# EDGAR Filing Document

**Accession Number:** 0002063863
**File Stem:** 0001104659-26-061490
**Filing Date:** 2026-5
**Character Count:** 229876
**Document Hash:** 4efb1c74e9415beff5e9a0f845305dda
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001104659-26-061490.hdr.sgml**: 20260515

**ACCESSION NUMBER**: 0001104659-26-061490

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 87

**CONFORMED PERIOD OF REPORT**: 20260331

**FILED AS OF DATE**: 20260515

**DATE AS OF CHANGE**: 20260514

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Elauwit Connection, Inc.
- **CENTRAL INDEX KEY:** 0002063863
- **STANDARD INDUSTRIAL CLASSIFICATION:** COMMUNICATION SERVICES, NEC [4899]
- **ORGANIZATION NAME:** 06 Technology
- **EIN:** 993101171
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-42935
- **FILM NUMBER:** 26981570

**BUSINESS ADDRESS:**
- **STREET 1:** 1700 ALTA VISTA DRIVE
- **STREET 2:** SUITE 130
- **CITY:** COLUMBIA
- **STATE:** SC
- **ZIP:** 29223
- **BUSINESS PHONE:** 704-558-3099

**MAIL ADDRESS:**
- **STREET 1:** 1700 ALTA VISTA DRIVE
- **STREET 2:** SUITE 130
- **CITY:** COLUMBIA
- **STATE:** SC
- **ZIP:** 29223

?xml version='1.0' encoding='ASCII'? Elauwit Connection, Inc._March 31, 2026

[**Table of Contents**](#TOC)

------

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**FORM 10-Q**

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

**For the quarterly period ended March 31, 2026**

**OR**

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the Transition Period from &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**

**Commission file number: 001-42935**

## Elauwit Connection, Inc.
(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Delaware** | **99-3101171** |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |

---

**1700 Alta Vista Drive, Suite 130**

**Columbia, SC 29223**

(Address of principal executive offices) (Zip Code)

**(704) 558-3099**

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbols** | **Name of each exchange on which registered** |
| **Common Stock, par value $0.0001 per share** | **ELWT** | **The Nasdaq Stock Market LLC** |

---

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

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

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

---

| | | | |
|:---|:---|:---|:---|
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer | ☑ | Smaller reporting company | ☑ |
|  |  | Emerging growth company | ☑ |

---

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

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

As of May 8, 2026, 6,619,796 shares of the registrant's common stock, par value $0.0001 per share, were outstanding.

------

[**Table of Contents**](#TOC)

**Table of Contents**

---

| | | |
|:---|:---|:---|
|  |  | **PAGE** |
| **PART I - FINANCIAL INFORMATION** | **PART I - FINANCIAL INFORMATION** |  |
| **ITEM 1.** | **FINANCIAL STATEMENTS**  |  |
|  | [Unaudited Condensed Balance Sheets as of March 31, 2026 and December 31, 2025](#BalanceSheets_617031) | 3 |
|  | [Unaudited Condensed Statements of Operations for the Three Months Ended March 31, 2026 and 2025](#StatementsofOperations_449607) | 4 |
|  | [Unaudited Condensed Statements of Stockholders' Equity (Deficit) for the Three Months Ended March 31, 2026 and 2025](#StockholdersEquity_568166) | 5 |
|  | [Unaudited Condensed Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025](#CashFlows_783870) | 6 |
|  | [Notes to Unaudited Condensed Financial Statements](#NotestoUnaudited_785376) | 7 |
| [**ITEM 2.**](#ITEM2MANAGEMENTSDISCUSSIONANDANALYSISOFF) | [**MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**](#ITEM2MANAGEMENTSDISCUSSIONANDANALYSISOFF) | 28 |
| [**ITEM 3.**](#ITEM3QUANTITATIVEANDQUALITATIVEDISCLOSUR) | [**QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**](#ITEM3QUANTITATIVEANDQUALITATIVEDISCLOSUR) | 36 |
| [**ITEM 4.**](#ITEM4CONTROLSANDPROCEDURES_69709) | [**CONTROLS AND PROCEDURES**](#ITEM4CONTROLSANDPROCEDURES_69709) | 36 |
| [**PART II - OTHER INFORMATION**](#PARTIIOTHERINFORMATION_563501) | [**PART II - OTHER INFORMATION**](#PARTIIOTHERINFORMATION_563501) |  |
| [**ITEM 1.**](#ITEM1LEGALPROCEEDINGS_307895) | [**LEGAL PROCEEDINGS**](#ITEM1LEGALPROCEEDINGS_307895) | 37 |
| [**ITEM 5.**](#ITEM5OTHERINFORMATION_773093) | [**OTHER INFORMATION**](#ITEM5OTHERINFORMATION_773093) | 37 |
| [**ITEM 6.**](#ITEM6EXHIBITS_653913) | [**EXHIBITS**](#ITEM6EXHIBITS_653913) | 38 |
| [**SIGNATURES**](#SIGNATURES_823838) | [**SIGNATURES**](#SIGNATURES_823838) | 39 |

---

[**Table of Contents**](#TOC)

**ELAUWIT CONNECTION, INC.**

**Unaudited Condensed Balance Sheets** 

(in thousands, except share and par value data)

---

| | | |
|:---|:---|:---|
|  | **March 31, 2026** | **December 31, 2025** |
| **ASSETS** |  |  |
| **Current Assets** |  |  |
| &nbsp;&nbsp;Cash and cash equivalents | $3534 | $6154 |
| &nbsp;&nbsp;Accounts receivable, net of allowance for credit losses of $429 and $303, respectively | 3190 | 2407 |
| &nbsp;&nbsp;Inventories | 1028 | 1004 |
| &nbsp;&nbsp;Network financing receivable, current | 213 | 213 |
| &nbsp;&nbsp;Prepaid expenses and other current assets | 443 | 550 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 8408 | 10328 |
| Network financing receivable | 1025 | 1078 |
| Lease right-of-use assets, net | 14 | 28 |
| Net investment in lease | 446 | 483 |
| Other non-current assets | 26 | 26 |
| **TOTAL ASSETS** | $9919 | $11943 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| **Current Liabilities** |  |  |
| &nbsp;&nbsp;Deferred revenue | $3811 | $2886 |
| &nbsp;&nbsp;Accounts payable | 1094 | 1813 |
| &nbsp;&nbsp;Accrued expenses and other current liabilities | 563 | 495 |
| &nbsp;&nbsp;Operating lease liabilities, current | 14 | 29 |
| &nbsp;&nbsp;Related party debt, current | 778 | 804 |
| &nbsp;&nbsp;Note payable, current | 199 | 196 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 6459 | 6223 |
| Related party debt, net of current | 446 | 506 |
| Note payable, net of current | 442 | 490 |
| Deferred revenue, net of current | 293 | 308 |
| TOTAL LIABILITIES | 7640 | 7527 |
| **Commitments and contingencies (see Note 13)** |  |  |
| **STOCKHOLDERS' EQUITY** |  |  |
| &nbsp;&nbsp;Preferred stock, $0.0001 par value, 100,000 authorized as of March 31, 2026 and December 31, 2025; 0 outstanding as of March 31, 2026 and December 31, 2025 |  |  |
| &nbsp;&nbsp;Common stock, $0.0001 par value, 14,900,000 shares authorized; 6,619,796 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively  |  |  |
| &nbsp;&nbsp;Additional Paid-in Capital | 19034 | 19009 |
| &nbsp;&nbsp;Accumulated deficit | (16755) | (14593) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 2279 | 4416 |
| **TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY** | $9919 | $11943 |

---

*See accompanying notes to unaudited condensed financial statements.*

[**Table of Contents**](#TOC)

**ELAUWIT CONNECTION, INC.**

**Unaudited Condensed Statements of Operations** 

**(in thousands, except share and per value data)**

---

| | | |
|:---|:---|:---|
|  | **For the three months ended March 31,** | **For the three months ended March 31,** |
|  | **2026** | **2025** |
| **Revenues** |  |  |
| &nbsp;&nbsp;Revenues | $4430 | $5446 |
| **Cost of revenues** |  |  |
| &nbsp;&nbsp;Cost of revenues | 3603 | 4187 |
| **Gross profit** | 827 | 1259 |
| **Operating expenses** |  |  |
| &nbsp;&nbsp;General and administrative | 2884 | 1606 |
| &nbsp;&nbsp;Sales and marketing | 143 | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 3027 | 1628 |
| **Loss from operations** | (2200) | (369) |
| **Other expense, net** |  |  |
| &nbsp;&nbsp;Interest income (expense), net | 38 | (73) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total other income (expense), net | 38 | (73) |
| Loss from operations before income taxes | (2162) | (442) |
| &nbsp;&nbsp;**Income tax expense** |  |  |
| Net loss | (2162) | (442) |
| **Net loss per share, basic and diluted** | $(0.33) | $(0.09) |
| Weighted average common shares used in computing net loss per share, basic and diluted | $6619796 | $5000000 |

---

*See accompanying notes to unaudited condensed financial statements.*

[**Table of Contents**](#TOC)

