCHASE AGREEMENT**

This **SECURITIES PURCHASE AGREEMENT** (this "Agreement"), dated as of March 13, 2026, by and between **ALTERNATIVE BALLISTICS CORPORATION**, a Nevada corporation, with headquarters located at 5940 S. Rainbow Blvd., Las Vegas, NV 89118 (the "Company"), and **LENDSPARK CORPORATION**, a California corporation, with its address at 5451 Avenida Encinitas, Suite B, Carlsbad, CA 92008 (the "Buyer").

**WHEREAS:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. The Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the "1933 Act") and Rule 506(b) promulgated by the United States Securities and Exchange Commission (the "SEC") under the 1933 Act;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Buyer desires to purchase from the Company, and the Company desires to issue and sell to the Buyer, upon the terms and conditions set forth in this Agreement, a secured promissory note of the Company, in the aggregate principal amount of $550,000.00 (as the principal amount thereof may be increased pursuant to the terms thereof, and together with any note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance with the terms thereof, in the form attached hereto as Exhibit A, the "Note"), convertible into shares of common stock, $0.001 par value per share, of the Company (the "Common Stock"), upon the terms and subject to the limitations and conditions set forth in such Note; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. The Company wishes to issue a common stock purchase warrant to purchase 166,667 shares of Common Stock at an initial price per share of $5.00 (the "Warrants") to the Buyer as a commitment fee for the Buyer's execution of this Agreement, which shall be earned in full as of the Closing Date, as further provided herein; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. In connection with this Agreement, the Company and the Buyer have entered into a security agreement (the "Security Agreement") on the date of this Agreement, a form of which is attached hereto as Exhibit D.

**NOW THEREFORE**, in consideration of the foregoing and of the agreements and covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the Buyer hereby agree 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;1. <u>Purchase and Sale of Note.</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;a. <u>Purchase of Note.</u> On the Closing Date (as defined below), the Company shall issue and sell to the Buyer, and the Buyer agrees to purchase from the Company, the Note, as further provided herein. As used in this Agreement, the term "business day" shall mean any day other than a Saturday, Sunday, or a day on which commercial banks in the city of New York, New York are authorized or required by law or executive order to remain closed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Form of Payment.</u> On the Closing Date: (i) the Buyer shall pay the purchase price of $500,000.00 (the "Purchase Price") for the Note, to be issued and sold to it at the Closing (as defined below), by wire transfer of immediately available funds to the Company, in accordance with the Company's written wiring instructions, against delivery of the Note, and (ii) the Company shall deliver such duly executed Note and Warrants on behalf of the Company, to the Buyer, against delivery of such Purchase Price. On the Closing Date, the Buyer shall withhold a non-accountable sum of (i) $7,500.00 from the Purchase Price to cover the Buyer's legal fees and (ii) $9,000.00 from the Purchase Price to cover Buyer's due diligence fees in connection with the transactions contemplated by this Agreement. In addition to the expenses covered in the aforementioned sentence, the Company and Buyer acknowledge and agree that the Company previously reimbursed the Buyer for $7,500.00 in legal fees, which was paid to Buyer's legal counsel prior to the date 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. <u>Closing Date.</u> Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section 6 and Section 7 below, the date and time of the issuance and sale of the Note pursuant to this Agreement (the "Closing Date") shall be on the date that the Purchase Price for the Note is paid by Buyer pursuant to terms 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. <u>Closing</u>. The closing of the transactions contemplated by this Agreement (the "Closing") shall occur on the Closing Date at such location as may be agreed to by the parties (including via exchange of electronic signatures).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Warrants.</u> On or before the Closing Date, the Company shall issue the Warrants to the Buyer, which shall be earned in full as of the Closing 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;2. <u>Buyer's Representations and Warranties.</u> The Buyer represents and warrants to the Company as of the Closing Date that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Investment Purpose.</u> As of the Closing Date, the Buyer is purchasing the Note and Warrants (the Note, Warrants, shares of Common Stock issuable upon conversion of or otherwise pursuant to the Note (the "Conversion Shares"), and shares of Common Stock issuable upon exercise of or otherwise pursuant to the Warrants (the "Exercise Shares") shall collectively be referred to herein as the "Securities") for its own account and not with a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under the 1933 Act; <u>provided</u>, <u>however</u>, that by making the representations herein, the Buyer does not agree to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption under the 1933 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. <u>Accredited Investor Status.</u> The Buyer is an "accredited investor" as that term is defined in Rule 501(a) of Regulation D (an "Accredited 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. <u>Reliance on Exemptions.</u> The Buyer understands that the Securities are being offered and sold to it in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and the Buyer's compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire the 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. <u>Information.</u> The Buyer and its advisors, if any, have been, and for so long as the Note remains outstanding will continue to be, furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities which have been requested by the Buyer or its advisors. The Buyer and its advisors, if any, have been, and for so long as the Note remains outstanding will continue to be, afforded the opportunity to ask questions of the Company regarding its business and affairs. Notwithstanding the foregoing, the Company has not disclosed to the Buyer any material nonpublic information regarding the Company or otherwise and will not disclose such information unless such information is disclosed to the public prior to or promptly following such disclosure to the Buyer. Neither such inquiries nor any other due diligence investigation conducted by Buyer or any of its advisors or representatives shall modify, amend or affect Buyer's right to rely on the Company's representations and warranties contained in Section 3 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;e. <u>Governmental Review.</u> The Buyer understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. <u>Transfer or Re-sale.</u> The Buyer understands that (i) the sale or resale of the Securities has not been and is not being registered under the 1933 Act or any applicable state securities laws, and the Securities may not be transferred unless (a) the Securities are sold pursuant to an effective registration statement under the 1933 Act, (b) the Buyer shall have delivered to the Company, at the cost of the Company, an opinion of counsel (which may be the Legal Counsel Opinion (as defined below)) that shall be in form, substance and scope customary for opinions of counsel in comparable transactions to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from such registration, which opinion shall be accepted by the Company, (c) the Securities are sold or transferred to an "affiliate" (as defined in Rule 144 promulgated under the 1933 Act (or a successor rule) ("Rule 144")) of the Buyer who agrees to sell or otherwise transfer the Securities only in accordance with this Section 2(f) and who is an Accredited Investor, (d) the Securities are sold pursuant to Rule 144 or other applicable exemption, or (e) the Securities are sold pursuant to Regulation S under the 1933 Act (or a successor rule) ("Regulation S"), and the Buyer shall have delivered to the Company, at the cost of the Company, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions, which opinion shall be accepted by the Company; (ii) any sale of such Securities made in reliance on Rule 144 may be made only in accordance with the terms of said Rule and further, if said Rule is not applicable, any re-sale of such Securities under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other person is under any obligation to register such Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder (in each case). Notwithstanding the foregoing or anything else contained herein to the contrary, the Securities may be pledged in connection with a <u>bona fide</u> margin account or other lending arrangement secured by the Securities, and such pledge of Securities shall not be deemed to be a transfer, sale or assignment of the Securities hereunder, and the Buyer in effecting such pledge of Securities shall not be required to provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant to this Agreement or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Legends.</u> The Buyer understands that until such time as the Note, Warrants, Conversion Shares, and/or Exercise Shares, have been registered under the 1933 Act or may be sold pursuant to Rule 144, Rule 144A under the 1933 Act, Regulation S, or other applicable exemption without any restriction as to the number of securities as of a particular date that can then be immediately sold, the Securities may bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such Securities):

**"NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE/EXERCISABLE] HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144, RULE 144A, REGULATION S, OR OTHER APPLICABLE EXEMPTION UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES."**

The legend set forth above shall be removed and the Company shall issue a certificate or book entry statement for the applicable shares of Common Stock without such legend to the holder of any Security upon which it is stamped or (as requested by such holder) issue the applicable shares of Common Stock to such holder by electronic delivery by crediting the account of such holder's broker with The Depository Trust Company ("**DTC**"), if, unless otherwise required by applicable state securities laws, (a) such Security is registered for sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144, Rule 144A, Regulation S, or other applicable exemption without any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) the Company or the Buyer provides the Legal Counsel Opinion (as contemplated by and in accordance with Section 4(l) hereof) to the effect that a public sale or transfer of such Security may be made without registration under the 1933 Act, which opinion shall be accepted by the Company so that the sale or transfer is effected. The Company shall be responsible for the fees of its transfer agent and all DTC fees associated with any such issuance. The Buyer agrees to sell all Securities, including those represented by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any. In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144, Rule 144A, Regulation S, or other applicable exemption at the Deadline (as defined in the Note), it will be considered an Event of Default pursuant to Section 3.2 of the Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h. <u>Authorization; Enforcement.</u> This Agreement has been duly and validly authorized by the Buyer and has been duly executed and delivered on behalf of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally and except as may be limited by the exercise of judicial discretion in applying principles of equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Representations and Warranties of the Company.</u> The Company represents and warrants to the Buyer as of the Closing Date that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Organization and Qualification.</u> The Company and each of its Subsidiaries (as defined below), if any, is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated or formed, with full power and authority (corporate and other) to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted. The SEC Documents set forth a list of all of the Subsidiaries of the Company and the jurisdiction in which each is incorporated. The Company and each of its Subsidiaries is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which its ownership or use of property or the nature of the business conducted by it makes such qualification necessary except where the failure to be so qualified or in good standing would not have a Material Adverse Effect. "Material Adverse Effect" means any material adverse effect on the business, operations, assets, financial condition or prospects of the Company or its Subsidiaries, if any, taken as a whole, or on the transactions contemplated hereby or by the agreements or instruments to be entered into in connection herewith. "Subsidiaries" means any corporation or other organization, whether incorporated or unincorporated, in which the Company owns, directly or indirectly, any equity or other ownership interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Authorization; Enforcement.</u> The Company and Subsidiaries have all requisite corporate power and authority to enter into and perform the Transaction Documents and to consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance with the terms hereof and thereof. The Company represents and warrants that (i) the execution and delivery of the Transaction Documents, Warrants, the Note, Conversion Shares, and the Exercise Shares by the Company and the consummation by it of the transactions contemplated hereby and thereby (including without limitation, the issuance of the Note, Warrants, as well as the issuance and reservation for issuance of the Conversion Shares and Exercise Shares issuable upon conversion of the Note and/or exercise of the Warrants) have been duly authorized by the Company's Board of Directors and no further consent or authorization of the Company, its Board of Directors, its shareholders, or its debt holders is required, (ii) the Transaction Documents (together with any other instruments executed in connection herewith or therewith) have been duly executed and delivered by the Company and Subsidiaries by its authorized representatives, and such authorized representatives are the true and official representative with authority to sign the Transaction Documents and the other instruments documents executed in connection herewith or therewith and bind the Company and Subsidiaries accordingly, and (iii) the Transaction Documents constitute, and upon execution and delivery by the Company and Subsidiaries as applicable, each of such instruments will constitute, a legal, valid and binding obligation of the Company and Subsidiaries, enforceable against the Company and Subsidiaries 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. <u>Capitalization; Governing Documents.</u> As of March 13, 2026, the authorized capital stock of the Company consists of: 50,000,000 authorized shares of Common Stock, of which 31,776,246 shares were issued and outstanding, and 2,000,000 authorized shares of preferred stock (of which 400,000 shares of Series A non-convertible preferred stock were issued and outstanding). All of such outstanding shares of capital stock of the Company, the Conversion Shares, and the Exercise Shares are, or upon issuance will be, duly authorized, validly issued, fully paid and non-assessable. No shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company. As of the effective date of this Agreement, except as set forth on Schedule 3.c. and other than as publicly announced prior to such date and reflected in the SEC Documents of the Company (i) there are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act and (iii) there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of any of the Securities. The Company has furnished to the Buyer true and correct copies of the Company's Certificate of Incorporation as in effect on the date hereof ("Certificate of Incorporation"), the Company's By-laws, as in effect on the date hereof (the "By-laws"), and the terms of all securities convertible into or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. <u>Issuance of Conversion Shares and Exercise Shares.</u> The Conversion Shares and Exercise Shares are duly authorized and reserved for issuance and, upon conversion of the Note and/or exercise of the Warrants in accordance with its terms, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Company and will not impose personal liability upon the holder 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. <u>Issuance of Warrants.</u> The issuance of the Warrants are duly authorized and will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Company and will not impose personal liability upon the holder 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. <u>Acknowledgment of Dilution.</u> The Company understands and acknowledges the potentially dilutive effect of the Conversion Shares and Exercise Shares to the Common Stock upon the conversion of the Note and/or exercise of the Warrants. The Company further acknowledges that its obligation to issue, upon conversion of the Note and/or exercise of the Warrants, the Conversion Shares and/or Exercise Shares, are absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. <u>Security Agreement; No Conflicts.</u> The Note shall be a secured obligation of the Company pursuant to the terms of the Security Agreement and Note. The execution, delivery and performance of the Transaction Documents by the Company and Subsidiaries, and the consummation by the Company and Subsidiaries of the transactions contemplated hereby and thereby (including, without limitation, the issuance and reservation for issuance of the Conversion Shares and Exercise Shares) will not (i) conflict with or result in a violation of any provision of the Certificate of Incorporation or By-laws, or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both could become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, note, evidence of indebtedness, indenture, patent, patent license or instrument to which the Company or any of 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 and regulations of any self-regulatory organizations to which the Company or its securities is subject) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect), or (iv) trigger any anti-dilution and/or ratchet provision contained in any other contract in which the Company is a party thereto or any security issued by the Company. Neither the Company nor any of its Subsidiaries is in violation of its Certificate of Incorporation, By-laws or other organizational documents and neither the Company nor any of its Subsidiaries is in default (and no event has occurred which with notice or lapse of time or both could put the Company or any of its Subsidiaries in default) under, and neither the Company nor any of its Subsidiaries has taken any action or failed to take any action that would give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party or by which any property or assets of the Company or any of its Subsidiaries is bound or affected, except for possible defaults as would not, individually or in the aggregate, have a Material Adverse Effect. The businesses of the Company and its Subsidiaries, if any, are not being conducted, and shall not be conducted so long as the Buyer owns any of the Securities, in violation of any law, ordinance or regulation of any governmental entity. Except as specifically contemplated by this Agreement and as required under the 1933 Act and any applicable state securities laws, the Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court, governmental agency, regulatory agency, self-regulatory organization or stock market or any third party in order for it to execute, deliver or perform any of its obligations under this Agreement and the Note in accordance with the terms hereof or thereof or to issue and sell the Note or Securities in accordance with the terms hereof and, upon conversion of the Note and/or exercise of the Warrants, issue Conversion Shares and/or Exercise Shares as applicable. All consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof. The Company is not in violation of the listing requirements of the Principal Market (as defined herein) and does not reasonably anticipate that the Common Stock will be delisted by the Principal Market in the foreseeable future. The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing. The "Principal Market" shall mean the principal securities exchange or trading market where such Common Stock is listed or traded, including but not limited to any tier of the OTC Markets, any tier of the NASDAQ Stock Market (including NASDAQ Capital Market), or the NYSE American, or any successor to such markets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>SEC Documents; Financial Statements.</u> The Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the "1934 Act") (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements and schedules thereto and documents (other than exhibits to such documents) incorporated by reference therein, being hereinafter referred to herein as the "SEC Documents"). As of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained 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 light of the circumstances under which they were made, not misleading. None of the statements made in any such SEC Documents is, or has been, required to be amended or updated under applicable law (except for such statements as have been amended or updated in subsequent filings prior the date hereof). As of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with United States generally accepted accounting principles, consistently applied, during the periods involved and fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). Except as set forth in the financial statements of the Company included in the SEC Documents, the Company has no liabilities, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent to June 30, 2025, and (ii) obligations under contracts and commitments incurred in the ordinary course of business and not required under generally accepted accounting principles to be reflected in such financial statements, which, individually or in the aggregate, are not material to the financial condition or operating results of the Company. The Company is subject to the reporting requirements of the 1934 Act. The Company has never been a "shell company" as described in Rule 144(i)(1)(i).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Absence of Certain Changes</u>. Since June 30, 2025, there has been no material adverse change and no material adverse development in the assets, liabilities, business, properties, operations, financial condition, results of operations, prospects or 1934 Act reporting status of the Company or any of its 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j. <u>Absence of Litigation.</u> Except as set forth on Schedule 3.j., there is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries, threatened against or affecting the Company or any of its Subsidiaries, or their officers or directors in their capacity as such, that could have a Material Adverse Effect. The SEC Documents contain a complete list and summary description of any pending or, to the knowledge of the Company, threatened proceeding against or affecting the Company or any of its Subsidiaries, without regard to whether it would have a Material Adverse Effect. The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Intellectual Property.</u> The Company and each of its Subsidiaries owns or possesses the requisite licenses or rights to use all patents, patent applications, patent rights, inventions, know-how, trade secrets, trademarks, trademark applications, service marks, service names, trade names and copyrights ("Intellectual Property") necessary to enable it to conduct its business as now operated (and, as presently contemplated to be operated in the future); to the best of the Company's knowledge, there is no claim or action by any person pertaining to, or proceeding pending, or to the Company's knowledge threatened, which challenges the right of the Company or of a Subsidiary with respect to any Intellectual Property necessary to enable it to conduct its business as now operated (and, as presently contemplated to be operated in the future); to the best of the Company's knowledge, the Company's or its Subsidiaries' current and intended products, services and processes do not infringe on any Intellectual Property or other rights held by any person; and the Company is unaware of any facts or circumstances which might give rise to any of the foregoing. The Company and each of its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of their Intellectual Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>No Materially Adverse Contracts, Etc.</u> To the best of the Company's knowledge, neither the Company nor any of its Subsidiaries is subject to any charter, corporate or other legal restriction, or any judgment, decree, order, rule or regulation which in the judgment of the Company's officers has or is expected in the future to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is a party to any contract or agreement which in the judgment of the Company's officers has or is 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;m. <u>Tax Status.</u> The Company and each of its Subsidiaries has made or filed all federal, state and foreign income and all other tax returns (or extensions), reports and declarations required by any jurisdiction to which it is subject (unless and only to the extent that the Company and each of its Subsidiaries has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported taxes) and has 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 has set aside on its books provisions reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim. The Company has not executed a waiver with respect to the statute of limitations relating to the assessment or collection of any foreign, federal, state or local tax. None of the Company's tax returns is presently being audited by any taxing authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Transactions with Affiliates.</u> Except for arm's length transactions pursuant to which the Company or any of its Subsidiaries makes payments in the ordinary course of business upon terms no less favorable than the Company or any of its Subsidiaries could obtain from third parties, except as set forth on Schedule 3.n., and other than the grant of stock options described in the SEC Documents, none of the officers, directors, or employees of the Company is presently a party to any transaction with the Company or any of its Subsidiaries (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, director or such employee or, to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Disclosure.</u> All information relating to or concerning the Company or any of its Subsidiaries set forth in this Agreement and provided to the Buyer pursuant to Section 2(d) hereof and otherwise in connection with the transactions contemplated hereby is true and correct in all material respects and the Company has not omitted to state any material fact necessary in order to make the statements made herein or therein, in light of the circumstances under which they were made, not misleading. To the best of the Company's knowledge, no event or circumstance has occurred or exists with respect to the Company or any of its Subsidiaries or its or their business, properties, prospects, operations or financial conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed (assuming for this purpose that the Company's reports filed under the 1934 Act are being incorporated into an effective registration statement filed by the Company under the 1933 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;p. <u>Acknowledgment Regarding Buyer's Purchase of Securities.</u> The Company acknowledges and agrees that the Buyer is acting solely in the capacity of arm's length purchaser with respect to this Agreement and the transactions contemplated hereby. The Company further acknowledges that the Buyer 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 hereby and any statement made by the Buyer or any of its respective representatives or agents in connection with this Agreement and the transactions contemplated hereby is not advice or a recommendation and is merely incidental to the Buyer's purchase of the Securities. The Company further represents to the Buyer that the Company's decision to enter into this Agreement has been based solely on the independent evaluation of 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;q. <u>No Integrated Offering.</u> Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration under the 1933 Act of the issuance of the Securities to the Buyer. The issuance of the Securities to the Buyer will not be integrated with any other issuance of the Company's securities (past, current or future) for purposes of any shareholder approval provisions applicable to the Company or its 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;r. <u>No Brokers; No Solicitation.</u> The Company has taken no action which would give rise to any claim by any person for brokerage commissions, transaction fees or similar payments relating to this Agreement or the transactions contemplated hereby. The Company represents and warrants that neither the Buyer nor its employee(s), member(s), beneficial owner(s), or partner(s) solicited the Company to enter into this Agreement and consummate the transactions described in this Agreement. The Company represents and warrants that neither the Buyer nor its employee(s), member(s), beneficial owner(s), or partner(s) is required to be registered as a broker-dealer under the Securities Exchange Act of 1934 in order to (i) enter into or consummate the transactions encompassed by this Agreement, Security Agreement, the Note, Warrants, and the related transaction documents entered into in connection herewith (the "Transaction Documents"), (ii) fulfill the Buyer's obligations under the Transaction Documents, or (iii) exercise any of the Buyer's rights under the Transaction Documents (including but not limited to the sale of the 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;s. <u>Permits; Compliance.</u> To the best of the Company's knowledge, the Company and each of its Subsidiaries is in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and operate its properties and to carry on its business as it is now being conducted (collectively, the "Company Permits"), and there is no action pending or, to the knowledge of the Company, threatened regarding suspension or cancellation of any of the Company Permits. Neither the Company nor any of its Subsidiaries is in conflict with, or in default or violation of, any of the Company Permits, except for any such conflicts, defaults or violations which, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect. Since June 30, 2025, neither the Company nor any of its Subsidiaries has received any notification with respect to possible conflicts, defaults or violations of applicable laws, except for notices relating to possible conflicts, defaults or violations, which conflicts, defaults or violations would not 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;t. <u>Environmental Matters.</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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) There are, to the Company's knowledge, with respect to the Company or any of its Subsidiaries or any predecessor of the Company, no past or present violations of Environmental Laws (as defined below), releases of any material into the environment, actions, activities, circumstances, conditions, events, incidents, or contractual obligations which may give rise to any common law environmental liability or any liability under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 or similar federal, state, local or foreign laws and neither the Company nor any of its Subsidiaries has received any notice with respect to any of the foregoing, nor is any action pending or, to the Company's knowledge, threatened in connection with any of the foregoing. The term "Environmental Laws" means all federal, state, local or foreign 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, "Hazardous Materials") 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) Other than those that are or were stored, used or disposed of in compliance with applicable law, no Hazardous Materials are contained on or about any real property currently owned, leased or used by the Company or any of its Subsidiaries, and no Hazardous Materials were released on or about any real property previously owned, leased or used by the Company or any of its Subsidiaries during the period the property was owned, leased or used by the Company or any of its Subsidiaries, except in the normal course of the Company's or any of its Subsidiaries' business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) There are no underground storage tanks on or under any real property owned, leased or used by the Company or any of its Subsidiaries that are not in compliance with 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;u. <u>Title to Property.</u> The Company and its Subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them which is material to the business of the Company and its Subsidiaries, in each case free and clear of all liens, encumbrances and defects except such as would not have a Material Adverse Effect. 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 would not 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;v. <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 prudent and customary in the businesses in which the Company and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has any 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. Upon written request the Company will provide to the Buyer true and correct copies of all policies relating to commercial general liability coverage.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Internal Accounting Controls.</u> The Company and each of its Subsidiaries maintain a system of internal accounting controls sufficient, in the judgment of the Company's board of directors, to provide reasonable 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Foreign Corrupt Practices.</u> Neither the Company, nor any of its Subsidiaries, nor any director, officer, agent, employee or other person acting on behalf of the Company or any Subsidiary has, in the course of his actions for, or on behalf of, the Company, used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>[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;z. <u>No Investment Company.</u> The Company is not, and upon the issuance and sale of the Securities as contemplated by this Agreement will not be an "investment company" required to be registered under the Investment Company Act of 1940 (an "Investment Company"). The Company is not controlled by an Investment Company.