**ELAUWIT CONNECTION, INC.**

**Unaudited Condensed Statements of Stockholders' Equity (Deficit)**

**(in thousands, except share data)**

**For the three months ended March 31, 2026 and 2025**

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | **Common Stock** | **Common Stock** | **Common Stock** | **Common Stock** | **Stockholders' Equity** | **Stockholders' Equity** | **Stockholders' Equity** | **Stockholders' Equity** |
|  |  |  | **Class A** | **Class A** | **Class B** | **Class B** | | | | |
|  | **Common Stock** | **Common Stock** | **Common Stock** | **Common Stock** | **Common Stock** | **Common Stock** | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | <br>**Additional**<br>**Paid-In-**<br>**Capital** | <br>**Accumulated**<br>**Deficit** | <br>**Stock** <br>**Subscription**<br>**Receivable** | **Total** <br>**Stockholders'**<br>**Equity** <br>**(Deficit)** |
| **Balance at December 31, 2025** | **6619796** | $**—** | **—** | $**—** | **—** | $**—** | $**19009** | $**(14593)** | $**—** | $**4416** |
| Stock based compensation |  |  |  |  |  |  | 25 |  |  | 25 |
| Net loss | **—** | **—** | **—** |  | **—** | **—** | **—** | (2162) | **—** | (2162) |
| **Balance at March 31, 2026** | **6619796** | $**—** | **—** | $**—** | **—** | $**—** | $**19034** | $**(16755)** | $**—** | $**2279** |

---

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | **Common Stock** | **Common Stock** | **Common Stock** | **Common Stock** | **Stockholders' Equity (Deficit)** | **Stockholders' Equity (Deficit)** | **Stockholders' Equity (Deficit)** | **Stockholders' Equity (Deficit)** |
|  |  |  | **Class A** | **Class A** | **Class B** | **Class B** | | | | |
|  | **Common Stock** | **Common Stock** | **Common Stock** | **Common Stock** | **Common Stock** | **Common Stock** | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | <br>**Additional**<br>**Paid-In-**<br>**Capital** | <br>**Accumulated**<br>**Deficit** | <br>**Stock**<br>**Subscription**<br>**Receivable** | **Total**<br>**Stockholders'**<br>**Equity**<br>**(Deficit)** |
| **Balance at December 31, 2024** | **—** | $**—** | **2497950** | $**—** | **2502050** | $**—** | $**5859** | $**(10365)** | $**(30)** | $**(4536)** |
| Repayment of stock subscription receivable |  |  |  |  |  |  |  |  | 30 | 30 |
| Net loss |  |  |  |  |  |  |  | (442) |  | (442) |
| **Balance at March 31, 2025** | **—** | $**—** | **2497950** | $**—** | **2502050** | $**—** | $**5859** | $**(10807)** | $**—** | $**(4948)** |

---

*See accompanying notes to unaudited condensed financial statements.*

[**Table of Contents**](#TOC)

**ELAUWIT CONNECTION, INC.**

**Unaudited Condensed Statements of Cash Flows** 

**(in thousands)**

---

| | | |
|:---|:---|:---|
|  | **For the three months ended March 31,** | **For the three months ended March 31,** |
|  | **2026** | **2025** |
| **CASH FLOWS FROM OPERATING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;Net loss | $(2162) | $(442) |
| &nbsp;&nbsp;Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock based compensation expense | 25 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Provision for credit losses | 126 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Right of use asset amortization expense | 14 | 12 |
| &nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (909) | (1520) |
| &nbsp;&nbsp;&nbsp;&nbsp;Network financing receivable | 53 | (389) |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventories | (23) | 592 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | 107 | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (719) | 628 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other current liabilities | 66 | (59) |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue | 910 | (317) |
| &nbsp;&nbsp;&nbsp;&nbsp;Related party payables |  | (56) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net investment in lease | 37 | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;Lease right-of-use lease liabilities payments | (14) | (11) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities | (2489) | (1536) |
| **CASH FLOWS FROM FINANCING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;Proceeds from related party debt |  | 1000 |
| &nbsp;&nbsp;Proceeds from SAFE issuance |  | 1000 |
| &nbsp;&nbsp;Repayment of related party debt | (86) | (111) |
| &nbsp;&nbsp;Repayment of notes payable | (45) | (58) |
| &nbsp;&nbsp;Proceeds from payment of stock subscription receivable |  | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in) financing activities | (131) | 1861 |
| **NET CHANGE IN CASH** | (2620) | 325 |
| **CASH, beginning of period** | 6154 | 287 |
| **CASH, end of period** | $3534 | $612 |
| **SUPPLEMENTAL CASH FLOW INFORMATION:** |  |  |
| &nbsp;&nbsp;Cash payments for interest | 54 | 62 |
| SUPPLEMENTAL NONCASH DISCLOSURE INVESTING AND FINANCING: |  |  |
| &nbsp;&nbsp;Lease liabilities arising from obtaining right-of-use asset | $— | $25 |

---

*See accompanying notes to unaudited condensed financial statements.*

[**Table of Contents**](#TOC)

#### ELAUWIT CONNECTION, INC.

#### Notes to Unaudited Condensed Financial Statements

#### Note 1. Organization and Nature of Operations

#### The Company
Elauwit Connection, Inc. ("Elauwit" or the "Company") is a technology services company that specializes in providing advanced connectivity solutions for buildings by enhancing internet and network infrastructure for property owners and managers. Elauwit provides these solutions by designing and implementing high-speed internet, video, and other technology solutions to ensure seamless connectivity for residents and tenants, with the goal of putting more control in the hands of property owners and allowing them to offer a superior internet experience as a key amenity.

On September 13, 2024 (the "Closing Date"), Legacy Elauwit Connection, Inc., a Delaware corporation, incorporated in December 2019 ("Legacy Elauwit") and DeltaMax, Inc. ("DeltaMax"), a privately-held Delaware corporation, consummated a merger transaction (the "Merger"), with DeltaMax being the legal successor or surviving corporation. As part of the Merger, DeltaMax changed its name to Elauwit Connection, Inc. and issued an aggregate of 5,000,000 Merger Shares (2,497,950 Class A and 2,502,050 Class B) to the owners of Legacy Elauwit based on a 4.11795 share exchange ratio. Prior to the Merger, DeltaMax was a non-operating shell company.

The Merger was accounted for as a reverse recapitalization, with Legacy Elauwit determined to be the accounting acquirer. Accordingly, the unaudited condensed financial statements of the Company represent a continuation of the financial statements of Legacy Elauwit, with the exception of legal capital. Periods prior to the Merger have common stock restated at the 4.11795 share exchange ratio. The accumulated deficit of Legacy Elauwit has been carried forward after the Closing. No goodwill or other intangible assets were recorded as the transaction did not constitute the acquisition of a business.

*Initial Public Offering*

On November 4, 2025, the Company entered into an Underwriting Agreement (the "Underwriting Agreement") with Craig-Hallum Capital Group LLC, as representative of the underwriters (the "Representative"), in connection with an underwritten public offering (the "Offering") of 1,667,000 shares of common stock at a public offering price of $9.00 per share. The underwriters agreed to purchase the shares at a 7.0% discount to the public offering price, and the Company granted the Representative a 45-day option to purchase up to an additional 250,050 shares of common stock to cover over-allotments, if any. The Offering closed on November 6, 2025, and on November 24, 2025 the Company closed on the partial exercise of the Representative's over-allotment option for an additional 68,989 shares of common stock. The remaining portion of the over-allotment option to purchase 181,061 shares of common stock expired unexercised upon the expiration of the 45-day option period. Gross proceeds from the Offering and the partial exercise of the over-allotment option were approximately $15.0 million and $0.6 million, respectively. The Company incurred additional offering expenses, inclusive of the underwriter discounts, of approximately $2.0 million, which were recorded as deferred offering costs and reclassified to additional paid-in capital upon completion of the Offering.

Pursuant to the Underwriting Agreement, the Company agreed to issue to the Representative, as a portion of the underwriting compensation payable to the Representative, warrants to purchase 116,690 shares of common stock (representing 7% of the number of shares of common stock sold in the Offering) (the "Representative's Warrants"). In connection with the closing of the partial over-allotment option exercise on November 24, 2025, the Company also issued Representative's Warrants to purchase up to 4,830 shares of common stock to the Representative. The Representative's Warrants are exercisable at $10.35 per share, are initially exercisable on May 2, 2026 and expire on November 2, 2030.

*Put Right Conversion*

Prior to the Offering, we entered into a Put-Call Agreement, as amended (the "Put-Call Agreement"), with Baron Hunter Group, LLC ("Baron Hunter") and Steele Creek Partners LLC ("Steele Creek"), which governs certain rights between the Company and related parties regarding the purchase and sale of common stock. Baron Hunter, of which Daniel McDonough, Jr., our Executive Chairman is the managing member, and Steele Creek, of which Barry Rubens, our Chief Executive Officer is the managing member, were granted the right to sell to Elauwit (the "Put Option") up to $1.0 million in shares of common stock at a discount of 10% below the offering price. On November 13, 2025, both Baron Hunter and Steele Creek exercised their respective Put Options. On November 14, 2025, the Company repurchased 123,456 shares of common stock from each of Baron Hunter and Steele Creek at a price of $8.10 per share, resulting in total payments of $1.0 million to each of Baron Hunter and Steele Creek.

[**Table of Contents**](#TOC)

*Related Party Debt Payoff*

On November 7, 2025, the Company repaid all outstanding principal and accrued interest related to the Endurance Loan (as defined below), the Endurance Business Loan (as defined below), the Endurance Promissory Note (as defined below), and the Second Endurance Promissory Note (as defined below), thereby satisfying these obligations in full. See Note 6 for additional information regarding these related party financing arrangements.

*Related Party Payables Payoff*

On November 7, 2025, the Company repaid the outstanding principal and interest on the Management Agreement (as defined below) and the Deferred Compensation Agreement (as defined below), thereby satisfying these obligations in their entirety. See Note 8 for additional information regarding these related party payables.

#### Going Concern
As of March 31, 2026, the Company had cash of approximately $3.5 million and net working capital of approximately $1.9 million. The Company has incurred recurring net losses from operations and negative cash flows from operating activities since inception, with an accumulated deficit of approximately $16.8 million as of March 31, 2026. During the three months ended March 31, 2026 the Company had used approximately $2.5 million in cash for operating activities.

These historical conditions raised substantial doubt about the Company's ability to continue as a going concern. On November 6, 2025, the Company completed the Offering, raising gross proceeds of approximately $15.0 million. As of March 31, 2026, the Company had no required debt repayments other than scheduled monthly principal and interest payments on its outstanding promissory note with Motherlode (as defined below) and Network Service Agreements (see Notes 6 and 7).

On May 14, 2026, the Company's entered into a new $2.0 million business loan agreement (the "May 2026 Term Loan") with Endurance Opportunities (as defined below), an existing related-party lender. In connection with the May 2026 Term Loan, the Company issued a commercial promissory note in favor of Endurance Opportunities with a principal amount of $500 thousand (the "May 2026 Note") and agreed to issue three additional commercial promissory notes in favor of Endurance Opportunities, each with a principal amount of $500 thousand. The May 2026 Note has a maturity date of 36 months and bears interest at 15.5% per annum on the outstanding principal balance. Monthly payments of interest are required under the May 2026 Note with the outstanding principal amount of the May 2026 Note due on the maturity date. Each subsequent commercial promissory note issued in accordance with the May 2026 Term Loan will have the same terms and conditions as the May 2026 Note. The Company intends to use the proceeds for general working capital and continued network deployment activities. See Note 16 — Subsequent Events.

Management expects operating losses and negative cash flows from operations to continue for the foreseeable future as the Company invests in its commercial capabilities; however, management expects such losses and negative cash flows to decrease over time as the Company scales its operations and grows its revenue base. In evaluating the Company's ability to continue as a going concern for a period of one year from the date these financial statements are issued, management considered the Company's current liquidity position, including net proceeds from the Offering, the planned $2.0 million inflow from the May 2026 Term Loan, forecasted cash flows reflecting the anticipated improvement in operating results, and the ability, if necessary, to reduce discretionary spending and other operating costs to preserve liquidity. Based on this assessment, management has concluded that the Company's current liquidity position and expected cash flows are sufficient to fund operations for at least the next twelve months, and that substantial doubt about the Company's ability to continue as a going concern does not exist as of the date these financial statements are issued.

#### Note 2. Summary of Significant Accounting Policies

#### Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). Certain footnotes and other financial information normally required by U.S. GAAP have been condensed or omitted in accordance with instructions for interim financial information and Article 8 of Regulation S-X. In the opinion of management, such statements include all adjustments which are considered necessary for a fair presentation of the unaudited condensed financial statements of the Company as of March 31, 2026 and 2025. The operating results herein are not necessarily an indication of the results that may be expected for the year, or any future periods. The unaudited condensed financial statements should be read in conjunction with the Company's audited financial statements and notes thereto for the years ended

[**Table of Contents**](#TOC)

December 31, 2025 and 2024, as included in the Form 10-K dated March 31, 2026 and filed with the Securities and Exchange Commission ("SEC").

Certain prior period amounts have been reclassified to conform to the current period presentation. Specifically, the Motherlode Promissory Note, which was previously included within Related Party Debt, has been reclassified and presented separately as Notes Payable to reflect that Motherlode ceased to be a related party of the Company in April 2024 (see Note 7 — Notes Payable). These reclassifications did not affect previously reported total liabilities, total stockholders' equity, net loss, or cash flows for any period presented.

#### Use of Estimates
The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates made by management include assumptions used in estimates of future credit losses under the current expected credit loss impairment model, valuation of SAFE liabilities, revenue recognition, including cost estimates and percentage complete, provisions for income taxes and related valuation allowances and tax uncertainties. On an ongoing basis, management reviews these estimates and assumptions based on currently available information. Actual results could differ from these estimates.

#### Concentrations of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of demand deposits with financial institutions and accounts receivable. The Company maintains cash balances with financial institutions, which at times, are in excess of amounts insured by the Federal Deposit Insurance Corporation. To date, the Company has not experienced any collection loss with these institutions.

Accounts receivable are subject to the risk that the Company's customers will not pay the amounts due. The Company has established credit and collection policies to mitigate that risk. As of March 31, 2026, the Company had four customers that accounted for approximately 61% of the Company's accounts receivable balance, comprising 22%, 16%, 12%, and 11%, respectively. During the three months ended March 31, 2026, the Company had four customers that accounted for approximately 60% of the Company's total revenues, comprising 19%, 17%, 14% and 10%, respectively.

As of December 31, 2025, the Company had four customers that accounted for approximately 59% of the Company's accounts receivable balance, comprising 29%, 17%, 8% and 5%. During the three months ended March 31, 2025, the Company had two customers that accounted for approximately 55% of the Company's total revenues, comprising 43% and 12%.

#### Segment Reporting
The Company determines its reportable segments in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 280, *Segment Reporting* ("ASC 280"). The Company evaluates a reporting segment by first identifying its operating segments under ASC 280. The Company then evaluates each operating segment to determine if it includes one or more components that constitute a business. If there are components within an operating segment that meet the definition of a business, the Company evaluates those components to determine if they must be aggregated into one or more reportable segments. If applicable, when determining if it is appropriate to aggregate different operating segments, the Company determines if the segments are economically similar and, if so, the operating segments are aggregated.

The Company has one operating segment and one reportable segment. The Company identifies the Chief Operating Decision Maker ("CODM") to be a group consisting of the Chief Executive Officer ("CEO") and the Chief Financial Officer ("CFO"). The Company's principal operations are in the United States. The CODM utilizes and regularly reviews gross profit and loss from operations as measures of segment profit or loss. These measures enable the CODM to access the overall level of available resources and determine how best to deploy resources.

[**Table of Contents**](#TOC)

A reconciliation of total segment revenues to total revenues, which is the same as revenues as presented on the accompanying unaudited condensed statements of operations, and of total segment gross profit and segment operating income (loss) which aggregates to total operating income (loss) from operations is as follows (in thousands):

---

| | | |
|:---|:---|:---|
|  | **For the three months ended March 31,**  | **For the three months ended March 31,**  |
|  | **2026** | **2025** |
| Revenues | $4430 | $5446 |
| Less: |  |  |
| Cost of revenues | 3603 | 4187 |
| Segment gross profit | 827 | 1259 |
| Less(1): |  |  |
| Segment compensation expenses (2) | 1547 | 752 |
| Segment travel expenses (3) | 163 | 56 |
| Other segment expenses (4) | 1317 | 820 |
| Segment operating loss | $(2200) | $(369) |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Compensation related expenses primarily include salaries and related payroll tax expenses.

&nbsp;&nbsp;&nbsp;&nbsp;(3) Travel related expenses primarily include travel expenses.

&nbsp;&nbsp;&nbsp;&nbsp;(4) Other segment expenses for each reportable segment includes all other operating expenses such as management fees, professional fees, insurance, rent and other.

#### Cash and Cash Equivalents
The Company considers all short-term, highly liquid investments with original maturities of 90 days or less to be cash equivalents. As of March 31, 2026, and December 31, 2025 cash equivalents consisted of money market funds. Money market funds are invested primarily in U.S. government securities and are recorded at fair value, which approximates cost due to their highly liquid nature and short maturities.

The Company maintained $36 thousand of deposits in financial institutions in excess of federally insured limits of $250 thousand at March 31, 2026. The Company has not experienced any losses in such accounts and management believes it is not exposed to significant credit risk on its cash deposits.

#### Accounts Receivable, Unbilled Receivables, Network Financing Receivables and Allowance for Credit Losses
Trade accounts receivable are recorded at invoiced amounts, net of allowance for expected credit losses, if applicable, and are unsecured and do not bear interest. In addition, unbilled receivables and network financing receivables are derived from the allocation of contract consideration for services, such as network design and installation, recognized over time, which payment of such consideration received over the contract term, generally between one and several years. Unbilled and network financing receivables are presented net of allowances for credit losses. Unbilled receivables are generally billed within a few months subsequent to the balance sheet date. Network financing receivables are billed monthly in accordance with contract terms, generally over a period of five to seven years, concurrent with internet network services.