aa. <u>No Off Balance Sheet Arrangements</u>. There is no transaction, arrangement, or other relationship between the Company or any of its Subsidiaries and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its 1934 Act filings and is not so disclosed or that otherwise could be reasonably likely to have a Material Adverse Effect.

bb. <u>No Disqualification Events</u>. None of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company participating in the offering hereunder, any beneficial owner of 20% or more of the Company's outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the 1933 Act) connected with the Company in any capacity at the time of sale (each, an "Issuer Covered Person") is subject to any of the "Bad Actor" disqualifications described in Rule 506(d)(1)(i) to (viii) under the 1933 Act (a "Disqualification Event"), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification 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;cc. <u>Manipulation of Price</u>. The Company has not, and to its knowledge no one acting on its behalf has: (i) taken, directly or indirectly, any action designed to cause or to result, or that could reasonably be expected to cause or result, in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any person any compensation for soliciting another to purchase any other securities of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;dd. <u>Bank Holding Company Act</u>. Neither the Company nor any of its Subsidiaries is subject to the Bank Holding Company Act of 1956, as amended (the "BHCA") and to regulation by the Board of Governors of the Federal Reserve System (the "Federal Reserve"). Neither the Company nor any of its Subsidiaries or affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.

ee. <u>Illegal or Unauthorized Payments; Political Contributions</u>. Neither the Company nor any of its Subsidiaries nor, to the Company's knowledge, any of the officers, directors, employees, agents or other representatives of the Company or any of its Subsidiaries or any other business entity or enterprise with which the Company or any Subsidiary is or has been affiliated or associated, has, directly or indirectly, made or authorized any payment, contribution or gift of money, property, or services, whether or not in contravention of applicable law, (i) as a kickback or bribe to any person or (ii) to any political organization, or the holder of or any aspirant to any elective or appointive public office except for personal political contributions not involving the direct or indirect use of funds of the Company or any of its Subsidiaries.