Network financing receivables represent amounts due from customers for network infrastructure designed, installed, and managed by the Company pursuant to network service agreements, billed monthly in accordance with contract terms generally over a period of five to seven years, concurrent with the delivery of internet network services. The majority of the Company's network financing receivables are financed through participation and agency agreements with Endurance Opportunities (as defined below), under which the Company sells an undivided participation interest in the underlying network service agreement (see Note 6 — Related Party Debt). Because the Company retains a repurchase obligation under these arrangements, the network financing receivables remain on the Company's balance sheet and the related financing is recorded as debt. The Company also has a limited number of self-financed network financing receivables for which no third-party financing has been obtained. The Company retains the credit risk associated with customer nonpayment on all network financing receivables, whether financed through Endurance Opportunities or self-financed.

[**Table of Contents**](#TOC)

Under the current expected credit losses ("CECL") impairment model, the Company develops and documents its allowance for credit losses on trade accounts receivable, unbilled receivables, and network financing receivables. The Company applies different estimation methodologies depending on the nature of the asset class. For trade accounts receivable, the Company uses an aging schedule method, under which reserve percentages of 50%, 75%, and 100% are applied to invoices aged 91–120 days, 121–180 days, and over 180 days past due, respectively. Invoices aged 90 days or fewer are reserved at a de minimis rate supported by historical collection experience. For unbilled receivables and network financing receivables, the Company uses a historical loss rate method. No write-offs or credit losses have been recorded on unbilled receivables or network financing receivables since inception, resulting in a historical loss rate of zero; accordingly, no allowance has been recorded against these balances as of March 31, 2026 and December 31, 2025. The Company also considers reasonable and supportable current information in determining its estimated loss rates, such as external forecasts, macroeconomic trends or other factors including customers' credit risk and historical loss experience. At March 31, 2026 and December 31, 2025, no macroeconomic factors were noted that would impact the Company's expected credit losses.

Effective for the year ended December 31, 2025, the Company changed its estimation methodology for trade accounts receivable from a historical loss rate method to an aging schedule method, accounted for prospectively as a change in accounting estimate. The change reflects a refinement in the Company's measurement approach driven by the growth of the accounts receivable portfolio and the availability of more granular invoice-level aging data, which now support a more precise estimate of expected credit losses. No prior periods have been restated.

The adequacy of the allowance is evaluated on a regular basis. Account balances are written off after all means of collection are exhausted and the balance is deemed uncollectible. Subsequent recoveries are credited to the allowance. Changes in the allowance are recorded as adjustments to provision for credit losses in the period incurred. At March 31, 2026 and December 31, 2025 the Company recorded an allowance for expected credit losses of approximately $0.4 million and $0.3 million, respectively, related entirely to trade accounts receivable.

#### Inventories
The Company's inventories are stated at the lower of cost or net realizable value, using specific identification method. The Company's inventories consists completely of items procured but not yet assigned or shipped to a specific job site and finished goods inventory. Indirect costs relating to long-term contracts, which include expenses such as general and administrative, are charged to expense as incurred. During the three months ended March 31, 2026 and 2025 charges to inventory were insignificant.

#### Deferred Financing or Offering Costs
The Company allocates offering costs to the different components of the capital raise on a pro rata basis. Offering costs allocated to common stock are charged directly to additional paid-in capital.

The Company accounts for deferred offering costs in accordance with FASB ASC Topic 340, Other Assets and Deferred Costs, and Staff Accounting Bulletin Topic 5A. Deferred offering costs consist primarily of legal, accounting, consulting, and underwriting fees directly attributable to the Offering.

Upon the closing of the Offering on November 6, 2025, the Company reclassified approximately $2.0 million of deferred offering costs to additional paid-in capital as a direct reduction of offering proceeds.

#### Distinguishing Liabilities from Equity
The Company relies on the guidance provided by FASB ASC Topic 480, *Distinguishing Liabilities from Equity* ("ASC 480"), to classify certain redeemable and/or convertible instruments. The Company first determines whether a financial instrument should be classified as a liability. The Company will determine the liability classification if the financial instrument is mandatorily redeemable, or if the financial instrument, other than outstanding shares, embodies a conditional obligation that the Company must or may settle by issuing a variable number of its equity shares.

Once the Company determines that a financial instrument should not be classified as a liability, the Company determines whether the financial instrument should be presented between the liability section and the equity section of the unaudited condensed balance sheets. The Company will determine temporary equity classification if the redemption of the financial instrument is outside the control of the Company (i.e. at the option of the holder). Otherwise, the Company accounts for the financial instrument as permanent equity.

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#### Revenue Recognition
***Overview***

The Company generates revenue from the following sources: (1) network design and installation and (2) internet network services.

In accordance with FASB ASC 606 "Revenue Recognition" ("ASC 606"), the Company recognizes revenue from contracts with customers using a five-step model, which is described below:

● identify the customer contract;

● identify performance obligations that are distinct;

● determine the transaction price;

● allocate the transaction price to the distinct performance obligations; and

● recognize revenue as the performance obligations are satisfied.

***Identify the customer contract***

A customer contract is generally identified when there is approval and commitment from both the Company and its customer, the rights have been identified, payment terms are identified, the contract has commercial substance and collectability is probable. Specifically, the Company obtains written/electronic signatures on contracts with customers.

***Identify performance obligations that are distinct***

A performance obligation is a promise by the Company to provide a distinct good or service or a series of distinct goods or services. A good or service that is promised to a customer is distinct if the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer, and a company's promise to transfer the good or service to the customer is separately identifiable from other promises in the contract. The Company's network design and installation revenue stream requires significant services to integrate complex activities and equipment into a single deliverable, and is therefore generally accounted for as one distinct performance obligation. The Company's internet network services revenue stream is composed of two distinct and separately identifiable performance obligations: (1) wired/wireless internet services and (2) hardware and internet services maintenance. The hardware and internet services maintenance performance obligation is a stand-ready obligation.

***Determine the transaction price***

The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The transaction price for the network design and installation is fixed based on the amount stated in the contract. For contracts in which the Company finances the construction of the network, any interest collected by the Company is excluded from the transaction price. The transaction price for the bulk internet services is determined by the monthly per unit price times the number of units stated in the contract.

The Company evaluates its contracts with customers for the presence of significant financing components. If a significant financing component is identified in a contract and provides a financing benefit to the customer, the transaction price for the contract is adjusted to account for the financing portion of the arrangement, which is recognized as interest income over the financing term using the effective interest method. In determining the appropriate interest rates for significant financing components, the Company evaluates the credit profile of the customer and prevailing market interest rates and selects an interest rate in which it believes would be charged to the customer in a separate financing arrangement over a similar financing term.

[**Table of Contents**](#TOC)

***Allocate the transaction price to distinct performance obligations***

When allocating the contract's transaction price, the Company considers each distinct performance obligation. As the contracts contain multiple performance obligations, and the Company does not have standalone observable prices, the Company notes the contract's transaction price of each performance obligation based on the standalone selling price, which is determined using an expected cost plus a margin approach.

***Recognize revenue as the performance obligations are satisfied***

Revenue related to network design and installation revenue stream is recognized over time as the Company's performance creates or enhances an asset that the customer controls as the asset is created or enhanced date. The best measure of progress toward completion for this performance obligation is costs incurred to date, as the Company has reliable information about the costs it expects to incur in total and the costs actually incurred and because it best depicts the transfer of control to the customer which occurs as it incurs costs on the contracts. For over time contracts using a cost-to-cost measure of progress, the Company has an estimate at completion ("EAC") process in which the Company reviews the progress and execution of its performance obligations. This EAC process requires management's judgment relative to assessing risks, estimating contract revenue and costs, and making assumptions for schedule and technical issues. Accordingly, the Company will use an input method of costs incurred to date relative to the estimated total costs to satisfy the performance obligation to record revenue.

Revenue related to wired/wireless internet services is recognized over time as the customer simultaneously receives and consumes the benefits provided by the Company's performance as the Company performs. The best measure of progress toward completion for this performance obligation is the passage of time as the Company's efforts are used evenly throughout the performance of the wired and wireless internet services performance obligation. Accordingly, the Company uses an input method of time (in days) elapsed to record revenue as the performance obligation is satisfied evenly over time as the same internet services are provided daily. Revenue will be recorded ratably over the contract term.

Revenue related to hardware and internet services maintenance is recognized over time as the customer simultaneously receives and consumes the benefits provided by the Company's performance as the Company performs. This performance obligation is a stand-ready obligation in which the Company expects the customer to receive and consume the benefits of the hardware and internet services maintenance throughout the contract period. Accordingly, the Company uses an input method of time (in days) elapsed to record revenue. The Company notes that as this is a stand-ready obligation, the performance obligation is satisfied evenly over a period of time, and revenue will be recorded ratably over the contract term.

***Costs to obtain contracts***

The Company incurs incremental costs to obtain contracts with their customers for certain contracts, specifically sales commissions. These costs are initially capitalized and amortized over the contract term. As of March 31, 2026 and 2025, the Company had approximately $220 thousand and $173 thousand, respectively, of costs to obtain contracts capitalized which are presented within prepaid expenses and other current assets. The Company recognized approximately $3 thousand and $0 of amortization of costs to obtain contracts for the three months ended March 31, 2026 and 2025, respectively, which is included in sales and marketing expense in the accompanying unaudited condensed statements of operations.