ff. <u>Breach of Representations and Warranties by the Company.</u> The Company agrees that if the Company breaches any of the representations or warranties set forth in this Section 3 and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an Event of Default under Section 3.4 of the Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>ADDITIONAL COVENANTS, AGREEMENTS AND ACKNOWLEDGEMENTS</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;a. <u>Best Efforts.</u> The parties shall use their best efforts to satisfy timely each of the conditions described in Section 6 and 7 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. <u>Form D; Blue Sky Laws</u>. The Company agrees to file a Form D with respect to the Securities if required under Regulation D and to provide a copy thereof to the Buyer promptly after such filing. The Company shall, on or before the Closing Date, take such action as the Company shall reasonably determine is necessary to qualify the Securities for sale to the Buyer at the applicable closing pursuant to this Agreement under applicable securities or "blue sky" laws of the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken to the Buyer on or prior to the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. <u>Use of Proceeds.</u> The Company shall use the Purchase Price for business development, general working capital, and as set forth on Schedule 4.c., and not for any other purpose, including but not limited to (i) the repayment of any indebtedness owed to officers, directors or employees of the Company or their affiliates, (ii) the repayment of any debt issued in corporate finance transactions (including but not limited to promissory notes that have the ability to be converted into Common Stock), (iii) any loan to or investment in any other corporation, partnership, enterprise or other person (except in connection with the Company's currently existing operations), (iv) any loan, credit, or advance to any officers, directors, employees, or affiliates of the Company, or (v) in violation or contravention of any applicable law, rule or regulation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Right of Participation and First Refusal</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Other than arrangements that are in place or disclosed in SEC Documents prior to the date of this Agreement, from the date of this Agreement until the later of (i) eighteen (18) calendar months after the date of this Agreement or (ii) the date that the Note is extinguished in its entirety, the Company will not, (i) directly or indirectly, offer, sell, grant any option to purchase, or otherwise dispose of (or announce any offer, sale, grant or any option to purchase or other disposition of) any of its or its Subsidiaries' debt, equity, or equity equivalent securities, including without limitation any debt, preferred shares or other instrument or security that is, at any time during its life and/or under any circumstances, convertible into, exchangeable, or exercisable for Common Stock (any such offer, sale, grant, disposition or announcement being referred to as a "Subsequent Placement") or (ii) enter into any definitive agreement with regard to the foregoing, in each case unless the Company shall have first complied with this Section 4(d).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Company shall deliver to the Buyer an irrevocable written notice (the "Offer Notice") of any proposed or intended Subsequent Placement, which shall (w) identify and describe the Subsequent Placement, (x) describe the price and other terms upon which they are to be issued, sold or exchanged, and the number or amount of the securities in the Subsequent Placement to be issued, sold, or exchanged and (y) offer to issue and sell to or exchange with the Buyer (in Buyer's sole discretion, and in each case, an "Offer") at least one hundred percent (100%) of the securities in the Subsequent Placement (in each case, an "Offer").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) To accept an Offer, in whole or in part, the Buyer must deliver a written notice (the "Notice of Acceptance") to the Company prior to the end of the fifth (5<sup>th</sup>) Trading Day (as defined in the Note) ("Trading Day") after the Buyer's receipt of the Offer Notice (the "Offer Period"), setting forth the amount that the Buyer elects to purchase (the "Subscription Amount"). The Company shall complete the Subsequent Placement and issue and sell the Subscription Amount to the Buyer upon terms and conditions (including, without limitation, unit prices and interest rates) set forth in the Offer Notice, unless a change to such terms and conditions is agreed to in writing between the Company and Buyer. The Buyer may elect to exchange any amounts owed under the Note in lieu of cash consideration with respect to all or any portion of the Subscription Amount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Notwithstanding anything to the contrary contained herein, if the Company desires to modify or amend the terms or conditions of a Subsequent Placement at any time after the Offer Notice is given to Buyer (provided, however, that such modification or amendment to the terms or conditions cannot occur during any Offer Period), the Company shall deliver to the Buyer a new Offer Notice and the Offer Period of such new Offer shall expire at the end of the fifth (5<sup>th</sup>) Trading Day after the Buyer's receipt of such new Offer 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;e. <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 the Buyer in order to enforce any right or remedy under this Agreement, the Note and any document, agreement or instrument contemplated thereby. Notwithstanding any provision to the contrary contained in this Agreement, the Note and any document, agreement or instrument contemplated thereby, it is expressly agreed and provided that the total liability of the Company under this Agreement, the Note or any document, agreement or instrument contemplated thereby for payments which under applicable law are in the nature of interest shall not exceed the maximum lawful rate authorized under applicable law (the "Maximum Rate"), 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 which under applicable law in the nature of interest that the Company may be obligated to pay under this Agreement, the Note and any document, agreement or instrument contemplated thereby exceed such Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by law applicable to this Agreement, the Note and any document, agreement or instrument contemplated thereby 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 this Agreement, the Note and any document, agreement or instrument contemplated thereby 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 the Buyer with respect to indebtedness evidenced by this Agreement, the Note and any document, agreement or instrument contemplated thereby, such excess shall be applied by the Buyer to the unpaid principal balance of any such indebtedness or be refunded to the Company, the manner of handling such excess to be at the Buyer's election.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Restriction on Activities</u>. Beginning on the date of this Agreement and continuing until the Note is repaid or converted in full and the Warrants have been exercised in the entirety, the Company shall not, directly or indirectly, without the Buyer's prior written consent, which consent shall not be unreasonably withheld: (a) change the nature of its business; or (b) sell, divest, acquire, change the structure of any material assets other than in the ordinary course of business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. <u>Listing.</u> The Company will, so long as the Buyer owns any of the Securities, maintain the listing and trading of its Common Stock on the Principal Market or any equivalent replacement exchange or electronic quotation system (including but not limited to the Pink Sheets electronic quotation system) and will comply in all respects with the Company's reporting, filing and other obligations under the bylaws or rules of the Financial Industry Regulatory Authority ("FINRA") and such exchanges, as applicable. The Company shall promptly provide to the Buyer copies of any notices it receives from the Principal Market and any other exchanges or electronic quotation systems on which the Common Stock is then traded regarding the continued eligibility of the Common Stock for listing on such exchanges and quotation systems.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Corporate Existence.</u> The Company will, so long as the Buyer beneficially owns any of the Securities, maintain its corporate existence and shall not sell all or substantially all of the Company's assets, except in the event of a merger or consolidation with the written consent of the Buyer or sale of all or substantially all of the Company's assets with the written consent of the Buyer, where the surviving or successor entity in such transaction (i) assumes the Company's obligations hereunder and under the agreements and instruments entered into in connection herewith and (ii) is a publicly traded corporation whose Common Stock is listed for trading or quotation on the Principal Market, any tier of the NASDAQ Stock Market, the New York Stock Exchange or the NYSE American.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 Integration.</u> The Company shall not make any offers or sales of any security (other than the Securities) under circumstances that would require registration of the Securities being offered or sold hereunder under the 1933 Act or cause the offering of the Securities to be integrated with any other offering of securities by the Company for the purpose of any stockholder approval provision applicable to the Company or its 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j. <u>Compliance with 1934 Act; Public Information Failures.</u> For so long as the Buyer beneficially owns the Note, Warrants, Conversion Shares, or any Exercise Shares, the Company shall comply with the reporting requirements of the 1934 Act; and the Company shall continue to be subject to the reporting requirements of the 1934 Act. During the period that the Buyer beneficially owns the Note, Warrants, Conversion Shares, or any Exercise Shares, if the Company shall (i) fail for any reason to satisfy the requirements of Rule 144(c)(1), including, without limitation, the failure to satisfy the current public information requirements under Rule 144(c) or (ii) if the Company has ever been an issuer described in Rule 144(i)(1)(i) or becomes such an issuer in the future, and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (each, a "Public Information Failure") then, as partial relief for the damages to the Buyer by reason of any such delay in or reduction of its ability to sell the Securities (which remedy shall not be exclusive of any other remedies available pursuant to this Agreement, the Note, or at law or in equity), the Company shall pay to the Buyer an amount in cash equal to three percent (3%) of the Purchase Price on each of the day of a Public Information Failure and on every thirtieth day (pro rated for periods totaling less than thirty days) thereafter until the date such Public Information Failure is cured. The payments to which a holder shall be entitled pursuant to this Section 4(j) are referred to herein as "Public Information Failure Payments." Public Information Failure Payments shall be paid on the earlier of (i) the last day of the calendar month during which such Public Information Failure Payments are incurred and (iii) the third business day after the event or failure giving rise to the Public Information Failure Payments is cured. In the event the Company fails to make Public Information Failure Payments in a timely manner, such Public Information Failure Payments shall bear interest at the rate of 5% per month (prorated for partial months) until paid 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;k. <u>Acknowledgement Regarding Buyer's Trading Activity</u>. Until the Note is fully repaid or fully converted, the Buyer shall not effect any "short sale" (as such term is defined in Rule 200 of Regulation SHO of the 1934 Act) of the Common Stock which establishes a net short position with respect to the 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;l. <u>Legal Counsel Opinions</u>. Upon the request of the Buyer from to time to time, the Company shall be responsible (at its cost) for promptly supplying to the Company's transfer agent and the Buyer a customary legal opinion letter of its counsel (the "Legal Counsel Opinion") to the effect that the resale of the Conversion Shares and/or Exercise Shares by the Buyer or its affiliates, successors and assigns is exempt from the registration requirements of the 1933 Act pursuant to Rule 144 (provided the requirements of Rule 144 are satisfied and provided the Conversion Shares and/or Exercise Shares are not then registered under the 1933 Act for resale pursuant to an effective registration statement) or other applicable exemption (provided the requirements of such other applicable exemption are satisfied). In addition, the Buyer may (at the Company's cost) at any time secure its own legal counsel to issue the Legal Counsel Opinion, and the Company will instruct its transfer agent to accept such opinion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Piggy-Back Registration Rights</u>. The Company hereby grants to the Buyer the piggy-back registration rights set forth in <u>Exhibit B</u> 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;n. <u>Most Favored Nation</u>. While the Note or any principal amount, interest or fees or expenses due thereunder remain outstanding and unpaid, the Company shall not enter into any public or private offering of its securities (including securities convertible into shares of Common Stock) with any individual or entity (an "Other Investor") that has the effect of establishing rights or otherwise benefiting such Other Investor in a manner more favorable in any material respect to such Other Investor (even if the Other Investor does not receive the benefit of such more favorable term until a default occurs under such other security) than the rights and benefits established in favor of the Buyer by this Agreement or the Note unless, in any such case, the Buyer has been provided with such rights and benefits pursuant to a definitive written agreement or agreements between the Company and the Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Definition of Variable Rate Transaction</u>. "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 any agreement, including, but not limited to, an Equity Line of Credit (as defined in the Note), whereby the Company may issue securities at a future determined 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;p. <u>Non-Public Information</u>. The Company covenants and agrees that neither it, nor any other person acting on its behalf will provide the Buyer or its agents or counsel with any information that constitutes, or the Company reasonably believes constitutes, material non-public information, unless prior thereto the Buyer shall have consented to the receipt of such information and agreed with the Company to keep such information confidential. The Company understands and confirms that the Buyer shall be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent that the Company delivers any material, non-public information to the Buyer without such Buyer's consent, the Company hereby covenants and agrees that such Buyer shall not have any duty of confidentiality to the Company, any of its Subsidiaries, or any of their respective officers, directors, agents, employees or affiliates, not to trade on the basis of, such material, non- public information, provided that the Buyer shall remain subject to applicable law. To the extent that any notice provided, information provided, or any other communications made by the Company, to the Buyer, constitutes or contains material non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice or other material information with the SEC pursuant to a Current Report on Form 8-K. In addition to any other remedies provided by this Agreement or the related transaction documents, if the Company provides any material non-public information to the Buyer without their prior written consent, and it fails to immediately (no later than that business day) file a Form 8-K disclosing this material non-public information, it shall pay the Buyer as partial liquidated damages and not as a penalty a sum equal to $3,000 per day beginning with the day the information is disclosed to the Buyer and ending and including the day the Form 8-K disclosing this information is filed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>[Intentionally Omitted].</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;r. <u>No Broker-Dealer Acknowledgement</u>. Absent a final adjudication from a court of competent jurisdiction stating otherwise, the Company shall not to any person, institution, governmental or other entity, state, claim, allege, or in any way assert, that Buyer is currently, or ever has been, a broker-dealer under the Securities Exchange Act of 1934.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Breach of Covenants.</u> The Company acknowledges and agrees that if the Company breaches any of the covenants set forth in this Section 4, in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an Event of Default under Section 3.3 of the Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Transfer Agent Instructions.</u> The Company shall issue irrevocable instructions to the Company's transfer agent to issue certificates and/or issue shares electronically at the Buyer's option, registered in the name of the Buyer or its nominee, upon conversion of the Note and/or exercise of the Warrants, the Conversion Shares and Exercise Shares, in such amounts as specified from time to time by the Buyer to the Company in accordance with the terms thereof (the "Irrevocable Transfer Agent Instructions"). In the event that the Company proposes to replace its transfer agent, the Company shall provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to this Agreement (including but not limited to the provision to irrevocably reserved shares of Common Stock in the Reserved Amount (as defined in the Note)) signed by the successor transfer agent to the Company and the Company. Prior to registration of the Conversion Shares and/or Exercise Shares under the 1933 Act or the date on which the Conversion Shares and/or Exercise Shares may be sold pursuant to Rule 144, Rule 144A, Regulation S, or other applicable exemption without any restriction as to the number of Securities as of a particular date that can then be immediately sold, all such certificates or book entry shares shall bear the restrictive legend specified in Section 2(g) of this Agreement. The Company warrants that: (i) no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5 will be given by the Company to its transfer agent and that the Securities shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement and the Note; (ii) it will not direct its transfer agent not to transfer or delay, impair, and/or hinder its transfer agent in transferring (or issuing)(electronically or in certificated form) any certificate for Securities to be issued to the Buyer upon conversion of or otherwise pursuant to the Note and/or upon exercise of or otherwise pursuant to the Warrants as and when required by the Note and this Agreement; (iii) it will not fail to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any Securities issued to the Buyer upon conversion of or otherwise pursuant to the Note and/or upon exercise of or otherwise pursuant to the Warrants as and when required by the Note, Warrants, and/or this Agreement and (iv) it will provide any required corporate resolutions and issuance approvals to its transfer agent within 6 hours of each conversion of the Note and/or exercise of the Warrants. Nothing in this Section shall affect in any way the Buyer's obligations and agreement set forth in Section 2(g) hereof to comply with all applicable prospectus delivery requirements, if any, upon re-sale of the Securities. If the Buyer provides the Company, at the cost of the Company, with (i) an opinion of counsel in form, substance and scope customary for opinions in comparable transactions, to the effect that a public sale or transfer of such Securities may be made without registration under the 1933 Act and such sale or transfer is effected or (ii) the Buyer provides reasonable assurances that the Securities can be sold pursuant to 144, Rule 144A, Regulation S, or other applicable exemption, the Company shall permit the transfer, and, in the case of the Securities, promptly instruct its transfer agent to issue one or more certificates, free from restrictive legend, in such name and in such denominations as specified by the Buyer. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer, by vitiating the intent and purpose of the transactions contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 5 may be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section, that the Buyer shall be entitled, in addition to all other available remedies, to an injunction restraining any breach and requiring immediate transfer, without the necessity of showing economic loss and without any bond or other security being required.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Conditions to the Company's Obligation to Sell.</u> The obligation of the Company hereunder to issue and sell the Note to the Buyer at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions thereto, provided that these conditions are for the Company's sole benefit and may be waived by the Company at any time in 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. The Buyer shall have executed the Transaction Documents and delivered the same 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. The Buyer shall have delivered the Purchase Price in accordance with Section 1(b) 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. The representations and warranties of the Buyer shall be true and correct in all material respects as of the date when made and as of the Closing Date, as though made at that time (except for representations and warranties that speak as of a specific date), and the Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Buyer at or prior to the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of 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;7. <u>Conditions to The Buyer's Obligation to Purchase.</u> The obligation of the Buyer hereunder to purchase the Note, on the Closing Date, is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Buyer's sole benefit and may be waived by the Buyer at any time in 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. The Company and Subsidiaries, as applicable, shall have executed the Transaction Documents and delivered the same to the Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 have delivered to the Buyer the duly executed Note in accordance with Section 1(b) 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. The Company shall have delivered to the Buyer the 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. The Irrevocable Transfer Agent Instructions, in form and substance satisfactory to the Buyer, shall have been delivered to and acknowledged in writing by the Company's Transfer Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 representations and warranties of the Company shall be true and correct in all material respects as of the date when made and as of Closing Date, as though made at such time (except for representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. No event shall have occurred which could reasonably be expected to have a Material Adverse Effect on the Company including but not limited to a change in the 1934 Act reporting status of the Company or the failure of the Company to be timely in its 1934 Act reporting obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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. Trading in the Common Stock on the Principal Market shall not have been suspended by the SEC, FINRA or the Principal Market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 have delivered to the Buyer (i) a certificate evidencing the formation and good standing of the Company and each of its Subsidiaries in such entity's jurisdiction of formation issued by the Secretary of State (or comparable office) of such jurisdiction, as of a date within ten (10) days of the Closing Date and (ii) resolutions adopted by the Company's Board of Directors at a duly called meeting or by unanimous written consent authorizing this Agreement and all other documents, instruments and 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;8. <u>Governing Law; 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. <u>Arbitration of Claims; Governing Law; Venue</u>. The Company and Buyer shall submit all Claims (as defined in Exhibit C of this Purchase Agreement) (the "Claims") arising under this Agreement or any other agreement between the Company and Buyer or their respective affiliates (including but not limited to the Transaction Documents) or any Claim relating to the relationship of the Company and Buyer or their respective affiliates to binding arbitration pursuant to the arbitration provisions set forth in Exhibit C of the Purchase Agreement (the "Arbitration Provisions"). The Company and Buyer hereby acknowledge and agree that the Arbitration Provisions are unconditionally binding on the Company and Buyer hereto and are severable from all other provisions of this Agreement. By executing this Agreement, Company represents, warrants and covenants that Company has reviewed the Arbitration Provisions carefully, consulted with legal counsel about such provisions (or waived its right to do so), understands that the Arbitration Provisions are intended to allow for the expeditious and efficient resolution of any dispute hereunder, agrees to the terms and limitations set forth in the Arbitration Provisions, and that Company will not take a position contrary to the foregoing representations. Company acknowledges and agrees that Buyer may rely upon the foregoing representations and covenants of Company regarding the Arbitration Provisions. This Agreement shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Agreement shall be governed by, the internal laws of the State of Nevada, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Nevada or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Nevada. The Company and Buyer consent to and expressly agree that the exclusive venue for arbitration of any Claims arising under this Agreement or any other agreement between the Company and Buyer or their respective affiliates (including but not limited to the Transaction Documents) or any Claim relating to the relationship of the Company and Buyer or their respective affiliates shall be in San Diego County, State of California. Without modifying the Company's and Buyer's mandatory obligations to resolve disputes hereunder pursuant to the Arbitration Provisions, for any litigation arising in connection with any of the Transaction Documents (and notwithstanding the terms (specifically including any governing law and venue terms) of any transfer agent services agreement or other agreement between the Company's transfer agent and the Company, such litigation specifically includes, without limitation any action between or involving Company and the Company's transfer agent under the Irrevocable Transfer Agent Instructions or otherwise related to Buyer in any way (specifically including, without limitation, any action where Company seeks to obtain an injunction, temporary restraining order, or otherwise prohibit the Company's transfer agent from issuing shares of Common Stock to Buyer for any reason)), each party hereto hereby (i) consents to and expressly submits to the exclusive personal jurisdiction of any state or federal court sitting in San Diego County, State of California, (ii) expressly submits to the exclusive venue of any such court for the purposes hereof, (iii) agrees to not bring any such action (specifically including, without limitation, any action where Company seeks to obtain an injunction, temporary restraining order, or otherwise prohibit the Company's transfer agent from issuing shares of Common Stock to Buyer for any reason) outside of any state or federal court sitting in San Diego County, State of California, and (iv) waives any claim of improper venue and any claim or objection that such courts are an inconvenient forum or any other claim, defense or objection to the bringing of any such proceeding in such jurisdiction or to any claim that such venue of the suit, action or proceeding is improper. Notwithstanding anything in the foregoing to the contrary, nothing herein shall limit, or shall be deemed or construed to limit, the ability of the Buyer to realize on any collateral or any other security, or to enforce a judgment or other court ruling in favor of the Buyer, including through a legal action in any court of competent jurisdiction. The Company hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any objection to jurisdiction and venue of any action instituted hereunder, any claim that it is not personally subject to the jurisdiction of any such court, and any claim that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper (including but not limited to based upon *forum non conveniens*). **THE COMPANY 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 WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTIONS CONTEMPLATED HEREBY**. The Company irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other agreement, certificate, instrument or document contemplated hereby or thereby by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to Company 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 law. The prevailing party in any action or dispute brought in connection with this Agreement or any other agreement, certificate, instrument or document contemplated hereby or thereby shall be entitled to recover from the other party its reasonable attorney's fees and costs. 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Counterparts.</u> This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. A facsimile or .pdf signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile or .pdf signature. Delivery of a counterpart signature hereto by facsimile or email/.pdf transmission shall be deemed validly delivery 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. <u>Construction; Headings.</u> This Agreement shall be deemed to be jointly drafted by the Company and the Buyer and shall not be construed against any person as the drafter hereof. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. <u>Severability.</u> In the event that any provision of this Agreement, the Note, or any other agreement or instrument delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of this Agreement, the Note, or any other agreement, certificate, instrument or document contemplated hereby or 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;e. <u>Entire Agreement; Amendments.</u> This Agreement, the Note, and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement or any agreement or instrument contemplated hereby may be waived or amended other than by an instrument in writing signed by the Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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> All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be

(i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, e-mail or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by e-mail or facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:

If to the Company, to:

**ALTERNATIVE BALLISTICS CORPORATION**

5940 S. Rainbow Blvd.

Las Vegas, NV 89118

Attention: Steven Luna

e-mail: steve@alternativeballistics.com

If to the Buyer:

**LENDSPARK CORPORATION**

5451 Avenida Encinitas, Suite B

Carlsbad, CA 92008

e-mail: Dave@Lendspark.com

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Successors and Assigns.</u> This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Buyer. The Buyer may assign its rights hereunder to any "accredited investor" (as defined in Rule 501(a) of the 1933 Act) in a private transaction from the Buyer or to any of its "affiliates," as that term is defined under the 1934 Act, without the consent of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h. <u>Third Party Beneficiaries.</u> 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Survival.</u> The representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall survive the closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of the Buyer. The Company agrees to indemnify and hold harmless the Buyer and all their officers, directors, employees and agents for loss or damage arising as a result of or related to any breach or alleged breach by the Company of any of its representations, warranties and covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j. <u>Publicity.</u> The Company, and the Buyer shall have the right to review a reasonable period of time before issuance of any press releases, SEC, Principal Market or FINRA filings, or any other public statements with respect to the transactions contemplated hereby; <u>provided</u>, <u>however</u>, that the Company shall be entitled, without the prior approval of the Buyer, to make any press release or SEC, Principal Market (or other applicable trading market) or FINRA filings with respect to such transactions as is required by applicable law and regulations (although the Buyer shall be consulted by the Company in connection with any such press release prior to its release and shall be provided with a copy thereof and be given an opportunity to comment thereon).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Further Assurances.</u> 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;l. <u>No Strict Construction.</u> 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;m. <u>Indemnification</u>. In consideration of the Buyer's execution and delivery of this Agreement and acquiring the Securities hereunder, and in addition to all of the Company's other obligations under this Agreement or the Note, the Company shall defend, protect, indemnify and hold harmless the Buyer and its stockholders, partners, members, officers, directors, employees and direct or indirect investors and any of the foregoing persons' agents or other representatives (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the "Indemnitees") from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys' fees and disbursements (the "Indemnified Liabilities"), incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by the Company in this Agreement, the Note or any other agreement, certificate, instrument or document contemplated hereby or thereby, (b) any breach of any covenant, agreement or obligation of the Company contained in this Agreement, the Note or any other agreement, certificate, instrument or document contemplated hereby or thereby or (c) any cause of action, suit or claim brought or made against such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company) and arising out of or resulting from (i) the execution, delivery, performance or enforcement of this Agreement, the Note or any other agreement, certificate, instrument or document contemplated hereby or thereby, (ii) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of the issuance of the Securities, or (iii) the status of the Buyer or holder of the Securities as an investor in the Company pursuant to the transactions contemplated by this Agreement. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities that is permissible 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;n. <u>Remedies.</u> The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Agreement, the Note, the Warrants, or any other agreement, certificate, instrument or document contemplated hereby or thereby will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Agreement, the Note, the Warrants, or any other agreement, certificate, instrument or document contemplated hereby or thereby, that the Buyer shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Agreement, the Note, the Warrants, or any other agreement, certificate, instrument or document contemplated hereby or thereby, and to enforce specifically the terms and provisions hereof and thereof, without the necessity of showing economic loss and without any bond or other security being required.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o. <u>Payment Set Aside</u>. To the extent that the (i) Company makes a payment or payments to the Buyer hereunder, pursuant to the Note, pursuant to the Warrants, or pursuant to any other agreement, certificate, instrument or document contemplated hereby or thereby, or (ii) the Buyer enforces or exercises its rights hereunder, pursuant to the Note, pursuant to the Warrants, or pursuant to any other agreement, certificate, instrument or document contemplated hereby or thereby, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof (including but not limited to the sale of the Securities) are for any reason (i) subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, or disgorged by the Buyer, or (ii) are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver, government entity, or any other person or entity under any law (including, without limitation, any bankruptcy law, foreign, state or federal law, common law or equitable cause of action), then (i) 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 and (ii) the Company shall immediately pay to the Buyer a dollar amount equal to the amount that was for any reason (i) subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, or disgorged by the Buyer, or (ii) required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver, government entity, or any other person or entity under any law (including, without limitation, any bankruptcy law, foreign, state or federal law, common law or equitable cause of 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;p. <u>Failure or Indulgence Not Waiver.</u> No failure or delay on the part of the Buyer in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privileges. All rights and remedies of the Buyer existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Electronic Signature</u>. This Agreement may be executed and delivered in one or more counterparts (including by facsimile or electronic mail or in .pdf or any other form of electronic delivery (including any electronic signature complying with U.S. federal ESIGN Act of 2000)) and by different parties in separate counterparts, with the same effect as if all parties hereto had signed the same document. All counterparts so executed and delivered shall be construed together and shall constitute one and the same 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;r. <u>Additional Funding</u>. Buyer shall have the right, in Buyer's sole discretion, during the period beginning on the date of this Agreement and continuing through the date that is one (1) calendar year after the date of this Agreement (the "Additional Funding Period"), to fund up to an additional $500,000.00 of purchase price in the aggregate (up to $550,000.00 of face amount of such notes) (the "Additional Funding Amount") to the Company, in one or more tranches as determined by the Buyer in Buyer's sole discretion, on the same terms as the Transaction Documents. Each time the Buyer exercises the aforementioned right during the Additional Funding Period, Buyer shall provide written notice to the Company which identifies the portion of the Additional Funding Amount being funded by Buyer (each a "Additional Funding Notice"). The Company shall, within five (5) business days of Buyer's delivery of each respective Additional Funding Notice, (i) cause the execution of the forms of the Transaction Documents for the respective portion of the Additional Funding Amount, which shall be in the same form and substance as the Transaction Documents, and delivery of such executed forms to Buyer, as well as (ii) deliver to Buyer all closing deliverables reasonably requested by Buyer.

[Signature Page Follows]

IN WITNESS WHEREOF, the undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above written.

**ALTERNATIVE BALLISTICS CORPORATION**

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| | |
|:---|:---|
| By: | */s/ STEVEN LUNA* |
| Name: | STEVEN LUNA |
| Title: | CHIEF EXECUTIVE OFFICER |

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**LENDSPARK CORPORATION**

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| | |
|:---|:---|
| By: | */s/ DAVID CLARK* |
| Name: | DAVID CLARK |
| Title: | MEMBER |

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**EXHIBIT A**

**FORM OF NOTE**

**[attached hereto]**

**EXHIBIT B**

**PIGGY-BACK REGISTRATION RIGHTS**

All of the Conversion Shares and Exercise Shares shall be deemed "Registrable Securities" subject to the provisions of this Exhibit B. All capitalized terms used but not defined in this Exhibit B shall have the meanings ascribed to such terms in the Securities Purchase Agreement to which this Exhibit is attached.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Piggy-Back 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;1.1 <u>Piggy-Back Rights</u>. If at any time on or after the date of the Closing the Company proposes to file any Registration Statement under the 1933 Act (a "Registration Statement") with respect to any offering of equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into, equity securities, by the Company for its own account or for shareholders of the Company for their account (or by the Company and by shareholders of the Company), other than a Registration Statement (i) filed in connection with any employee stock option or other benefit plan on Form S-8, (ii) for a dividend reinvestment plan or (iii) in connection with a merger or acquisition, then the Company shall (x) give written notice of such proposed filing to the holders of Registrable Securities appearing on the books and records of the Company as such a holder as soon as practicable but in no event less than ten (10) days before the anticipated filing date of the Registration Statement, which notice shall describe the amount and type of securities to be included in such Registration Statement, the intended method(s) of distribution, and the name of the proposed managing underwriter or underwriters, if any, of the offering, and (y) offer to the holders of Registrable Securities in such notice the opportunity to register the sale of such number of Registrable Securities as such holders may request in writing within three (3) days following receipt of such notice (a "Piggy-Back Registration"). The Company shall cause such Registrable Securities to be included in such registration and shall cause the managing underwriter or underwriters of a proposed underwritten offering to permit the Registrable Securities requested to be included in a Piggy-Back Registration on the same terms and conditions as any similar securities of the Company and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof (with the understanding that the Company shall file the initial prospectus covering the Buyer's sale of the Registrable Securities at prevailing market prices on the same date that the Registration Statement is 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;1.2 <u>Withdrawal</u>. Any holder of Registrable Securities may elect to withdraw such holder's request for inclusion of Registrable Securities in any Piggy-Back Registration by giving written notice to the Company of such request to withdraw prior to the effectiveness of the Registration Statement. The Company (whether on its own determination or as the result of a withdrawal by persons making a demand pursuant to written contractual obligations) may withdraw a Registration Statement at any time prior to the effectiveness of such Registration Statement. Notwithstanding any such withdrawal, the Company shall pay all expenses incurred by the holders of Registrable Securities in connection with such Piggy-Back Registration as provided in Section 1.5 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;1.3 The Company shall notify the holders of Registrable Securities at any time when a prospectus relating to such holder's Registrable Securities is required to be delivered under the 1933 Act, upon discovery that, or upon the happening of any event as a result of which, the prospectus included in such Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. At the request of such holder, the Company shall also prepare, file and furnish to such holder a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of the Registrable Securities, such 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 not misleading in light of the circumstances then existing. The holders of Registrable Securities shall not to offer or sell any Registrable Securities covered by the Registration Statement after receipt of such notification until the receipt of such supplement or amendment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.4 The Company may request a holder of Registrable Securities to furnish the Company such information with respect to such holder and such holder's proposed distribution of the Registrable Securities pursuant to the Registration Statement as the Company may from time to time reasonably request in writing or as shall be required by law or by the SEC in connection therewith, and such holders shall furnish the Company with 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;1.5 All fees and expenses incident to the performance of or compliance with this Exhibit B by the Company shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses of the Company's counsel and independent registered public accountants) (A) with respect to filings made with the SEC, (B) with respect to filings required to be made with any trading market on which the Common Stock is then listed for trading, (C) in compliance with applicable state securities or Blue Sky laws reasonably agreed to by the Company in writing (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of the Registrable Securities) and (D) with respect to any filing that may be required to be made by any broker through which a holder of Registrable Securities intends to make sales of Registrable Securities with the FINRA, (ii) printing expenses, (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) 1933 Act liability insurance, if the Company so desires such insurance, (vi) fees and expenses of all other persons or entities retained by the Company in connection with the consummation of the transactions contemplated by this Exhibit B and (vii) reasonable fees and disbursements of a single special counsel for the holders of Registrable Securities (selected by holders of the majority of the Registrable Securities requesting such registration). In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder. In no event shall the Company be responsible for any broker or similar commissions of any holder of 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;1.6 The Company and its successors and assigns shall indemnify and hold harmless the Buyer, each holder of Registrable Securities, the officers, directors, members, partners, agents and employees (and any other individuals or entities with a functionally equivalent role of a person holding such titles, notwithstanding a lack of such title or any other title) of each of them, each individual or entity who controls the Buyer or any such holder of Registrable Securities (within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act) and the officers, directors, members, stockholders, partners, agents and employees (and any other individuals or entities with a functionally equivalent role of a person holding such titles, notwithstanding a lack of such title or any other title) of each such controlling individual or entity (each, an "Indemnified Party"), to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys' fees) and expenses (collectively, "<u>Losses</u>"), as incurred, arising out of or relating to (1) any untrue or alleged untrue statement of a material fact contained in a Registration Statement, any related prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any such prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading or (2) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act or any state securities law, or any rule or regulation thereunder, in connection with the performance of its obligations under this Exhibit B, except to the extent, but only to the extent, that (i) such untrue statements or omissions are based upon information regarding the Buyer or such holder of Registrable Securities furnished to the Company by such party for use therein. The Company shall notify the Buyer and each holder of Registrable Securities promptly of the institution, threat or assertion of any proceeding arising from or in connection with the transactions contemplated by this Exhibit B of which the Company is aware.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.7 If the indemnification under Section 1.6 is unavailable to an Indemnified Party or insufficient to hold an Indemnified Party harmless for any Losses, then the Company shall contribute to the amount paid or payable by such Indemnified Party, in such proportion as is appropriate to reflect the relative fault of the Company and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of the Company and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, the Company or the Indemnified Party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include any reasonable attorneys' or other fees or expenses incurred by such party in connection with any proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in Section 1.6 was available to such party in accordance with its terms. It is agreed that it would not be just and equitable if contribution pursuant to this Section 1.7 were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding sentence. Notwithstanding the provisions of this Section 1.7, neither the Buyer nor any holder of Registrable Securities shall be required to contribute, in the aggregate, any amount in excess of the amount by which the net proceeds actually received by such party from the sale of all of their Registrable Securities pursuant to such Registration Statement or related prospectus exceeds the amount of any damages that such party has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.

**[End of Exhibit B]**

**EXHIBIT C**

**ARBITRATION PROVISIONS**

1. <u>Dispute Resolution</u>. Each party consents to and expressly agrees that the exclusive venue for arbitration of any dispute arising out of or relating to any of the Transaction Documents or the relationship of the parties or their affiliates shall be in San Diego County, State of California. For purposes of this Exhibit C, the term "**Claims**" means any disputes, claims, demands, causes of action, requests for injunctive relief, requests for specific performance, questions regarding severability of any provisions of the Transaction Documents, liabilities, damages, losses, or controversies whatsoever arising from, related to, or connected with the transactions contemplated in the Transaction Documents and any communications between the parties related thereto, including without limitation any claims of mutual mistake, mistake, fraud, misrepresentation, failure of formation, failure of consideration, promissory estoppel, unconscionability, failure of condition precedent, rescission, and any statutory claims, tort claims, contract claims, or claims to void, invalidate or terminate this Agreement (or these Arbitration Provisions (defined below)) or any of the other Transaction Documents. The term "Claims" specifically excludes a dispute over the Warrant Calculations (as defined in the Warrants) and Note Calculations (as defined in the Note), and the parties hereby acknowledge and agree that a dispute over any Warrant Calculations (as defined in the Warrants) or Note Calculations (as defined in the Note) shall be resolved by the parties as expressly provided for in the Warrants and Note respectively. The parties to this Agreement (the "**parties**") hereby agree that the Claims may be arbitrated in one or more Arbitrations pursuant to these Arbitration Provisions (one for an injunction or injunctions and a separate one for all other Claims). The parties hereby agree that the arbitration provisions set forth in this Exhibit C ("**Arbitration Provisions**") are binding on each of them. As a result, any attempt to rescind this Agreement (or these Arbitration Provisions) or any other Transaction Document) or declare this Agreement (or these Arbitration Provisions) or any other Transaction Document invalid or unenforceable pursuant to Section 29 of the 1934 Act or for any other reason is subject to these Arbitration Provisions. These Arbitration Provisions shall also survive any termination or expiration of this Agreement. Any capitalized term not defined in these Arbitration Provisions shall have the meaning set forth in this Agreement.

2. <u>Arbitration</u>. Except as otherwise provided herein, all Claims must be submitted to arbitration ("**Arbitration**") to be conducted exclusively in San Diego County, State of California, and pursuant to the terms set forth in these Arbitration Provisions. Subject to the arbitration appeal right provided for in Paragraph 5 below (the "**Appeal Right**"), the parties agree that the award of the arbitrator rendered pursuant to Paragraph 4 below (the "**Arbitration Award**") shall be (a) final and binding upon the parties, (b) the sole and exclusive remedy between them regarding any Claims, counterclaims, issues, or accountings presented or pleaded to the arbitrator, and (c) promptly payable in United States dollars free of any tax, deduction or offset (with respect to monetary awards). Subject to the Appeal Right, any costs or fees, including without limitation attorneys' fees, incurred in connection with or incident to enforcing the Arbitration Award shall, to the maximum extent permitted by law, be charged against the party resisting such enforcement. The Arbitration Award shall include Default Interest (as defined or otherwise provided for in the Note, "**Default Interest**") (with respect to monetary awards) at the rate specified in the Note for Default Interest both before and after the Arbitration Award. Judgment upon the Arbitration Award will be entered and enforced by any state or federal court sitting in the State of Nevada.

3. <u>The Arbitration Act</u>. The parties hereby incorporate herein the provisions and procedures set forth in the Nevada Uniform Arbitration Act, Chapter 38 (as amended or superseded from time to time, the "**Arbitration Act**"). Notwithstanding the foregoing, pursuant to, and to the maximum extent permitted by, the Arbitration Act, in the event of conflict or variation between the terms of these Arbitration Provisions and the provisions of the Arbitration Act, the terms of these Arbitration Provisions shall control and the parties hereby waive or otherwise agree to vary the effect of all requirements of the Arbitration Act that may conflict with or vary from these Arbitration Provisions.