***Significant Judgments***

The Company enters into contracts that may include various combinations of equipment, services and network installation. Contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Once the Company determines the performance obligations, it determines the transaction price, which includes estimating the amount of variable consideration to be included in the transaction price, if any. The Company then allocates the transaction price to each performance obligation in the contract based on the stand alone selling price. The corresponding revenue is recognized as the related performance obligations are satisfied. As it relates to Network design and installation revenue, each reporting period, the Company estimates the amount of costs incurred to date as a percentage of total estimated costs to determine the amount of revenue to recognize.

[**Table of Contents**](#TOC)

***Deferred Revenue and Unbilled Receivables***

The timing of revenue recognition, billings and collections results in receivables, unbilled receivables and contract liabilities on its unaudited condensed balance sheets. Under typical payment terms for its contracts accounted for over time, amounts are billed as work progresses in accordance with agreed-upon contractual terms. For certain contracts, billings occur subsequent to revenue recognition, resulting in unbilled receivables. Under ASC 606, unbilled receivables constitute contract assets. For certain contracts, payment terms typically require advanced payments and deposits. Under ASC 606, payments received from customers in excess of revenue recognized to-date results in a contract liability.

#### Shipping and Handling Costs
Shipping and handling costs charged to customers are included in revenue, while all other shipping and handling costs are included in cost of revenues in the accompanying unaudited condensed statements of operations. Shipping and handling costs were not material during the three months ended March 31, 2026 and 2025.

#### Advertising and Marketing
Advertising and marketing costs are expensed as incurred and included in sales and marketing expense. Advertising and marketing costs were $143 thousand and $22 thousand for the three months ended March 31, 2026 and 2025, respectively.

#### Leases
Operating lease assets are included within lease right-of-use assets, net and operating lease liabilities are included in operating lease liabilities, current and operating lease liabilities, net of current on the unaudited condensed balance sheets as of March 31, 2026 and December 31, 2025. The Company has elected not to present short-term leases as these leases have a lease term of 12 months or less at lease inception and do not contain purchase options or renewal terms that the Company is reasonably certain to exercise. Lease payments for short-term leases are recognized on a straight-line basis over the term of the lease. All other lease right-of-use assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. Because the Company's lease does not provide an implicit rate of return, the Company used an incremental borrowing rate based on the information available at adoption date in determining the present value of lease payments.

The Company assesses whether an arrangement is a lease or contains a lease at inception. For arrangements considered leases or that contain a lease that is accounted for separately, the Company determines the classification and initial measurement of the lease right-of-use assets and operating lease liabilities at the lease commencement date, which is the date that the underlying asset becomes available for use. The Company has elected to account for non-lease components associated with its leases and lease components as a single lease component.

The Company recognizes a lease right-of-use asset, which represents the Company's right to use the underlying asset for the lease term, and an operating lease liability, which represents the present value of the Company's obligation to make payments arising over the lease term. The operating lease liability is based on the present value of its unpaid minimum lease payments over the lease term, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the incremental borrowing rate which is the rate the Company pays to borrow on a collateralized basis.

If a lease is modified, the modified contract is evaluated to determine whether it is or contains a lease. If a lease continues to exist, the lease modification is determined to be a separate contract when the modification grants the lessee an additional right-of-use that is not included in the original lease and the lease payments increase commensurate with the standalone price for the additional right-of-use. A lease modification that results in a separate contract will be accounted for in the same manner as a new lease. For a modification that is not a separate contract, the Company reassess the lease classification using the modified terms and conditions and the facts and circumstances as of the effective date of the modification and recognize the amount of the remeasurement of the operating lease liability for the modified lease as an adjustment to the corresponding lease right-of-use asset.

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#### Share-Based Compensation
The Company accounts for share-based compensation in accordance with FASB ASC Topic 718, *Compensation—Stock Compensation*. Compensation cost for share-based awards granted to employees, directors, and officers is measured at the grant-date fair value of the award and recognized as expense over the requisite service period, which is generally the vesting period of the award. The fair value of restricted stock units is determined based on the closing price of the Company's common stock on the grant date. The fair value of stock options is determined using the Black-Scholes option pricing model, which requires the use of subjective assumptions including expected term, expected volatility, risk-free interest rate, and expected dividend yield. The Company has elected to recognize forfeitures as they occur in accordance with ASU 2016-09. The Company adopted the Elauwit Connection, Inc. 2025 Stock Incentive Plan (the "Plan") in November 2025. See Note 12 — Stock-Based Compensation for additional information regarding the Plan and stock-based compensation activity for the period.

#### Income Taxes
The Company utilizes an asset and liability approach for financial accounting and reporting for income taxes. The provision for income taxes is based upon income or loss after adjustment for those permanent items that are not considered in the determination of taxable income. Deferred income taxes represent the tax effects of differences between the financial reporting and tax basis of the Company's assets and liabilities at the enacted tax rates in effect for the years in which the differences are expected to reverse.

The Company evaluates the recoverability of deferred tax assets and establishes a valuation allowance when it is more likely than not that some portion or all the deferred tax assets will not be realized. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liabilities. In management's opinion, adequate provisions for income taxes have been made. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.

Tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement. A liability for "unrecognized tax benefits" is recorded for any tax benefits claimed in the Company's tax returns that do not meet these recognition and measurement standards. As of March 31, 2026 and December 31, 2025, no liability for unrecognized tax benefits was required to be recorded.

The Company's policy for recording interest and penalties associated with tax audits is to record such items as a component of operating expenses. There were no amounts accrued for penalties and interest as of March 31, 2026 and December 31, 2025. The Company does not expect its uncertain tax positions to change during the next twelve months. Management is currently unaware of any issues under review that could result in significant payments, accruals or material deviations from its position.

The Company had not yet filed its United States federal and state corporate tax returns for the year ended December 31, 2025, but will be filed prior to their extended due date. Net operating losses for these periods will not be available to reduce future taxable income until the returns are filed.

On July 4, 2025, the One Big Beautiful Bill (the "OBBB") Act, which includes a broad range of tax reform provisions, was signed into law in the United States and the Company continues to assess its impact. The Company has evaluated the impact of the OBBB Act on its 2025 financial statements and determined that the legislation did not have a material impact on the Company's income tax provision or effective tax rate for the year ended December 31, 2025. The Company currently does not expect the OBBB Act to have a material impact on its estimated annual effective tax rate in 2026.

#### Basic and Diluted Net Loss per Share of Common Stock
The Company calculates basic net loss per share by dividing net loss by the weighted average number of common shares outstanding during the reporting period. A net loss cannot be diluted so when the Company is in a net loss position, basic and diluted loss per common share are the same. If in the future the Company achieves profitability, the denominator of a diluted earnings per common share calculation will include both the weighted average number of shares outstanding and the number of common stock equivalents, if the inclusion of such common stock equivalents would be dilutive.

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#### Fair Value of Financial Instruments
The Company measures the fair value of financial assets and liabilities based on the guidance of FASB Topic 820, *Fair Value Measurements and Disclosures* ("ASC 820"), which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements.

#### Fair Value Measurements
ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an ordinary transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

● Level 1 - quoted prices in active markets for identical assets or liabilities;

● Level 2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable; and

● Level 3 - inputs that are unobservable.

The fair value of the Company's assets and liabilities, which qualify as financial instruments under ASC 820, approximates the carrying amounts in the unaudited condensed balance sheets, primarily due to their short-term nature. Based upon current borrowing rates with similar maturities the carrying value of long-term debt, and related party loans payable approximates fair value. The estimated fair value of the Company's SAFE liabilities is based on Level 3 inputs. Refer to Note 10.

#### Recently Adopted Accounting Standards
In December 2023, the FASB issued Accounting Standards Update (ASU) 2023-09, *Income Taxes (Topic 740): Improvements to Income Tax Disclosures* ("ASU 2023-09"), which requires public entities to disclose consistent categories and greater disaggregation of information in the rate reconciliation and for income taxes paid, among other amendments to enhance the effectiveness of income tax disclosures. The Company adopted ASU 2023-09 prospectively for the annual reporting period ended December 31, 2025. The adoption resulted in enhanced disclosure requirements but did not have a material impact on the Company's unaudited condensed financial statements.

In November 2024, the FASB issued ASU 2024-04, Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments ("ASU 2024-04"), which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The Company adopted ASU 2024-04 on January 1, 2026 on a prospective basis. The adoption did not have an impact on the Company's unaudited condensed financial statements as the Company has no convertible debt outstanding.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets ("ASU 2025-05"). ASU 2025-05 introduces a practical expedient that permits entities to assume that current conditions as of the balance sheet date remain unchanged throughout the remaining life of the asset when developing an estimate of expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. The Company adopted ASU 2025-05 on January 1, 2026. The Company did not elect to apply the practical expedient and continues to apply its existing methodology for estimating expected credit losses on current trade accounts receivable, as described above. The adoption did not have a material impact on the Company's unaudited condensed financial statements.