4. <u>Arbitration Proceedings</u>. Arbitration between the parties will be subject to the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 *Initiation of Arbitration*. Pursuant to the Arbitration Act, the parties agree that a party may initiate Arbitration by giving written notice to the other party ("**Arbitration Notice**") in the same manner that notice is permitted under Section 8(f) of this Agreement; *provided, however*, that the Arbitration Notice may not be given by email or fax. Arbitration will be deemed initiated as of the date that the Arbitration Notice is deemed physically delivered to such other party under Section 8(f) of this Agreement (the "**Service Date**"). After the Service Date, information may be delivered, and notices may be given, by email or fax pursuant to Section 8(f) of this Agreement or any other method permitted thereunder. The Arbitration Notice must describe the nature of the controversy, the remedies sought, and the election to commence Arbitration proceedings. All Claims in the Arbitration Notice must be pleaded consistent with the Nevada Rules of Civil Procedure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 *Selection and Payment of Arbitrator*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Within ten (10) calendar days after the Service Date, Buyer shall select and submit to Company the names of three (3) arbitrators that are designated as "neutrals" or qualified arbitrators by American Arbitration Association ("AAA") (https://www.adr.org/) or other arbitration service provider agreed upon by the parties (such three (3) designated persons hereunder are referred to herein as the "**Proposed Arbitrators**"). For the avoidance of doubt, each Proposed Arbitrator must be qualified as a "neutral" with AAA or other arbitration service provider agreed upon by the parties. Within five (5) calendar days after Buyer has submitted to Company the names of the Proposed Arbitrators, Company must select, by written notice to Buyer, one (1) of the Proposed Arbitrators to act as the arbitrator for the parties under these Arbitration Provisions. If Company fails to select one of the Proposed Arbitrators in writing within such 5-day period, then Buyer may select the arbitrator from the Proposed Arbitrators by providing written notice of such selection to Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If Buyer fails to submit to Company the Proposed Arbitrators within ten (10) calendar days after the Service Date pursuant to subparagraph (a) above, then Company may at any time prior to Buyer so designating the Proposed Arbitrators, identify the names of three (3) arbitrators that are designated as "neutrals" or qualified arbitrators by AAA or other arbitration service provider agreed upon by the parties by written notice to Buyer. Buyer may then, within five (5) calendar days after Company has submitted notice of its Proposed Arbitrators to Buyer, select, by written notice to Company, one (1) of the Proposed Arbitrators to act as the arbitrator for the parties under these Arbitration Provisions. If Buyer fails to select in writing and within such 5-day period one (1) of the three (3) Proposed Arbitrators selected by Company, then Company may select the arbitrator from its three (3) previously selected Proposed Arbitrators by providing written notice of such selection to Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If a Proposed Arbitrator chosen to serve as arbitrator declines or is otherwise unable to serve as arbitrator, then the party that selected such Proposed Arbitrator may select one (1) of the other three (3) Proposed Arbitrators within three (3) calendar days of the date the chosen Proposed Arbitrator declines or notifies the parties he or she is unable to serve as arbitrator. If all three (3) Proposed Arbitrators decline or are otherwise unable to serve as arbitrator, then the arbitrator selection process shall begin again in accordance with this Paragraph 4.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The date that the Proposed Arbitrator selected pursuant to this Paragraph 4.2 agrees in writing (including via email) delivered to both parties to serve as the arbitrator hereunder is referred to herein as the "**Arbitration Commencement Date**". If an arbitrator resigns or is unable to act during the Arbitration, a replacement arbitrator shall be chosen in accordance with this Paragraph 4.2 to continue the Arbitration. If AAA or other arbitration service provider agreed upon by the parties ceases to exist or to provide a list of neutrals and there is no successor thereto, then the arbitrator shall be selected under the then prevailing rules of the American Arbitration Association.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Subject to Paragraph 4.10 below, the cost of the arbitrator must be paid equally by both parties. Subject to Paragraph 4.10 below, if one party refuses or fails to pay its portion of the arbitrator fee, then the other party can advance such unpaid amount (subject to the accrual of Default Interest thereupon), with such amount being added to or subtracted from, as applicable, the Arbitration Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 *Applicability of Certain Nevada Rules*. The parties agree that the Arbitration shall be conducted generally in accordance with the Nevada Rules of Civil Procedure and the Nevada Rules of Evidence. More specifically, the Nevada Rules of Civil Procedure shall apply, without limitation, to the filing of any pleadings, motions or memoranda, the conducting of discovery, and the taking of any depositions. The Nevada Rules of Evidence shall apply to any hearings, whether telephonic or in person, held by the arbitrator. Notwithstanding the foregoing, it is the parties' intent that the incorporation of such rules will in no event supersede these Arbitration Provisions. In the event of any conflict between the Nevada Rules of Civil Procedure or the Nevada Rules of Evidence and these Arbitration Provisions, these Arbitration Provisions shall control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 *Answer and Default*. An answer and any counterclaims to the Arbitration Notice shall be required to be delivered to the party initiating the Arbitration within twenty (20) calendar days after the Arbitration Commencement Date. If an answer is not delivered by the required deadline, the arbitrator must provide written notice to the defaulting party stating that the arbitrator will enter a default award against such party if such party does not file an answer within five (5) calendar days of receipt of such notice. If an answer is not filed within the five (5) day extension period, the arbitrator must render a default award, consistent with the relief requested in the Arbitration Notice, against a party that fails to submit an answer within such time period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5 <u>[Intentionally Omitted].</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6 *Discovery*. The parties agree that discovery shall be conducted as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Written discovery will only be allowed if the likely benefits of the proposed written discovery outweigh the burden or expense thereof, and the written discovery sought is likely to reveal information that will satisfy a specific element of a claim or defense already pleaded in the Arbitration. The party seeking written discovery shall always have the burden of showing that all of the standards and limitations set forth in these Arbitration Provisions are satisfied. The scope of discovery in the Arbitration proceedings shall also be limited as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) To facts directly connected with 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;(ii) To facts and information that cannot be obtained from another source or in another manner that is more convenient, less burdensome or less expensive than in the manner requested.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) No party shall be allowed (i) more than fifteen (15) interrogatories (including discrete subparts), (ii) more than fifteen (15) requests for admission (including discrete subparts), (iii) more than ten (10) document requests (including discrete subparts), or (iv) more than three (3) depositions (excluding expert depositions) for a maximum of seven (7) hours per deposition. The costs associated with depositions will be borne by the party taking the deposition. The party defending the deposition will submit a notice to the party taking the deposition of the estimated attorneys' fees that such party expects to incur in connection with defending the deposition. If the party defending the deposition fails to submit an estimate of attorneys' fees within five (5) calendar days of its receipt of a deposition notice, then such party shall be deemed to have waived its right to the estimated attorneys' fees. The party taking the deposition must pay the party defending the deposition the estimated attorneys' fees prior to taking the deposition, unless such obligation is deemed to be waived as set forth in the immediately preceding sentence. If the party taking the deposition believes that the estimated attorneys' fees are unreasonable, such party may submit the issue to the arbitrator for a decision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) All discovery requests (including document production requests included in deposition notices) must be submitted in writing to the arbitrator and the other party. The party submitting the written discovery requests must include with such discovery requests a detailed explanation of how the proposed discovery requests satisfy the requirements of these Arbitration Provisions and the Nevada Rules of Civil Procedure. The receiving party will then be allowed, within five (5) calendar days of receiving the proposed discovery requests, to submit to the arbitrator an estimate of the attorneys' fees and costs associated with responding to such written discovery requests and a written challenge to each applicable discovery request. After receipt of an estimate of attorneys' fees and costs and/or challenge(s) to one or more discovery requests, consistent with subparagraph (c) above, the arbitrator will within three (3) calendar days make a finding as to the likely attorneys' fees and costs associated with responding to the discovery requests and issue an order that (i) requires the requesting party to prepay the attorneys' fees and costs associated with responding to the discovery requests, and (ii) requires the responding party to respond to the discovery requests as limited by the arbitrator within twenty-five (25) calendar days of the arbitrator's finding with respect to such discovery requests. If a party entitled to submit an estimate of attorneys' fees and costs and/or a challenge to discovery requests fails to do so within such 5-day period, the arbitrator will make a finding that (A) there are no attorneys' fees or costs associated with responding to such discovery requests, and (B) the responding party must respond to such discovery requests (as may be limited by the arbitrator) within twenty-five (25) calendar days of the arbitrator's finding with respect to such discovery requests. Any party submitting any written discovery requests, including without limitation interrogatories, requests for production subpoenas to a party or a third party, or requests for admissions, must prepay the estimated attorneys' fees and costs, before the responding party has any obligation to produce or respond to the same, unless such obligation is deemed waived as set forth above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) In order to allow a written discovery request, the arbitrator must find that the discovery request satisfies the standards set forth in these Arbitration Provisions and the Nevada Rules of Civil Procedure. The arbitrator must strictly enforce these standards. If a discovery request does not satisfy any of the standards set forth in these Arbitration Provisions or the Nevada Rules of Civil Procedure, the arbitrator may modify such discovery request to satisfy the applicable standards, or strike such discovery request in whole or in part.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Each party may submit expert reports (and rebuttals thereto), provided that such reports must be submitted within sixty (60) days of the Arbitration Commencement Date. Each party will be allowed a maximum of two (2) experts. Expert reports must contain the following: (i) a complete statement of all opinions the expert will offer at trial and the basis and reasons for them; (ii) the expert's name and qualifications, including a list of all the expert's publications within the preceding ten (10) years, and a list of any other cases in which the expert has testified at trial or in a deposition or prepared a report within the preceding ten (10) years; and (iii) the compensation to be paid for the expert's report and testimony. The parties are entitled to depose any other party's expert witness one (1) time for no more than four (4) hours. An expert may not testify in a party's case-in-chief concerning any matter not fairly disclosed in the expert report.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6 *Dispositive Motions*. Each party shall have the right to submit dispositive motions pursuant to the Nevada Rules of Civil Procedure (a "**Dispositive Motion**"). The party submitting the Dispositive Motion may, but is not required to, deliver to the arbitrator and to the other party a memorandum in support (the "**Memorandum in Support**") of the Dispositive Motion. Within seven (7) calendar days of delivery of the Memorandum in Support, the other party shall deliver to the arbitrator and to the other party a memorandum in opposition to the Memorandum in Support (the "**Memorandum in Opposition**"). Within seven (7) calendar days of delivery of the Memorandum in Opposition, as applicable, the party that submitted the Memorandum in Support shall deliver to the arbitrator and to the other party a reply memorandum to the Memorandum in Opposition ("**Reply Memorandum**"). If the applicable party shall fail to deliver the Memorandum in Opposition as required above, or if the other party fails to deliver the Reply Memorandum as required above, then the applicable party shall lose its right to so deliver the same, and the Dispositive Motion shall proceed regardless.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7 *Confidentiality*. All information disclosed by either party (or such party's agents) during the Arbitration process (including without limitation information disclosed during the discovery process or any Appeal (defined below)) shall be considered confidential in nature. Each party agrees not to disclose any confidential information received from the other party (or its agents) during the Arbitration process (including without limitation during the discovery process or any Appeal) unless (a) prior to or after the time of disclosure such information becomes public knowledge or part of the public domain, not as a result of any inaction or action of the receiving party or its agents, (b) such information is required by a court order, subpoena or similar legal duress to be disclosed if such receiving party has notified the other party thereof in writing and given it a reasonable opportunity to obtain a protective order from a court of competent jurisdiction prior to disclosure, or (c) such information is disclosed to the receiving party's agents, representatives and legal counsel on a need to know basis who each agree in writing not to disclose such information to any third party. The arbitrator is hereby authorized and directed to issue a protective order to prevent the disclosure of privileged information and confidential information upon the written request of either party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.8 *Authorization; Timing; Scheduling Order*. Subject to all other portions of these Arbitration Provisions, the parties hereby authorize and direct the arbitrator to take such actions and make such rulings as may be necessary to carry out the parties' intent for the Arbitration proceedings to be efficient and expeditious. The parties hereby agree that an Arbitration Award must be made within one hundred twenty (120) calendar days after the Arbitration Commencement Date. The arbitrator is hereby authorized and directed to hold a scheduling conference within ten (10) calendar days after the Arbitration Commencement Date in order to establish a scheduling order with various binding deadlines for discovery, expert testimony, and the submission of documents by the parties to enable the arbitrator to render a decision prior to the end of such 120-day period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.9 *Relief*. The arbitrator shall have the right to award or include in the Arbitration Award (or in a preliminary ruling) any relief which the arbitrator deems proper under the circumstances, including, without limitation, specific performance and injunctive relief, provided that the arbitrator may not award exemplary or punitive damages.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.10 *Fees and Costs*. As part of the Arbitration Award, the arbitrator is hereby directed to require the losing party (the party being awarded the least amount of money by the arbitrator, which, for the avoidance of doubt, shall be determined without regard to any statutory fines, penalties, fees, or other charges awarded to any party) to (a) pay the full amount of any unpaid costs and fees of the Arbitration, and (b) reimburse the prevailing party for all reasonable attorneys' fees, arbitrator costs and fees, deposition costs, other discovery costs, and other expenses, costs or fees paid or otherwise incurred by the prevailing party in connection with the Arbitration.

5. <u>Arbitration Appeal</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 *Initiation of Appeal.* Following the entry of the Arbitration Award, either party (the "**Appellant**") shall have a period of thirty (30) calendar days in which to notify the other party (the "**Appellee**"), in writing, that the Appellant elects to appeal (the "**Appeal**") the Arbitration Award (such notice, an "**Appeal Notice**") to a panel of arbitrators as provided in Paragraph 5.2 below. The date the Appellant delivers an Appeal Notice to the Appellee is referred to herein as the "**Appeal Date**". The Appeal Notice must be delivered to the Appellee in accordance with the provisions of Paragraph 4.1 above with respect to delivery of an Arbitration Notice. In addition, together with delivery of the Appeal Notice to the Appellee, the Appellant must also pay for (and provide proof of such payment to the Appellee together with delivery of the Appeal Notice) a bond in the amount of 110% of the sum the Appellant owes to the Appellee as a result of the Arbitration Award the Appellant is appealing. In the event an Appellant delivers an Appeal Notice to the Appellee (together with proof of payment of the applicable bond) in compliance with the provisions of this Paragraph 5.1, the Appeal will occur as a matter of right and, except as specifically set forth herein, will not be further conditioned. In the event a party does not deliver an Appeal Notice (along with proof of payment of the applicable bond) to the other party within the deadline prescribed in this Paragraph 5.1, such party shall lose its right to appeal the Arbitration Award. If no party delivers an Appeal Notice (along with proof of payment of the applicable bond) to the other party within the deadline described in this Paragraph 5.1, the Arbitration Award shall be final. The parties acknowledge and agree that any Appeal shall be deemed part of the parties' agreement to arbitrate for purposes of these Arbitration Provisions and the Arbitration Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 *Selection and Payment of Appeal Panel.* In the event an Appellant delivers an Appeal Notice to the Appellee (together with proof of payment of the applicable bond) in compliance with the provisions of Paragraph 5.1 above, the Appeal will be heard by a three (3) person arbitration panel (the "**Appeal Panel**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Within ten (10) calendar days after the Appeal Date, the Appellee shall select and submit to the Appellant the names of five (5) arbitrators that are designated as "neutrals" or qualified arbitrators by AAA (https://www.adr.org/) or other arbitration service provider agreed upon by the parties (such five (5) designated persons hereunder are referred to herein as the "**Proposed Appeal Arbitrators**"). For the avoidance of doubt, each Proposed Appeal Arbitrator must be qualified as a "neutral" with AAA or other arbitration service provider agreed upon by the parties, and shall not be the arbitrator who rendered the Arbitration Award being appealed (the "**Original Arbitrator**"). Within five (5) calendar days after the Appellee has submitted to the Appellant the names of the Proposed Appeal Arbitrators, the Appellant must select, by written notice to the Appellee, three (3) of the Proposed Appeal Arbitrators to act as the members of the Appeal Panel. If the Appellant fails to select three (3) of the Proposed Appeal Arbitrators in writing within such 5-day period, then the Appellee may select such three (3) arbitrators from the Proposed Appeal Arbitrators by providing written notice of such selection to the Appellant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If the Appellee fails to submit to the Appellant the names of the Proposed Appeal Arbitrators within ten (10) calendar days after the Appeal Date pursuant to subparagraph (a) above, then the Appellant may at any time prior to the Appellee so designating the Proposed Appeal Arbitrators, identify the names of five (5) arbitrators that are designated as "neutrals" or qualified arbitrators by AAA or other arbitration service provider agreed upon by the parties (none of whom may be the Original Arbitrator) by written notice to the Appellee. The Appellee may then, within five (5) calendar days after the Appellant has submitted notice of its selected arbitrators to the Appellee, select, by written notice to the Appellant, three (3) of such selected arbitrators to serve on the Appeal Panel. If the Appellee fails to select in writing within such 5-day period three (3) of the arbitrators selected by the Appellant to serve as the members of the Appeal Panel, then the Appellant may select the three (3) members of the Appeal Panel from the Appellant's list of five (5) arbitrators by providing written notice of such selection to the Appellee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If a selected Proposed Appeal Arbitrator declines or is otherwise unable to serve, then the party that selected such Proposed Appeal Arbitrator may select one (1) of the other five (5) designated Proposed Appeal Arbitrators within three (3) calendar days of the date a chosen Proposed Appeal Arbitrator declines or notifies the parties he or she is unable to serve as an arbitrator. If at least three (3) of the five (5) designated Proposed Appeal Arbitrators decline or are otherwise unable to serve, then the Proposed Appeal Arbitrator selection process shall begin again in accordance with this Paragraph 5.2; *provided, however*, that any Proposed Appeal Arbitrators who have already agreed to serve shall remain on the Appeal Panel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The date that all three (3) Proposed Appeal Arbitrators selected pursuant to this Paragraph 5.2 agree in writing (including via email) delivered to both the Appellant and the Appellee to serve as members of the Appeal Panel hereunder is referred to herein as the "**Appeal Commencement Date**". No later than five (5) calendar days after the Appeal Commencement Date, the Appellee shall designate in writing (including via email) to the Appellant and the Appeal Panel the name of one (1) of the three (3) members of the Appeal Panel to serve as the lead arbitrator in the Appeal proceedings. Each member of the Appeal Panel shall be deemed an arbitrator for purposes of these Arbitration Provisions and the Arbitration Act, provided that, in conducting the Appeal, the Appeal Panel may only act or make determinations upon the approval or vote of no less than the majority vote of its members, as announced or communicated by the lead arbitrator on the Appeal Panel. If an arbitrator on the Appeal Panel ceases or is unable to act during the Appeal proceedings, a replacement arbitrator shall be chosen in accordance with Paragraph 5.2 above to continue the Appeal as a member of the Appeal Panel. If AAA or other arbitration service provider agreed upon by the parties ceases to exist or to provide a list of neutrals, then the arbitrators for the Appeal Panel shall be selected under the then prevailing rules of the American Arbitration Association.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Subject to Paragraph 5.7 below, the cost of the Appeal Panel must be paid entirely by the Appellant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 *Appeal Procedure.* The Appeal will be deemed an appeal of the entire Arbitration Award. In conducting the Appeal, the Appeal Panel shall conduct a de novo review of all Claims described or otherwise set forth in the Arbitration Notice. Subject to the foregoing and all other provisions of this Paragraph 5, the Appeal Panel shall conduct the Appeal in a manner the Appeal Panel considers appropriate for a fair and expeditious disposition of the Appeal, may hold one or more hearings and permit oral argument, and may review all previous evidence and discovery, together with all briefs, pleadings and other documents filed with the Original Arbitrator (as well as any documents filed with the Appeal Panel pursuant to Paragraph 5.4(a) below). Notwithstanding the foregoing, in connection with the Appeal, the Appeal Panel shall not permit the parties to conduct any additional discovery or raise any new Claims to be arbitrated, shall not permit new witnesses or affidavits, and shall not base any of its findings or determinations on the Original Arbitrator's findings or the Arbitration Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4 *Timing.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Within seven (7) calendar days of the Appeal Commencement Date, the Appellant (i) shall deliver or cause to be delivered to the Appeal Panel copies of the Appeal Notice, all discovery conducted in connection with the Arbitration, and all briefs, pleadings and other documents filed with the Original Arbitrator (which material Appellee shall have the right to review and supplement if necessary), and (ii) may, but is not required to, deliver to the Appeal Panel and to the Appellee a Memorandum in Support of the Appellant's arguments concerning or position with respect to all Claims, counterclaims, issues, or accountings presented or pleaded in the Arbitration. Within seven (7) calendar days of the Appellant's delivery of the Memorandum in Support, as applicable, the Appellee shall deliver to the Appeal Panel and to the Appellant a Memorandum in Opposition to the Memorandum in Support. Within seven (7) calendar days of the Appellee's delivery of the Memorandum in Opposition, as applicable, the Appellant shall deliver to the Appeal Panel and to the Appellee a Reply Memorandum to the Memorandum in Opposition. If the Appellant shall fail to substantially comply with the requirements of clause (i) of this subparagraph (a), the Appellant shall lose its right to appeal the Arbitration Award, and the Arbitration Award shall be final. If the Appellee shall fail to deliver the Memorandum in Opposition as required above, or if the Appellant shall fail to deliver the Reply Memorandum as required above, then the Appellee or the Appellant, as the case may be, shall lose its right to so deliver the same, and the Appeal shall proceed regardless.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Subject to subparagraph (a) above, the parties hereby agree that the Appeal must be heard by the Appeal Panel within thirty (30) calendar days of the Appeal Commencement Date, and that the Appeal Panel must render its decision within thirty (30) calendar days after the Appeal is heard (and in no event later than sixty (60) calendar days after the Appeal Commencement Date).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5 *Appeal Panel Award.* The Appeal Panel shall issue its decision (the "**Appeal Panel Award**") through the lead arbitrator on the Appeal Panel. Notwithstanding any other provision contained herein, the Appeal Panel Award shall (a) supersede in its entirety and make of no further force or effect the Arbitration Award (provided that any protective orders issued by the Original Arbitrator shall remain in full force and effect), (b) be final and binding upon the parties, with no further rights of appeal, (c) be the sole and exclusive remedy between the parties regarding any Claims, counterclaims, issues, or accountings presented or pleaded in the Arbitration, and (d) be promptly payable in United States dollars free of any tax, deduction or offset (with respect to monetary awards). Any costs or fees, including without limitation attorneys' fees, incurred in connection with or incident to enforcing the Appeal Panel Award shall, to the maximum extent permitted by law, be charged against the party resisting such enforcement. The Appeal Panel Award shall include Default Interest (with respect to monetary awards) at the rate specified in the Note for Default Interest both before and after the Arbitration Award. Judgment upon the Appeal Panel Award will be entered and enforced by a state or federal court sitting in the State of Nevada.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6 *Relief.* The Appeal Panel shall have the right to award or include in the Appeal Panel Award any relief which the Appeal Panel deems proper under the circumstances, including, without limitation, specific performance and injunctive relief, provided that the Appeal Panel may not award exemplary or punitive damages.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7 *Fees and Costs.* As part of the Appeal Panel Award, the Appeal Panel is hereby directed to require the losing party (the party being awarded the least amount of money by the arbitrator, which, for the avoidance of doubt, shall be determined without regard to any statutory fines, penalties, fees, or other charges awarded to any party) to (a) pay the full amount of any unpaid costs and fees of the Arbitration and the Appeal Panel, and (b) reimburse the prevailing party (the party being awarded the most amount of money by the Appeal Panel, which, for the avoidance of doubt, shall be determined without regard to any statutory fines, penalties, fees, or other charges awarded to any part) the reasonable attorneys' fees, arbitrator and Appeal Panel costs and fees, deposition costs, other discovery costs, and other expenses, costs or fees paid or otherwise incurred by the prevailing party in connection with the Arbitration (including without limitation in connection with the Appeal).

6. <u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 *Severability.* If any part of these Arbitration Provisions is found to violate or be illegal under applicable law, then such provision shall be modified to the minimum extent necessary to make such provision enforceable under applicable law, and the remainder of the Arbitration Provisions shall remain unaffected and in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 *Governing Law*. Except as otherwise expressly provided for in these Arbitration Provisions, these Arbitration Provisions shall be governed by the laws of the State of Nevada without regard to the conflict of laws principles therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 *Interpretation*. The headings of these Arbitration Provisions are for convenience of reference only and shall not form part of, or affect the interpretation of, these Arbitration Provisions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4 *Waiver*. No waiver of any provision of these Arbitration Provisions shall be effective unless it is in the form of a writing signed by the party granting the waiver.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5 *Time is of the Essence*. Time is expressly made of the essence with respect to each and every provision of these Arbitration Provisions.

[*Remainder of page intentionally left blank*]

**EXHIBIT D**

**FORM OF SECURITY AGREEMENT**

**[attached hereto]**

**DISCLOSURE SCHEDULE**

This Disclosure Schedule has been prepared and delivered in accordance with the Securities Purchase Agreement (the "<u>Agreement</u>"), made and entered into as of March 13, 2026, by and between ALTERNATIVE BALLISTICS CORPORATION (the "Company"), and LENDSPARK CORPORATION. Capitalized terms used in this Disclosure Schedule and not otherwise defined herein shall have the meanings ascribed to such terms in the Agreement.

This Disclosure Schedule relates to and qualifies certain of the representations, warranties, covenants and obligations of the parties to the Agreement.

Headings and subheadings have been inserted in this Disclosure Schedule for convenience of reference only and shall not have the effect of amending or changing the express description thereof as set forth in the Agreement nor in any way limit the effect of any of the disclosures, except as provided in the following sentence. Disclosure of any fact, circumstance or item in this Disclosure Schedule in connection with a particular section, subsection or subclause in the Agreement shall be deemed to have been disclosed or listed (i) with respect to such section, subsection or clause, or (ii) with respect to each other section, subsection or subclause in the Agreement to the extent that it is reasonably apparent from such disclosure that it applies to such other section, subsection or subclause.

No reference to or disclosure of any item or other matter in this Disclosure Schedule shall be construed as an admission, representation or indication that such item or other matter is "material" or out of the ordinary course of business. The Company may, at its option, include in this Disclosure Schedule items that are not material or that are in the ordinary course, and such inclusion, or any references to dollar amounts, shall not be deemed to be an acknowledgement or representation that such items are material or out of the ordinary course of business, to establish any standard of materiality or ordinary course of business, or to define further the meaning of such terms for purposes of the Agreement or otherwise. The information contained in this Disclosure Schedule is disclosed solely for purposes of the Agreement. The parties to the Agreement do not assume any responsibility to any Person that is not a party to the Agreement for the accuracy or completeness of any information set forth in this Disclosure Schedule. In disclosing the information in this Disclosure Schedule, each party to the Agreement expressly does not waive any attorney-client privilege associated with such information or any protection afforded by the work-product doctrine with respect to any of the matters disclosed or discussed herein as to any Person that is not a party to the Agreement.

**Schedule 3.c.** –

Since the last public filing, (i) the following shares have been earned, but have not yet been issued and (ii) the following financial instruments have been issued that contain provisions for common stock issuances:

---

| |
|:---|
| Common stock/stock options to be issued to company's executive team that was earned in FY 2025 per employment agreements – 712,000 shares |
| Common stock to be issued to consultants as fees for consulting services– 255,000 shares |
| Common stock/stock options to be issued to Advisory Board members – 15,000 shares |
| Common stock/stock options to be issued to Board of Director members – 22,500 shares |
| Purchase of common stock through Reg A filing – 1,000 shares |
| On November 14, 2025 and January 14, 2026, the Company issued Convertible Notes to a related party in the principal amount of $15,000 and $10,000, respectively. |
| On January 29, 2026, the Company issued a Convertible Note for $50,000 and a warrant to purchase 50,000 shares of common stock to an investor. |
| On February 2, 2026, the Company issued a Convertible Note for $50,000 and a warrant to purchase 50,000 shares of common stock to an investor. |

---

**Schedule 3.j.**

On November 20, 2025, the Company received a Complaint for Breach of Lease and Money Damages from the landlord of the Company's San Diego office suite for collection of rent and other expenses for an amount of "no less" than $50,000. Counsel has been engaged to represent the Company in this matter and based on initial conversations with plaintiff's counsel the Company anticipates to resolve this matter and settle out of court.

**Schedule 3.n.** –

As noted above in 3. c., on November 14, 2025 and January 14, 2026, the Company issued Convertible Notes to a related party in the principal amount of $15,000 and $10,000, respectively.

**Schedule 4. c. –**

Anticipated use of proceeds may include settlement payment for complaint noted in Schedule 3.j. above.

## Add

**Exhibit 6.31**

NEITHER THIS SECURITY NOR THE SECURITIES AS TO WHICH THIS SECURITY MAY BE EXERCISED HAVE 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. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

**COMMON STOCK PURCHASE WARRANT**

**ALTERNATIVE BALLISTICS CORPORATION**

Warrant Shares: 166,667

Date of Issuance: March 13, 2026 ("<u>Issuance Date</u>")

This COMMON STOCK PURCHASE WARRANT (the "<u>Warrant</u>") certifies that, for value received (in connection with the issuance of the secured promissory note in the principal amount of $550,000.00 to the Holder (as defined below) of even date) (the "Note"), Lendspark Corporation, a California corporation (including any permitted and registered assigns, the "<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 issuance hereof, to purchase from ALTERNATIVE BALLISTICS CORPORATION, a Nevada corporation (the "<u>Company</u>"), 166,667 shares of Common Stock (the "<u>Warrant Shares</u>") (whereby such number may be adjusted from time to time pursuant to the terms and conditions of this Warrant) at the Exercise Price per share then in effect. This Warrant is issued by the Company as of the date hereof in connection with that certain securities purchase agreement dated March 13, 2026, by and among the Company and the Holder (the "<u>Purchase Agreement</u>").

Capitalized terms used in this Warrant shall have the meanings set forth in the Purchase Agreement unless otherwise defined in the body of this Warrant or in Section 16 below. For purposes of this Warrant, the term "Exercise Price" shall mean $5.00, subject to adjustment as provided herein (including but not limited to cashless exercise). "Exercise Period" shall mean the period commencing on the Issuance Date and ending on 5:00 p.m. eastern standard time on the date that is five (5) years after the Issuance Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>EXERCISE OF WARRANT</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) *Mechanics of Exercise*. Subject to the terms and conditions hereof, the rights represented by this Warrant may be exercised in whole or in part at any time or times during the Exercise Period by delivery of a written notice, in the form attached hereto as <u>Exhibit A</u> (the "<u>Exercise Notice</u>"), of the Holder's election to exercise this Warrant. The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. On or before the second Trading Day (the "<u>Warrant Share Delivery Date</u>") following the date on which the Holder sent the Exercise Notice to the Company or the Company's transfer agent, and upon receipt by the Company of payment to the Company of an amount equal to the applicable Exercise Price multiplied by the number of Warrant Shares as to which all or a portion of this Warrant is being exercised (the "<u>Aggregate Exercise Price</u>" and together with the Exercise Notice, the "<u>Exercise Delivery Documents</u>") in cash or by wire transfer of immediately available funds (or by cashless exercise, in which case there shall be no Aggregate Exercise Price provided), the Company shall (or direct its transfer agent to) issue and deliver by overnight courier to the address as specified in the Exercise Notice, a certificate, registered in the Company's share register in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder is entitled pursuant to such exercise (or deliver such shares of Common Stock in electronic format if requested by the Holder). Upon delivery of the Exercise Delivery Documents, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the certificates evidencing such Warrant Shares. If this Warrant is submitted in connection with any exercise and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable and in no event later than three Business Days after any exercise and at its own expense, issue a new Warrant (in accordance with Section 7) representing the right to purchase the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised.

If the Company fails to cause its transfer agent to issue to the Holder the respective shares of Common Stock by the respective Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise in Holder's sole discretion in addition to all other rights and remedies at law, under this Warrant, or otherwise, and such failure shall also be deemed an Event of Default (as defined in the Note) (an "Event of Default") under the Note, a material breach under this Warrant, and a material breach under the Purchase Agreement.

If the Market Price of one share of Common Stock is greater than the Exercise Price, then the Holder may elect to receive Warrant Shares pursuant to a cashless exercise, in lieu of a cash exercise, equal to the value of this Warrant determined in the manner described below (or of any portion thereof remaining unexercised) by delivery of an Exercise Notice, in which event the Company shall issue to Holder a number of Common Stock computed using the following formula:

X = <u>Y (A-B)</u> <br> A

---

| | | |
|:---|:---|:---|
| Where | X = | the number of Shares to be issued to Holder. |
|  | Y = | the number of Warrant Shares that the Holder elects to purchase under this Warrant (at the date of such calculation). |
|  | A = | the Market Price (at the date of such calculation). |
|  | B = | Exercise Price (as adjusted to the date of such calculation). |

---

&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) *No Fractional Shares*. No fractional shares shall be issued upon the exercise of this Warrant as a consequence of any adjustment pursuant hereto. All Warrant Shares (including fractions) issuable upon exercise of this Warrant may be aggregated for purposes of determining whether the exercise would result in the issuance of any fractional share. If, after aggregation, the exercise would result in the issuance of a fractional share, the Company shall, in lieu of issuance of any fractional share, pay the Holder otherwise entitled to such fraction a sum in cash equal to the product resulting from multiplying the then-current fair market value of a Warrant Share by such fraction.

&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) *Holder's Exercise Limitations*. Notwithstanding anything to the contrary contained herein, 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 1 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Exercise Notice, 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 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, nonexercised 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 nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) 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 1(c), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Holder is solely responsible for any schedules required to be filed in accordance therewith. 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 1(c), 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 Company's 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 two Trading Days 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 at the time of the respective calculation hereunder. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) *Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise*. In addition to any other rights available to the Holder, if the Company fails to cause the Company's transfer agent to deliver to the Holder the Warrant Shares in accordance with the provisions of this Warrant (including but not limited to Section 1(a) above pursuant to an exercise on or before the respective 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 Shares which the Holder anticipated receiving upon such exercise (a "Buy-In"), then the Company shall (A) pay in cash to the Holder, within one (1) Business Day of Holder's request, 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 Shares 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 Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder within one (1) Business Day of Holder's request 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, or effectuates a cashless exercise hereunder for, 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;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>ADJUSTMENTS</u>. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 2.