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**Recently Issued Accounting Pronouncements Not Yet Adopted**

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"), which requires public business entities to disclose, in interim and annual reporting periods, additional information about specified categories of expenses included in commonly presented income statement line items (such as cost of revenues and selling, general and administrative expenses). In January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date ("ASU 2025-01"), which clarifies that the amendments in ASU 2024-03 are effective for all public business entities for annual reporting periods beginning after December 15, 2026 and for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted, and the amendments may be applied either on a prospective or retrospective basis. The Company is currently assessing the potential impact that ASU 2024-03, as clarified by ASU 2025-01, will have on its unaudited condensed financial statement disclosures and has not yet selected an adoption method or elected to early adopt.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software ("ASU 2025-06"). ASU 2025-06 modernizes the cost recognition guidance for internal-use software development costs by replacing the existing project-stage based model with a principles-based framework, incorporates website development guidance previously codified in Subtopic 350-50, and updates certain disclosure requirements. ASU 2025-06 is effective for all entities for annual reporting periods beginning after December 15, 2027 and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently assessing the potential impact that ASU 2025-06 will have on its unaudited condensed financial statements.

Management does not believe that any other recently issued, but not yet effective, authoritative guidance, if currently adopted, would have a material impact on the Company's unaudited condensed unaudited financial statement presentation or disclosures.

#### Note 3. Revenue and Deferred Revenue
The following table provides the Company's revenues disaggregated by revenue stream (in thousands):

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| | | |
|:---|:---|:---|
|  | **For the three months ended March 31,** | **For the three months ended March 31,** |
|  | **2026** | **2025** |
| Revenue: |  |  |
| Network design and installation | $3377 | $4971 |
| Internet network services and hardware and internet service | 1053 | 475 |
| Total | $4430 | $5446 |

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Remaining performance obligations represent the transaction price of Company orders for which work has not been performed as of the end of a fiscal period and for contracts with substantive termination penalties. As of March 31, 2026, the aggregate amount of the transaction price allocated to remaining performance obligations was $38.1 million (which represents the amount of the Company's backlog). $7.6 million of the backlog relates to the network design and installation performance obligations and $30.5 million relates to internet network services and hardware and internet services performance obligations. Additionally, $3.7 million of the Company's backlog relates to jobs that are contracted but not yet started as of March 31, 2026. The Company estimates that approximately $13.7 million of the remaining performance obligations as of March 31, 2026 will be completed and recognized as revenue during 2026, with the remainder recognized between 2027 and 2032.

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Changes in the Company's current deferred revenue balance for the three months ended March 31, 2026 and 2025, were as follows (in thousands):

---

| | |
|:---|:---|
|  | **Deferred Revenues** |
| Balance as of January 1, 2025 | $6215 |
| Additions included in deferred revenue as of end of period | 2841 |
| Revenue recognized from opening balance | (3158) |
| Balance as of March 31, 2025 | 5898 |
| Balance as of January 1, 2026 | 3194 |
| Additions included in deferred revenue as of end of period | 4138 |
| Revenue recognized from opening balance | (3228) |
| Balance as of March 31, 2026 | $4104 |

---

Deferred revenue balances primarily consist of customer deposits and billings in excess of revenue, for which the Company has a contractual right to bill, related to the Company's network design and installation performance obligations. As of March 31, 2026, the Company's deferred revenue balance of $4.1 million was classified as $3.8 million in current liabilities and $0.3 million in non-current liabilities in the accompanying unaudited condensed balance sheets. The non-current portion represents the value of operating expense buydown commitments with remaining performance periods extending beyond twelve months. As of December 31, 2025, the Company's deferred revenue balance of $3.2 million was classified as $2.9 million in current liabilities and $0.3 million in non-current liabilities.

Changes in the Company's network financing receivable balance for the three months ended March 31, 2026 and 2025, were as follows (in thousands):

---

| | |
|:---|:---|
|  | **Network financing receivable** |
| Balance as of January 1, 2025 | $513 |
| Additional unbilled revenue recognized | 406 |
| Amounts billed during the period | (17) |
| Balance as of March 31, 2025 | $902 |
| Balance as of January 1, 2026 | $1291 |
| Additional unbilled revenue recognized |  |
| Amounts billed during the period | (53) |
| Balance as of March 31, 2026 | $1238 |

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#### Note 4. Accounts Receivable
Receivables are recorded and carried at the original invoiced amount or, for unbilled receivables, at the recognized revenue amount less an allowance for credit losses (in thousands).

---

| | | |
|:---|:---|:---|
|  | **March 31, 2026** | **December 31, 2025** |
| Trade accounts receivable | $2714 | $1997 |
| Unbilled receivables | 905 | 713 |
| Allowance for credit losses | (429) | (303) |
| Accounts receivable | $3190 | $2407 |

---

Trade accounts receivable and unbilled receivables as of December 31, 2025 was $2.0 million and $0.7 million, respectively. Trade accounts receivable represent amounts billed to customers for services rendered and network infrastructure installed or where we have a contractual right to bill. Unbilled receivables represent revenue recognized in excess of amounts billed to customers, primarily related to the allocation of contract consideration for network design and installation services recognized over time. As of March 31, 2026, the Company had unbilled receivables of approximately $0.9 million, which are expected to be billed within the next twelve months.

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As of March 31, 2026 and December 31, 2025, the Company recorded an allowance for credit losses of approximately $0.4 million and $0.3 million, respectively.

#### Note 5. Leases

#### Lessee
During the three months ended March 31, 2026 and 2025, operating lease expense was $14 thousand and $14 thousand, respectively. During the three months ended March 31, 2026 and 2025, the Company had a short-term lease expense of $18 thousand and $10 thousand, respectively. During the three months ended March 31, 2026 and 2025, the Company had variable lease expense of $7 thousand and $20 thousand, respectively.

The lease liability is based on the present value of its unpaid minimum lease payments over the lease term, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the incremental borrowing rate which is the rate the Company pays to borrow on a collateralized basis.

The table below presents certain information related to the weighted average remaining lease term and the weighted average discount rate for the Company's operating leases, as of March 31, 2026:

---

| | |
|:---|:---|
| Weighted average remaining lease term (in years) - operating leases | 0.25 |
| Weighted average discount rate - operating leases | 6.46% |

---

***South Carolina Office Lease Agreement***

On January 1, 2023, the Company initially entered into a lease for Suite 130 of 1700 Alta Vista Drive in Columbia, SC in which the initial term was January 1, 2023 through December 31, 2023. At the end of the initial lease term (December 31, 2023), the lease became a month to month lease in which either party (the Company or the lessor) could terminate the lease at any time with 30 days' notice. The Company leased this space on a month to month basis for six months until June 30, 2024. On May 31, 2024, the Company entered into a new lease with the same lessor for the original Suite 130 and an additional space, Suite 140. The term of the new lease is from July 1, 2024 to June 30, 2026. Total rent is $3,150 per month from July 1, 2024 to June 30, 2025 and $3,276 per month from July 1, 2025 to June 30, 2026.

***Lease Modification***

On January 2, 2025, the Company entered into its first amendment to the South Carolina Office Lease ("Amended SC Lease") to expand into an additional suite with approximately 1,950 additional square feet for a total of approximately 5,950 square feet of office space. The Amended SC Lease commencement date is January 2, 2025 and runs concurrently with the existing terms and conditions of the lease, through June 30, 2026. The Company determined that the lease payments increased commensurate with the standalone price for the additional right of use and as such, it is accounted for as a new lease, commencing on January 2, 2025. As such, the Company recorded an additional right-of-use asset and lease liability upon lease commencement of the new lease. Total rent is $1,536 per month from February 1, 2025 to June 30, 2025 and $1,598 per month from July 1, 2025 to June 30, 2026.

Future lease payments for all lease obligations as of March 31, 2026 for the following fiscal year and thereafter are as follows (in thousands):

---

| | |
|:---|:---|
| **Year ending December 31:** | **Operating Lease** |
| 2026 | $14 |
| Total minimum lease payments | 14 |
| Less effects of discounting |  |
| Present value of future minimum lease payments | $14 |

---

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#### Lessor
The Company owns certain networks and places them at customer sites under sales-type lease arrangements. The Company evaluates new leases pursuant to FASB ASC 842: Leases to determine lease classification. A lease is classified by a lessor as a sales-type lease if the significant risks and rewards of ownership reside with the customer. This situation is met if, among other things, there is an automatic transfer of title during the lease, a reasonably certain option to be exercised, the non-cancelable lease term is for more than a major part of the remaining economic useful life of the asset, the present value of the minimum lease payments represents substantially all of the leased asset's fair value at lease inception, or the asset is so specialized in nature that it provides no alternative use to the lessor (and therefore would not provide any future value to the lessor) after the lease term.

The Company had net investment in sales-type leases as of March 31, 2026 and December 31, 2025 of $0.4 and $0.5 million, respectively.