&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>Stock Dividends and Splits</u>. Without limiting any provision of Section 2(b), Section 3 or Section 4, if the Company, at any time on or after the Issuance Date, (i) pays a stock dividend on one or more classes of its then outstanding shares of Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its then outstanding shares of Common Stock into a larger number of shares or (iii) combines (by combination, reverse stock split or otherwise) one or more classes of its then outstanding shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination. If any event requiring an adjustment under this paragraph occurs during the period that an Exercise Price is calculated hereunder, then the calculation of such Exercise Price shall be adjusted appropriately to reflect such 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;(b) <u>Adjustment Upon Issuance of Shares of Common Stock</u>. If and whenever on or after the Issuance Date, the Company grants, issues or sells (or enters into any agreement to grant, issue or sell), or in accordance with this Section 2 is deemed to have granted, issued or sold, any shares of Common Stock (including the issuance or sale of shares of Common Stock owned or held by or for the account of the Company) for a consideration per share (the "New Issuance Price") less than a price equal to the Exercise Price in effect immediately prior to such granting, issuance or sale or deemed granting, 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 2(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;&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 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 or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise pursuant to the terms thereof is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the granting, issuance or sale (or the time of execution of such agreement to grant, issue or sell, as applicable) of such Option for such price per share. For purposes of this Section 2(b)(i), the "lowest price per share for which one share of Common Stock is at any time issuable upon the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise pursuant to the terms thereof" shall be equal to (1) 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 (or pursuant to the agreement to grant, issue or sell, as applicable) of such Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option or otherwise pursuant to the terms thereof and (y) the lowest exercise price set forth in such Option 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 or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise pursuant to the terms thereof minus (2) the sum of all amounts paid or payable to the holder of such Option (or any other Person) upon the granting, issuance or sale (or the agreement to grant, issue or sell, as applicable) of such Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option 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 (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 Convertible Securities upon the exercise of such Options 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 Convertible 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;&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 Convertible Securities 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 share 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 (or the time of execution of such agreement to issue or sell, as applicable) of such Convertible Securities for such price per share. For the purposes of this Section 2(b)(ii), 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" shall be equal to (1) 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 (or pursuant to the agreement to issue or sell, as applicable) of the Convertible Security and upon conversion, exercise or exchange of such Convertible Security or otherwise pursuant to the terms thereof and (y) the lowest conversion price set forth in such Convertible Security 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 (2) the sum of all amounts paid or payable to the holder of such Convertible Security (or any other Person) upon the issuance or sale (or the agreement to issue or sell, as applicable) of such Convertible Security plus the value of any other consideration received or receivable by, or benefit conferred on, the holder of such Convertible Security (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 Convertible Securities or otherwise pursuant to the terms thereof, and if any such issuance or sale of such Convertible Securities 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 2(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;&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 Convertible Securities, or the rate at which any Convertible Securities 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 2(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 Convertible Securities 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 2(b)(iii), if the terms of any Option or Convertible Security (including, without limitation, any Option or Convertible Security that was outstanding as of the Issuance Date) are increased or decreased in the manner described in the immediately preceding sentence, then such Option or Convertible Security 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 2(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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>[Intentionally Omitted]</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;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>Record Date</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, Options or in Convertible Securities or (B) to subscribe for or purchase shares of Common Stock, Options or Convertible Securities, 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;(c) <u>Holder's Right of Alternative Exercise Price Following Issuance of Certain Options or Convertible Securities</u>. In addition to and not in limitation of the other provisions of this Section 2, if the Company in any manner issues or sells or enters into any agreement to issue or sell, any Common Stock, Options or Convertible Securities (any such securities, "Variable Price Securities") after the Issuance Date that are issuable pursuant to such agreement or convertible into or exchangeable or exercisable for shares of Common Stock at a price which varies or may vary with the market price of the shares of Common Stock, including by way of one or more reset(s) to a fixed price, but exclusive of such formulations reflecting customary anti-dilution provisions (such as share splits, share combinations, share dividends and similar transactions) (each of the formulations for such variable price being herein referred to as, the "Variable Price"), the Company shall provide written notice thereof via electronic mail and overnight courier to the Holder on the date of such agreement and the issuance of such Common Stock, Convertible Securities or Options. From and after the date the Company enters into such agreement or issues any such Variable Price Securities, the Holder shall have the right, but not the obligation, in its sole discretion to substitute the Variable Price, as calculated pursuant to the agreements governing such Variable Price Securities, for the Exercise Price upon exercise of this Warrant by designating in the Exercise Notice delivered upon any exercise of this Warrant that solely for purposes of such exercise the Holder is relying on the Variable Price rather than the Exercise Price then in effect. The Holder's election to rely on a Variable Price for a particular exercise of this Warrant shall not obligate the Holder to rely on a Variable Price for any future exercises of this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Stock Combination Event Adjustment</u>. If at any time and from time to time on or after the Issuance Date there occurs any stock split, stock dividend, stock combination recapitalization or other similar transaction involving the Common Stock (each, a "Stock Combination Event", and such date thereof, the "Stock Combination Event Date") and the Event Market Price is less than the Exercise Price then in effect (after giving effect to the adjustment in clause 2(a) above), then on the sixteenth (16th) Trading Day immediately following such Stock Combination Event, the Exercise Price then in effect on such sixteenth (16th) Trading Day (after giving effect to the adjustment in clause 2(a) above) shall be reduced (but in no event increased) to the Event Market Price. For the avoidance of doubt, if the adjustment in the immediately preceding sentence would otherwise result in an increase in the Exercise Price hereunder, no adjustment shall be made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Other Events</u>. In the event that the Company (or any Subsidiary (as defined in the Purchase Agreement)) shall take any action to which the provisions hereof are not strictly applicable, or, if applicable, would not operate to protect the Holder from actual dilution or if any event occurs of the type contemplated by the provisions of this Section 2 but not expressly provided for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company's board of directors shall in good faith determine and implement an appropriate adjustment in the Exercise Price and the number of Warrant Shares (if applicable) so as to protect the rights of the Holder, provided that no such adjustment pursuant to this Section 2(e) will increase the Exercise Price or decrease the number of Warrant Shares as otherwise determined pursuant to this Section 2, provided further that if the Holder does not accept such adjustments as appropriately protecting its interests hereunder against such dilution, then the Company's board of directors and the Holder shall agree, in good faith, upon an independent investment bank of nationally recognized standing to make such appropriate adjustments, whose determination shall be final and binding absent manifest error and whose fees and expenses shall be borne 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;(f) <u>Calculations</u>. All calculations under this Section 2 shall be made by rounding to the nearest cent or the nearest 1/100<sup>th</sup> of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issuance or sale 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;(g) <u>Voluntary Adjustment By Company</u>. Subject to the rules and regulations of the Principal Market, the Company may at any time during the term of this Warrant, with the prior written consent of the Holder, reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Number of Warrant Shares</u>. Simultaneously with any adjustment to the Exercise Price pursuant to this Section 2, the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on exercise contained herein). For the avoidance of doubt, the aggregate Exercise Price payable prior to such adjustment is calculated as follows: the total number of Warrant Shares issuable upon exercise of this Warrant immediately prior to such adjustment (without regard to the Beneficial Ownership Limitation) multiplied by the Exercise Price in effect immediately prior to such adjustment. By way of example, if E is the total number of Warrant Shares issuable upon exercise of this Warrant immediately prior to such adjustment (without regard to the Beneficial Ownership Limitation), F is the Exercise Price in effect immediately prior to such adjustment, and G is the Exercise Price in effect immediately after such adjustment, the adjustment to the number of Warrant Shares can be expressed in the following formula: Total number of Warrant Shares after such adjustment = the number obtained from dividing [E x F] by G.

&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>Notice</u>. In addition to all other notice(s) required under this Section 2, the Company shall also notify the Holder in writing, no later than the Trading Day following any adjustment to the Warrant under this Section 2, indicating therein the occurrence of such applicable exercise price and warrant share adjustment (such notice the "Adjustment Notice"). For purposes of clarification, regardless of whether (i) the Company provides an Adjustment Notice pursuant to this Section 2 or (ii) the Holder accurately refers to the number of Warrant Shares or Exercise Price in the Exercise Notice, the Holder is entitled to receive the adjustments to the number of Warrant Shares and Exercise Price at all times on and after the date of such adjustment event.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>RIGHTS UPON DISTRIBUTION OF ASSETS</u>. In addition to any adjustments pursuant to Section 2 above or Section 4(a) below, 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 Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property, options, evidence of indebtedness or any other assets 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 or restrictions on exercise of this Warrant, including without limitation, the Beneficial Ownership Limitation) immediately before the date on 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 and the other Attribution Parties exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to the extent of the Beneficial Ownership Limitation (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Distribution (and beneficial ownership) to the extent of any such excess) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time or times, if ever, as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Beneficial Ownership Limitation, at which time or times the Holder shall be granted such Distribution (and any Distributions declared or made on such initial Distribution or on any subsequent Distribution held similarly in abeyance) to the same extent as if there had been no such limitation).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS</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>Purchase Rights</u>. In addition to any adjustments pursuant to Sections 2 or 3 above, if at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class 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 or restrictions on exercise of this Warrant, 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, issuance or sale of such Purchase Rights (<u>provided</u>, <u>however</u>, that to the extent that the Holder's right to participate in any such Purchase Right would result in the Holder and the other Attribution Parties exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to the extent of the Beneficial Ownership Limitation (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Purchase Right (and beneficial ownership) to the extent of any such excess) and such Purchase Right to such extent shall be held in abeyance for the benefit of the Holder until such time or times, if ever, as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Beneficial Ownership Limitation, at which time or times the Holder shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent Purchase Right held similarly in abeyance) to the same extent as if there had been no such 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;(b) <u>Fundamental Transactions</u>. The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity assumes in writing all of the obligations of the Company under this Warrant and the other Transaction Documents (as defined in the Purchase Agreement) in accordance with the provisions of this Section 4(b) pursuant to written agreements in form and substance satisfactory to the Holder and approved by the Holder prior to such Fundamental Transaction, including agreements to 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, including, without limitation, which is exercisable for a corresponding number of shares of capital stock 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 adjustments to the 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). Upon the consummation of each Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of the applicable 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. Upon consummation of each Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of this Warrant prior to the applicable Fundamental Transaction, such shares of publicly traded common stock (or its equivalent) of the Successor Entity (including its Parent Entity) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant), as adjusted in accordance with the provisions of this Warrant. Notwithstanding the foregoing, and without limiting Section 1(c) hereof, the Holder may elect, at its sole option, by delivery of written notice to the Company to waive this Section 4(b) to permit the Fundamental Transaction without the assumption of this Warrant. In addition to and not in substitution for any other rights hereunder, prior to the consummation of each Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Common Stock (a "Corporate Event"), the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive upon an exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction but prior to the Expiration Date, in lieu of the shares of the Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of the Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant) (the "Corporate Event Consideration"). Provision made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the Holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>NON-CIRCUMVENTION</u>. The Company covenants and agrees that it will not, by amendment of its articles of incorporation, bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, 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, and will at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon the exercise of this Warrant, and (iii) shall, for so long as this Warrant is outstanding, have authorized and reserved, free from preemptive rights, five (5) times the number of shares of Common Stock into which the Warrants are then exercisable into to provide for the exercise of the rights represented by this Warrant (without regard to any limitations on exercise).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>WARRANT HOLDER NOT DEEMED A STOCKHOLDER</u>. Except as otherwise specifically provided herein, the Holder, solely in its capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in its capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which it is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices and other information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7. <u>REISSUANCE</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) *Lost, Stolen or Mutilated Warrant*. If this Warrant is lost, stolen, mutilated or destroyed, the Company will, on such terms as to indemnity or otherwise as it may reasonably impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed.

&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) *Issuance of New Warrants*. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant shall be of like tenor with this Warrant, and shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>TRANSFER</u>. This Warrant shall be binding upon the Company and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. Notwithstanding anything to the contrary herein, the rights, interests or obligations of the Company hereunder may not be assigned, by operation of law or otherwise, in whole or in part, by the Company without the prior signed written consent of the Holder, which consent may be withheld at the sole discretion of the Holder (any such assignment or transfer shall be null and void if the Company does not obtain the prior signed written consent of the Holder). This Warrant or any of the severable rights and obligations inuring to the benefit of or to be performed by Holder hereunder may be assigned by Holder to a third party, in whole or in part, without the need to obtain the Company's consent thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>NOTICES</u>. Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance with the notice provisions contained in the Purchase Agreement. The Company shall provide the Holder with prompt written notice (i) immediately upon any adjustment of the Exercise Price, setting forth in reasonable detail, the calculation of such adjustment and (ii) at least 20 days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of any stock or other securities directly or indirectly convertible into or exercisable or exchangeable for shares of Common Stock or other property, pro rata to the holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>DISCLOSURE</u>. Upon delivery by the Company to the Holder (or receipt by the Company from the Holder) of any notice in accordance with the terms of this Warrant, unless the Company has in good faith determined that the matters relating to such notice do not constitute material, non-public information relating to the Company or any of its Subsidiaries, the Company shall on or prior to 9:00 am, New York city time on the Business Day immediately following such notice delivery date, publicly disclose such material, non-public information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material, non-public information relating to the Company or any of its Subsidiaries, the Company so shall indicate to the Holder explicitly in writing in such notice (or immediately upon receipt of notice from the Holder, as applicable), and in the absence of any such written indication in such notice (or notification from the Company immediately upon receipt of notice from the Holder), the Holder shall be entitled to presume that information contained in the notice does not constitute material, non-public information relating to the Company or any of its Subsidiaries. Nothing contained in this Section 10 shall limit any obligations of the Company, or any rights of the Holder, under the Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>ABSENCE OF TRADING AND DISCLOSURE RESTRICTIONS</u>. The Company acknowledges and agrees that the Holder is not a fiduciary or agent of the Company and that the Holder shall have no obligation to (a) maintain the confidentiality of any information provided by the Company or (b) refrain from trading any securities while in possession of such information in the absence of a written non-disclosure agreement signed by an officer of the Holder that explicitly provides for such confidentiality and trading restrictions. In the absence of such an executed, written non-disclosure agreement and subject to compliance with any applicable securities laws, the Company acknowledges that the Holder may freely trade in any securities issued by the Company, may possess and use any information provided by the Company in connection with such trading activity, and may disclose any such information to any third party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u>AMENDMENT AND WAIVER</u>. The terms of this Warrant may be amended or waived (either generally or in a particular instance and either retroactively or prospectively) only with the signed written consent of the Company and the Holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. <u>ARBITRATION OF CLAIMS; GOVERNING LAW; AND VENUE</u>. The Company and Holder shall submit all Claims (as defined in Exhibit C of the Purchase Agreement) (the "Claims") arising under this Warrant or any other agreement between the parties and their affiliates or any Claim relating to the relationship of the parties to binding arbitration pursuant to the arbitration provisions set forth in Exhibit C of the Purchase Agreement (the "Arbitration Provisions"). The Company and Holder hereby acknowledge and agree that the Arbitration Provisions are unconditionally binding on the Company and Holder hereto and are severable from all other provisions of this Warrant. By executing this Warrant, Company represents, warrants and covenants that Company has reviewed the Arbitration Provisions carefully, consulted with legal counsel about such provisions (or waived its right to do so), understands that the Arbitration Provisions are intended to allow for the expeditious and efficient resolution of any dispute hereunder, agrees to the terms and limitations set forth in the Arbitration Provisions, and that Company will not take a position contrary to the foregoing representations. The Company acknowledges and agrees that Holder may rely upon the foregoing representations and covenants of the Company regarding the Arbitration Provisions. This Warrant shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State of Nevada, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Nevada or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Nevada. The Company and Holder consent to and expressly agree that the exclusive venue for arbitration of any Claims arising under this Warrant or any other agreement between the Company and Holder or their respective affiliates (including but not limited to the Transaction Documents) or any Claim relating to the relationship of the Company and Holder or their respective affiliates shall be in San Diego County, State of California. Without modifying the Company's and Holder's obligations to resolve disputes hereunder pursuant to the Arbitration Provisions, for any litigation arising in connection with any of the Transaction Documents (and notwithstanding the terms (specifically including any governing law and venue terms) of any transfer agent services agreement or other agreement between the Company's transfer agent and the Company, such litigation specifically includes, without limitation any action between or involving Company and the Company's transfer agent under the Irrevocable Transfer Agent Instructions (as defined in the Purchase Agreement) or otherwise related to Holder in any way (specifically including, without limitation, any action where Company seeks to obtain an injunction, temporary restraining order, or otherwise prohibit the Company's transfer agent from issuing shares of Common Stock to Holder for any reason)), each party hereto hereby (i) consents to and expressly submits to the exclusive personal jurisdiction of any state or federal court sitting in San Diego County, State of California, (ii) expressly submits to the exclusive venue of any such court for the purposes hereof, (iii) agrees to not bring any such action (specifically including, without limitation, any action where Company seeks to obtain an injunction, temporary restraining order, or otherwise prohibit the Company's transfer agent from issuing shares of Common Stock to Holder for any reason) outside of any state or federal court sitting in San Diego County, State of California, and (iv) waives any claim of improper venue and any claim or objection that such courts are an inconvenient forum or any other claim, defense or objection to the bringing of any such proceeding in such jurisdiction or to any claim that such venue of the suit, action or proceeding is improper. Notwithstanding anything in the foregoing to the contrary, nothing herein (i) shall limit, or shall be deemed or construed to limit, the ability of the Holder to realize on any collateral or any other security, or to enforce a judgment or other court ruling in favor of the Holder, including through a legal action in any court of competent jurisdiction, or (ii) shall limit, or shall be deemed or construed to limit, any provision of Section 15 of this Warrant. The Company hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any objection to jurisdiction and venue of any action instituted hereunder, any claim that it is not personally subject to the jurisdiction of any such court, and any claim that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper (including but not limited to based upon *forum non conveniens)*. **THE COMPANY 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 WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTIONS CONTEMPLATED HEREBY.** The Company irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Warrant or any other agreement, certificate, instrument or document contemplated hereby or thereby by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to Company at the address in effect for notices to it under this Warrant 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 law. The prevailing party in any action or dispute brought in connection with this Warrant or any other agreement, certificate, instrument or document contemplated hereby or thereby shall be entitled to recover from the other party its reasonable attorney's fees and costs. If any provision of this Warrant shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Warrant in that jurisdiction or the validity or enforceability of any provision of this Warrant in any other jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. <u>ACCEPTANCE</u>. Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to all of the terms and conditions contained herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. <u>DISPUTE RESOLUTION</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>Submission to Dispute Resolution</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) Notwithstanding anything to the contrary in this Warrant, in the case of a dispute relating to the Exercise Price, the Closing Sale Price, the Closing Bid Price, or fair market value or the arithmetic calculation of the number of Warrant Shares (as the case may be) (including, without limitation, a dispute relating to the determination of any of the foregoing) (the "Warrant Calculations"), the Company or the Holder (as the case may be) shall submit the dispute to the other party via electronic mail (A) if by the Company, within two (2) Trading Days after the occurrence of the circumstances giving rise to such dispute or (B) if by the Holder, at any time after the Holder learned of the circumstances giving rise to such dispute. If the Holder and the Company are unable to agree upon such determination or calculation within two (2) Trading Days following such initial notice by the Company or the Holder (as the case may be) of such dispute to the Company or the Holder (as the case may be), then the Holder may, at its sole option, submit the dispute to an independent, reputable investment bank or independent, outside accountant selected by the Holder (the "Independent Third Party"), and the Company shall pay all expenses of such Independent Third 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Holder and the Company shall each deliver to such Independent Third Party (A) a copy of the initial dispute submission so delivered in accordance with the first sentence of this Section 15(a) and (B) written documentation supporting its position with respect to such dispute, in each case, no later than 5:00 p.m. (New York time) by second (2nd) Business Day immediately following the date on which the Holder selected such Independent Third Party (the "Dispute Submission Deadline") (the documents referred to in the immediately preceding clauses (A) and (B) are collectively referred to herein as the "Required Dispute Documentation") (it being understood and agreed that if either the Holder or the Company fails to so deliver all of the Required Dispute Documentation by the Dispute Submission Deadline, then the party who fails to so submit all of the Required Dispute Documentation shall no longer be entitled to (and hereby waives its right to) deliver or submit any written documentation or other support to such Independent Third Party with respect to such dispute and such Independent Third Party shall resolve such dispute based solely on the Required Dispute Documentation that was delivered to such Independent Third Party prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by both the Company and the Holder or otherwise requested by such Independent Third Party, neither the Company nor the Holder shall be entitled to deliver or submit any written documentation or other support to such Independent Third Party in connection with such dispute, other than the Required Dispute Documentation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 Company and the Holder shall cause such Independent Third Party to determine the resolution of such dispute and notify the Company and the Holder of such resolution no later than five (5) Business Days immediately following the Dispute Submission Deadline. The fees and expenses of such Independent Third Party shall be borne solely by the Company, and such Independent Third Party's resolution of such dispute shall be final and binding upon all parties absent manifest error.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Miscellaneous</u>. The Company expressly acknowledges and agrees that (i) this Section 15 constitutes an agreement to arbitrate between the Company and the Holder (and constitutes an arbitration agreement) under the rules then in effect under the Nevada Rules of Civil Procedure ("NRCP") and that the Holder is authorized to apply for an order to compel arbitration pursuant to the NRCP in order to compel compliance with this Section 15, (ii) a dispute relating to the Warrant Calculations includes, without limitation, disputes as to (A) whether an issuance or sale or deemed issuance or sale of Common Stock occurred under Section 2 of this Warrant, (B) the consideration per share at which an issuance or deemed issuance of Common Stock occurred, (C) whether any issuance or sale or deemed issuance or sale of Common Stock was an issuance or sale or deemed issuance or sale, (D) whether an agreement, instrument, security or the like constitutes an Option or Convertible Security and (E) whether a Dilutive Issuance occurred, (iii) the terms of this Warrant and each other applicable Transaction Document shall serve as the basis for the selected Independent Third Party's resolution of the applicable dispute, such Independent Third Party shall be entitled (and is hereby expressly authorized) to make all findings, determinations and the like that such Independent Third Party determines are required to be made by such Independent Third Party in connection with its resolution of such dispute (including, without limitation, determining (A) whether an issuance or sale or deemed issuance or sale of Common Stock occurred under Section 2 of this Warrant, (B) the consideration per share at which an issuance or deemed issuance of Common Stock occurred, (C) whether any issuance or sale or deemed issuance or sale of Common Stock was an issuance or sale or deemed issuance or sale, (D) whether an agreement, instrument, security or the like constitutes an Option or Convertible Security and (E) whether a Dilutive Issuance occurred) and in resolving such dispute such Independent Third Party shall apply such findings, determinations and the like to the terms of this Warrant and any other applicable Transaction Documents, (iv) the Holder (and only the Holder), in its sole discretion, shall have the right to submit any dispute described in this Section 15 to any other jurisdiction provided for in Section 13 of this Warrant in lieu of utilizing the procedures set forth in this Section 15, and (v) nothing in this Section 15 shall limit the Holder from obtaining any injunctive relief or other equitable remedies (including, without limitation, with respect to any matters described in this Section 15).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. <u>CERTAIN DEFINITIONS</u>. For purposes of this Warrant, 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>Affiliate</u>" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person, it being understood for purposes of this definition that "control" of a Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

&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) [Intentionally Omitted].

&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) [Intentionally Omitted].

&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>Bloomberg</u>" means Bloomberg, L.P.

&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>Business Day</u>" means any day other than Saturday, Sunday or other day on which commercial banks in the State of Nevada are authorized or required by law to remain closed; <u>provided</u>, <u>however</u>, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to "stay at home", "shelter-in-place", "non-essential employee" or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in the State of Nevada generally are open for use by customers on such day.

&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>Change of Control</u>" means any Fundamental Transaction other than (i) any merger of the Company or any of its, direct or indirect, wholly-owned Subsidiaries with or into any of the foregoing Persons, (ii) any reorganization, recapitalization or reclassification of the shares of Common Stock in which holders of the Company's voting power immediately prior to such reorganization, recapitalization or reclassification continue after such reorganization, recapitalization or reclassification to hold publicly traded securities and, directly or indirectly, are, in all material respects, the holders of the voting power of the surviving entity (or entities with the authority or voting power to elect the members of the board of directors (or their equivalent if other than a corporation) of such entity or entities) after such reorganization, recapitalization or reclassification, (iii) pursuant to a migratory merger effected solely for the purpose of changing the jurisdiction of incorporation of the Company or any of its Subsidiaries or (iv) bone fide arm's length acquisitions by the Company with one or more third parties as long as holders of the Company's voting power as of the Issuance Date continue after such acquisition to hold publicly traded securities and, directly or indirectly, are, in all material respects, the holders of at least 51% of the voting power of the surviving entity (or entities with the authority or voting power to elect the members of the board of directors (or their equivalent if other than a corporation) of such entity or entities) after such acquisition.

&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>Closing Bid Price</u>" and "<u>Closing Sale Price</u>" means, for any security as of any date, (i) the last closing bid price and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg or other similar quotation service provider designated by the Holder, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing trade price, then the last trade price of such security prior to 4:00 p.m., New York time, as reported by Bloomberg or other similar quotation service provider designated by the Holder, or (ii) if the foregoing does not apply, the last trade price of such security in the over-the-counter market for such security as reported by Bloomberg or other similar quotation service provider designated by the Holder, or (iii) if no last trade price is reported for such security by Bloomberg or other similar quotation service provider designated by the Holder, the average of the bid and ask prices of any market makers for such security as reported by Bloomberg or other similar quotation service provider designated by the Holder. If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 15. All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation 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;(h) "<u>Common Stock</u>" means the Company's common stock, par value $0.001, and any other class of securities into which such securities may hereafter be reclassified or changed.

&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>Common Stock Equivalents</u>" means any securities of the Company that would entitle the holder thereof to acquire at any time Common Stock, including without limitation any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, 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;(j) "<u>Convertible Securities</u>" means any stock 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;(k) "<u>Eligible Market</u>" means The New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, the Nasdaq Global Market, Nasdaq Capital Market, or equivalent national securities exchange.

&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>Event Market Price</u>" means, with respect to any Stock Combination Event Date, the quotient determined by dividing (x) the sum of the VWAP of the Common Stock for each of the five (5) lowest Trading Days during the twenty (20) consecutive Trading Day period ending and including the Trading Day immediately preceding the sixteenth (16th) Trading Day after such Stock Combination Event Date, divided by (y) five (5). All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction during such 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;(m) [Intentionally Omitted].

&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>Options</u>" means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible 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;(o) "<u>Fundamental Transaction</u>" means (A) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company or any of its "significant subsidiaries" (as defined in Rule 1-02 of Regulation S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject to or have its Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange offer that is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated with any Subject Entities making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares of Common Stock such that all Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Subject Entities whereby all such Subject Entities, individually or in the aggregate, acquire, either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its Common Stock, (B) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the "beneficial owner" (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance, tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination, reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock not held by all such Subject Entities as of the date of this Warrant calculated as if any shares of Common Stock held by all such Subject Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock or other equity securities of the Company sufficient to allow such Subject Entities to effect a statutory short form merger or other transaction requiring other shareholders of the Company to surrender their shares of Common Stock without approval of the shareholders of the Company or (C) directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, the issuance of or the entering into any other instrument or transaction structured in a manner to circumvent, or that circumvents, the intent of this definition in which case this definition shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary to correct this definition or any portion of this definition which may be defective or inconsistent with the intended treatment of such instrument or 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;(p) "<u>Parent Entity</u>" of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the 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;(q) "<u>Person</u>" and "<u>Persons</u>" means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and any governmental entity or any department or agency 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;(r) "<u>Principal Market</u>" means the principal securities exchange or trading market where such Common Stock is listed or quoted, including but not limited to any tier of the OTC Markets, any tier of the NASDAQ Stock Market (including NASDAQ Capital Market), or the NYSE American, or any successor to such markets.

&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>Market Price</u>" means the highest traded price of the Common Stock during the thirty Trading Days prior to the date of the respective Exercise 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;(t) "<u>Successor Entity</u>" means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from or surviving any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental Transaction shall have been entered into.

&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>Trading Day</u>" means any day on which the Common Stock is listed or quoted on its Principal Market, provided, however, that if the Common Stock is not then listed or quoted on any Principal Market, then any calendar day.

&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>VWAP</u>" means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market (or, if the Principal Market is not the principal trading market for such security, then on the principal securities exchange or securities market on which such security is then traded), during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m., New York time, as reported by Bloomberg or other similar quotation service provider designated by the Holder through its "VAP" function (set to 09:30 start time and 16:00 end time) or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m., New York time, as reported by Bloomberg or other similar quotation service provider designated by the Holder, or, if no dollar volume-weighted average price is reported for such security by Bloomberg or other similar quotation service provider designated by the Holder for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices). If the VWAP cannot be calculated for such security on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 15. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction during such period.

\* \* \* \* \* \* \*

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed as of the Issuance Date set forth above.

---

| | |
|:---|:---|
| **ALTERNATIVE BALLISTICS CORPORATION** | **ALTERNATIVE BALLISTICS CORPORATION** |
|  | */s/ Steven Luna* |
| Name: | Steven Luna |
| Title: | Chief Executive Officer |

---

<u>EXHIBIT A</u>

**EXERCISE NOTICE**

(To be executed by the registered holder to exercise this Common Stock Purchase Warrant)

THE UNDERSIGNED holder hereby exercises the right to purchase<u> </u>of the shares of Common Stock ("Warrant Shares") of ALTERNATIVE BALLISTICS CORPORATION, a Nevada corporation (the "Company"), evidenced by the attached copy of the Common Stock Purchase Warrant (the "Warrant"). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

1. <u>Form of Exercise Price</u>. The Holder intends that payment of the Exercise Price shall be made
 as (check one):

☐ a cash exercise with respect to ________________Warrant Shares; or <br> ☐ by cashless exercise pursuant to the Warrant.

2. <u>Payment of Exercise Price</u>. If cash exercise is selected above, the holder shall pay the applicable
 Aggregate Exercise Price in the sum of $______________<u> </u> to the Company in accordance
 with the terms of the Warrant.

3. <u>Delivery of Warrant Shares</u>. The Company shall deliver to the holder ________________Warrant Shares
 in accordance with the terms of the Warrant.

---

| | |
|:---|:---|
| Date: ______________________________ |  |
|  | (Print Name of Registered Holder) |
|  | By: |
|  | Name: |
|  | Title: |

---

<u>EXHIBIT B</u>

**ASSIGNMENT OF WARRANT**

(To be signed only upon authorized transfer of the Warrant)

FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto __________________________<u> </u>the right to purchase _______________shares of common stock of ALTERNATIVE BALLISTICS CORPORATION, to which the within Common Stock Purchase Warrant relates and appoints _________, as attorney-in-fact, to transfer said right on the books of ALTERNATIVE BALLISTICS CORPORATION with full power of substitution and re-substitution in the premises. By accepting such transfer, the transferee has agreed to be bound in all respects by the terms and conditions of the within Warrant.

---

| | |
|:---|:---|
| Dated: ___________________ |  |
|  | (Signature) \* |
|  | (Name) |
|  | (Address) |
|  | (Social Security or Tax Identification No.) |

---

\* The signature on this Assignment of Warrant must correspond to the name as written upon the face of the Common Stock Purchase Warrant in every particular without alteration or enlargement or any change whatsoever. When signing on behalf of a corporation, partnership, trust or other entity, please indicate your position(s) and title(s) with such entity.

## Add

**Exhibit 6.32**

**AMENDMENT #1 TO THE SECURITIES PURCHASE AGREEMENT**

THIS AMENDMENT #1 to the SPA (as defined below) (the "Amendment") is entered into as of March 17, 2026, but made effective as of March 13, 2026 (the "Effective Date"), by and between ALTERNATIVE BALLISTICS CORPORATION, a Nevada corporation (the "Company"), and LENDSPARK CORPORATION, a California corporation (the "Holder", and collectively with the Company, the "Parties").

**BACKGROUND**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. The Company and Holder are the parties to that certain securities purchase agreement dated March 13, 2026 (as amended from time to time, the "SPA"); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. The Parties desire to amend the SPA as set forth expressly below.

NOW THEREFORE, in consideration of the execution and delivery of the Amendment and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree 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;1. The reference to "$9,000.00" in Section 1(b) of the SPA shall be replaced with "$15,000.00"*.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Section 8(a) of the SPA shall apply to this Amendment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. This Amendment shall be deemed part of, but shall take precedence over and supersede any provisions to the contrary contained in the SPA. Except as specifically modified hereby, all of the provisions of the SPA, which are not in conflict with the terms of this Amendment, shall remain in full force and 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;4. This Amendment may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

*[Signature page to follow]*

 

IN WITNESS WHEREOF, the Parties hereto have executed this Amendment as of the date first above written.

**ALTERNATIVE BALLISTICS CORPORATION**

---

| | |
|:---|:---|
| By: | */s/ STEVEN LUNA* |
| Name: | STEVEN LUNA |
| Title: | CHIEF EXECUTIVE OFFICER |

---

**LENDSPARK CORPORATION**

---

| | |
|:---|:---|
| By: | */s/ DAVID CLARK* |
| Name: | DAVID CLARK |
| Title: | MEMBER |

---

## Form 1-K Filing Summary

### Filer Information

**Issuer CIK:** 0001834868

**Issuer CCC:** XXXXXXXX

**Is filer a shell company?:** No

**Is this filing by a successor company?:** No

### Submission Contact Information

**Is this a LIVE or TEST Filing?:** LIVE

**Period:** 12-31-2025

### Item 1: Issuer Information (Tab 1 Notification)

**Type of Report:** Annual Report

**Fiscal Year End:** 12-31-2025

**Exact Name of Issuer:** Alternative Ballistics Corporation

**CIK:** 0001834868

**Jurisdiction of Incorporation:** NV

**IRS Number:** 85-2764555

**Address:** 5940 S. Rainbow Blvd., Las Vegas, NV 89118

**Issuer Phone Number:** 619-326-4411

**Title of each class of securities issued pursuant to Regulation A:** Common Stock

### Item 2: Ongoing Reporting Requirements

**Is the issuer relying on the relief provided by Rule 257(d) for this filing?** Yes