The table below reconciles the undiscounted cash flows to be received to the net investment in sales-type leases recorded in the unaudited condensed balance sheets (in thousands):

---

| | |
|:---|:---|
| 2026 (remainder) | $77 |
| 2027 | 102 |
| 2028 | 102 |
| 2029 | 102 |
| 2030 | 102 |
| Thereafter | 163 |
| Total minimum lease payments | 648 |
| Less: unearned interest | (202) |
| Net investment in sales-type leases | $446 |

---

Interest income recognized on lease arrangements is included in interest expense, net, on the unaudited condensed statements of operations, and is presented below (in thousands):

---

| | | |
|:---|:---|:---|
|  | **For the three months ended March 31,** | **For the three months ended March 31,** |
|  | **2026** | **2025** |
| Lease income - sales-type leases | $12 | $14 |
| Total lease income | $12 | $14 |

---

#### Note 6. Related Party Debt
The Company's related party debt consisted of (in thousands):

---

| | | |
|:---|:---|:---|
|  | **March 31, 2026** | **December 31, 2025** |
| **Related Party Debt, current:** |  |  |
| &nbsp;&nbsp;Network Service Agreements, current  | $778 | $804 |
| &nbsp;&nbsp;Network Service Agreements, net of current | 446 | 506 |
| **Related Party Debt total** | $1224 | $1310 |

---

***Network Service Agreements***

The Company has entered into a certain network service agreement (the "Network Service Agreements" or the "NSAs") with various customers, pursuant to which the Company will perform or has performed the design, installation, and management of a telecommunications network for the customer in financed project amounts ranging from $50 thousand to $550 thousand (the "Project Financing"). During the three months ended March 31, 2026 and 2025, the Company did not enter into any NSAs. The Company notes $0.5 million of the amount financed during 2024 relates to the sales-type lease (see Note 5). As of March 31, 2026 and December 31, 2025, the NSAs had aggregate carrying balances of approximately $1.2 million and $1.3 million, respectively. Repayments on the NSAs are made monthly and range from $21 thousand to $28 thousand.

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As part of each Project Financing, the Company sold an undivided interest in the NSA, to Endurance Opportunities, and interest shall accrue at a rate of 16.5% per annum, with respect to any payments owed to Endurance Opportunities by the Company, or advances owed to Endurance Opportunities by the Company, not made when due. In exchange, for the financing, the Company and Endurance Opportunities have entered into various participation and agency agreements (the "Participation and Agency Agreements), whereby Endurance Opportunities is granted an undivided participation interest entitling Endurance Opportunities to receive payments in relation to each respective NSA. At any time the Participation and Agency Agreement is outstanding, the Company shall have the right to repurchase Endurance's interest at par value, with par meaning all outstanding principal, unpaid interest, and fees. If Endurance Opportunities' interest under these Participation and Agency Agreements remains outstanding twenty four (24) months after the service activation date under each respective NSA, Endurance Opportunities shall have the option to require repurchase by the Company of Endurance Opportunities' interest, at par value. As a result at March 31, 2026, certain of the network financing arrangements are fully classified as current due to this provision. Interest expense related to these network service agreements are presented net of interest income received from network financing receivables, which accrues interest income at the same rate as the NSAs.

***Endurance Loan (April 1, 2024)***

On April 1, 2024 the Company entered into a fixed rate loan agreement (the "Endurance Loan") with Endurance Opportunities I LLC ("Endurance Opportunities"), a related party controlled by Endurance Financial LLC ('Endurance Financial'), which is an entity controlled by certain of the Company's directors and members of management. Under the agreement, Endurance Opportunities loaned $1.0 million to the Company in exchange for the Endurance Loan. The Endurance Loan had a maturity date of May 1, 2029 and bore interest at 18.0%, compounded annually. Monthly payments were required under the Endurance Loan of $15 thousand through October 2024 and $19 thousand, thereafter through maturity. For the three months ended March 31, 2026 and 2025, the Company incurred $0 thousand, and $26 thousand of interest expense, respectively, which is recognized in interest expense in the unaudited condensed statements of operations. In connection with the Offering, the Endurance Loan was fully settled prior to December 31, 2025.

***Endurance Business Loan (November 12, 2024)***

On November 12, 2024, the Company entered into a fixed rate loan agreement (the "Endurance Business Loan") with Endurance Opportunities, a related party, where Endurance Opportunities loaned $0.3 million to the Company. The Endurance Business Loan had a maturity date of May 2026 and bore interest at 16.5% per year. As of March 31, 2026 and March 31, 2025, the Company incurred $0 thousand and $10 thousand of interest expense, respectively, which is recognized in interest expense in the unaudited condensed statements of operations. In connection with the Offering, the Endurance Business Loan was fully settled prior to December 31, 2025.

***Endurance Promissory Note (March 1, 2025)***

On March 1, 2025, the Company entered into a fixed rate loan agreement (the "Endurance Promissory Note") with Endurance Financial, where Endurance Financial loaned $0.5 million to the Company. The Endurance Promissory Note had a maturity date of eighteen months and bore interest at 16.5%. Quarterly payments of interest were required with outstanding principal amount of the loan due on the maturity date. For the three months ended March 31, 2026 and 2025 the Company incurred $0 thousand and $7 thousand, respectively, of interest expense which is recognized in interest expense in the unaudited condensed statements of operations. In connection with the Offering, the Endurance Promissory Note was fully settled prior to December 31, 2025.

***Second Endurance Promissory Note (March 25, 2025)***

On March 25, 2025, the Company entered into a fixed rate loan agreement (the "Second Endurance Promissory Note") with Endurance Financial, where Endurance Financial loaned $0.5 million to the Company. The Second Endurance Promissory Note had a maturity date of ninety days and bore interest at 16.5%. Monthly payments of interest were required with outstanding principal amount of the loan due on the maturity date. For the three months ended March 31, 2025, the Company incurred $2 thousand of interest expense, which is recognized in interest expense in the unaudited condensed statements of operations. On July 7, 2025, the Second Endurance Promissory Note was modified to extend the term of the note an additional 90 days, to September 25, 2025. All other provisions of the loan remained the same. The debt modification was deemed not substantive and was accounted for as a debt modification. On September 24, 2025, the Second Endurance Promissory Note was modified to extend the term of the note to October 31, 2025. All other provisions of the previously modified loan remain the same. The debt modification was deemed not substantive and was accounted for as a debt modification. In connection with the Offering, the Second Endurance Promissory Note was fully settled prior to December 31, 2025.

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As of March 31, 2026 the future minimum principal payments on all related party debt, excluding accrued interest amounts, were as follows (in thousands):

---

| | |
|:---|:---|
| **Years ending December 31:** | **Future Minimum Principal**<br>**Payments** |
| 2026 (remainder) | $256 |
| 2027 | 341 |
| 2028 | 341 |
| 2029 | 242 |
| 2030 | 44 |
| &nbsp;&nbsp;Total future payments | $1224 |

---

**Note 7. Notes Payable**

Notes payable consist of the following (in thousands):

---

| | | |
|:---|:---|:---|
|  | **March 31, 2026** | **December 31, 2025** |
| Motherlode Promissory Note, current | $199 | $196 |
| Motherlode Promissory Note, net of current | 442 | 490 |
| Total note payable | $641 | $686 |

---

***Motherlode Promissory Note (April 12, 2024)***

On April 12, 2024, the Company entered into a promissory note (the "Motherlode Promissory Note") with Motherlode, LLC ("Motherlode"), pursuant to which Motherlode loaned the Company $1.0 million. The Motherlode Promissory Note bears interest at 6.0% per annum, compounded annually, requires monthly principal and interest installments of $19 thousand, and matures on April 30, 2029. Motherlode was a related party of the Company at the time the Motherlode Promissory Note was issued, and ceased to be a related party of the Company effective April 12, 2024. For the three months ended March 31, 2026 and 2025, the Company incurred interest expense of $10 thousand and $13 thousand, respectively, related to the Motherlode Promissory Note, which is included in interest expense, net in the accompanying unaudited condensed statements of operations. As of March 31, 2026 and December 31, 2025, the outstanding principal balance of the Motherlode Promissory Note was $0.6 million and $0.7 million, respectively.

As of March 31, 2026 the future minimum principal payments on notes payable, excluding accrued interest amounts, were as follows (in thousands):

---

| | |
|:---|:---|
| **Years ending December 31:** | **Future Minimum Principal**<br>**Payments** |
| 2026 (remainder) | $148 |
| 2027 | 208 |
| 2028 | 221 |
| 2029 | 64 |
| &nbsp;&nbsp;Total future payments | $641 |

---

#### Note 8. Related Party Payables
***Management Agreement (December 6, 2019, was not renewed post 2022)***

On December 6, 2019 the Company entered into a management agreement (the "Management Agreement") with Elauwit Connection, LLC, a Wyoming limited liability company ("Elauwit LLC"), a related party, that was dissolved in October 2024, whereby certain key persons of Elauwit LLC, provided management services to manage all aspects of the Company, subject to supervision and oversight by the Company's board of directors (the "Board"). The key persons ("Key Persons") who supervised all services include the Executive Chairman and the Chief Executive Officer of the Company. In consideration of the services provided by the Key Persons, the Company paid Elauwit LLC a sum of $45 thousand per month during the initial year of the Management Agreement, subject to potential annual

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increases and other compensation, as determined by the Board. The term of the agreement was three (3) years commencing on December 1, 2019 and terminated on November 30, 2022. Beginning in December 2020, the Key Persons elected to defer portions of their consideration. On August 20, 2024, as part of the Deferred Compensation Agreement, defined below, the Company agreed to pay the Key Persons $0.5 million, at an interest rate of 3.25%, on cumulative balances owed. For the three months ended March 31, 2026 and 2025 the Company incurred $0 thousand, and $4 thousand of interest expense, respectively, which is recognized in interest expense in the unaudited condensed statements of operations. As of December 31, 2025 the deferred compensation had been repaid in full with the Offering in November 2025.

Subsequent to November 30, 2022, the Company continued making payments under an informal agreement to same Key Persons. For the three months ended March 31, 2026 and 2025, the Company incurred expenses of $0 thousand and $90 thousand, respectively, included in general and administrative expenses on the unaudited condensed unaudited condensed statements of operations.

***Deferred Compensation Agreement (August 20, 2024)***

On August 20, 2024 the Company entered into a deferred compensation agreement, as amended (the "Deferred Compensation Agreement") with certain executives of the Company, whereby the executives, deferred a certain portion of their salaries. The deferred salaries bore interest of 3.25%, on all cumulative balances outstanding as of February 1, 2022. The Company agreed to pay each of the executives $2.5 thousand per month and there was no fixed maturity date. For the three months ended March 31, 2026 and 2025, the Company incurred 0 thousand and $1 thousand of interest expense, respectively, which is recognized in interest expense in the unaudited condensed statements of operations. As of December 31, 2025, the Deferred Compensation Agreement had been repaid in full with the Offering in November 2025.

#### Note 9. Equity Offerings

#### Common Stock
***Amendment to the Certificate of Incorporation***

On June 16, 2025, the Company amended and restated its certificate of incorporation to, among other things, (i) provide for a classified structure for the election of directors; (ii) increase the number of shares of common stock, par value $0.0001 per share, authorized for issuance to 14,900,000, consisting of 12,000,000 shares of Class A common stock and 2,900,000 shares of Class B common stock; (iii) authorize the Board of Directors to issue up to 100,000 shares of preferred stock, par value $0.0001 per share.

On August 14, 2025, the Company amended and restated its certificate of incorporation to, among other things, (i) authorize 15,000,000 of capital stock which is divided into two classes, with 14,900,000 shares designated as common stock, $0.0001 par value per share (the "common stock"), and 100,000 shares designated as Preferred Stock, par value $0.0001 per share (the "Preferred Stock") and (ii) provide that the holders of common stock hold all voting power.

***Initial Public Offering***

On November 4, 2025, the Company entered into the Underwriting Agreement with the Representative, for the Offering of 1,667,000 shares of common stock at a public offering price of $9.00 per share. The underwriters agreed to purchase the shares at a 7.0% discount to the public offering price. The Offering closed on November 6, 2025, resulting in gross proceeds of approximately $15.0 million. On November 24, 2025, the Company closed the sale of an additional 68,989 shares of common stock, representing the partial exercise of the Representative's 45-day over-allotment option, resulting in additional gross proceeds of approximately $0.6 million. In total, the Company issued 1,735,989 shares of common stock in the offering for aggregate gross proceeds of approximately $15.6 million, before deducting underwriting discounts and commissions and other offering expenses. After deducting underwriting discounts and commissions of approximately $1.3 million and other offering costs of approximately $0.7 million, the Company received net proceeds of approximately $13.6 million. The underwriting discounts, commissions, and other offering costs were recorded as a reduction of additional paid-in capital.

Pursuant to the Underwriting Agreement, the Company issued to the Representative warrants to purchase an aggregate of 121,520 shares of common stock (representing 7% of the total shares sold in the Offering, including shares sold upon partial exercise of the over-allotment option). The Representative's Warrants are exercisable at $10.35 per share, are initially exercisable beginning on May 2, 2026, and expire on November 2, 2030.

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***Put Right Settlement***

In connection with the Put-Call Agreement, Baron Hunter and Steele Creek were each granted the right to sell to the Company up to $1.0 million in shares of common stock at a price of $8.10 per share, representing a 10% discount to the Offering price. On November 13, 2025, each of Baron Hunter and Steele Creek exercised its put option. On November 14, 2025, the Company repurchased an aggregate of 123,456 shares of common stock from each of Baron Hunter and Steele Creek, for an aggregate of 246,912 shares, at $8.10 per share, for aggregate cash consideration of approximately $2.0 million. The repurchased shares were retired.

#### Note 10. SAFE
***Strategic Investment***

On January 6, 2025, the Company entered into a Simple Agreement for Future Equity (the "SAFE Agreement" or "SAFE") with an investor (the "Investor"). Pursuant to the terms of the SAFE Agreement, the Company received an aggregate amount of $1.0 million (the "SAFE Amount"). In the event of a liquidity event, as defined in the SAFE Agreement, the Investor was entitled to the amount payable on the number of shares of common stock equal to the SAFE Amount divided by the price per share in the liquidity event multiplied by a discount price of 85%.

The SAFE was recorded as a liability in accordance with the applicable accounting guidance due to the potential for the Company to settle the fixed outstanding balance of the SAFE liability in a variable number of shares. The initial fair value of the SAFE liability was $1.0 million. Subsequent changes in fair value at each reporting period are recognized in the unaudited condensed statements of operations as changes in fair value of SAFE liability. On November 6, 2025, upon the closing of the Offering, the SAFE liability was extinguished by automatic conversion into 130,719 shares of common stock. Accordingly, no SAFE liability was outstanding as of March 31, 2026 or December 31, 2025, and no gain or loss related to the SAFE was recognized in the unaudited condensed statements of operations for the three months ended March 31, 2025.

#### Note 11. Employee Benefit Plan
In April 2024, the Company established a Safe Harbor 401(k) contribution plan under Section 401(k) of the Internal Revenue Code ("401(k) Plan"). Under the terms of the 401(k) Plan, all full-time employees were eligible to make voluntary contributions as a percentage or defined amount of compensation. The Company made matching contributions based on 100% of each employee's contribution up to the first 3% of pay and then on 50% of employee contributions on the next 2% of pay of the employee's eligible compensation.

The Company incurred expenses of approximately $29 thousand and $14 thousand, respectively, related to matching contributions for the three months ended March 31, 2026 and 2025.

**Note 12. Stock-Based Compensation**

In November 2025, the Company adopted the Elauwit Connection, Inc. 2025 Stock Incentive Plan (the "Plan"), which permits the grant of stock options, restricted stock units ("RSUs") and other stock-based awards. The Plan initially authorized 700,000 shares of common stock for issuance, subject to an annual evergreen increase.

On January 28, 2026, the Compensation Committee of the Board of Directors approved RSU awards to certain employees of the Company with an aggregate grant-date fair value of approximately $88 thousand (16,552 RSUs). The RSUs vest in full on the one-year anniversary of the grant date, subject to continued service. The grant-date fair value of the RSUs of $5.25 per share was determined based on the closing price of the Company's common stock on the Nasdaq Capital Market on January 28, 2026. Compensation cost is recognized on a straight-line basis over the one-year requisite service period.

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RSU activity for the three months ended March 31, 2026 was as follows:

---

| | | |
|:---|:---|:---|
|  | <br>**Number of RSUs** | **Weighted – Average**<br>**Fair Value** |
| Unvested at January 1, 2026 |  | $— |
| Granted | 16552 | 5.25 |
| Vested |  |  |
| Forfeited |  |  |
| **Unvested at March 31, 2026** | **16552** | $**5.25** |

---

Stock-based compensation expense was $15 thousand for the three months ended March 31, 2026, included within general and administrative expense, and was zero for the three months ended March 31, 2025. As of March 31, 2026, total unrecognized compensation cost related to unvested RSUs was approximately $73 thousand, expected to be recognized over a weighted-average remaining requisite service period of approximately 0.83 years. See Note 16 — Subsequent Events for additional information regarding equity awards granted by the Company subsequent to March 31, 2026.

#### Note 13. Commitments and Contingencies
The Company is periodically involved in legal proceedings, legal actions and claims arising in the ordinary course of business. Management does not believe that there is any pending or threatened proceeding against the Company, which, if determined adversely, would have a material adverse effect on the Company's business, results of operations, cash flows, or financial condition.

#### Note 14. Net Loss per Share
Participating securities have the effect of diluting both basic and diluted earnings per share during periods of income. During periods of loss, no loss is allocated to the participating securities since the holders have no contractual obligation to share in the losses of the Company.

The Company calculates basic net loss per share by dividing net loss by the weighted average number of common shares outstanding during the reporting period. Diluted net loss per share is computed by giving effect to all potentially dilutive securities. Because the Company was in a net loss position for all periods presented, basic and diluted net loss per share are the same, as the inclusion of all potentially dilutive securities would have been antidilutive.

The following potentially dilutive securities were excluded from the computation of diluted net loss per share for the periods presented because their inclusion would have been antidilutive:

---

| | | |
|:---|:---|:---|
|  | **For the three months ended March 31,** | **For the three months ended March 31,** |
|  | **2026** | **2025** |
| Representative's Warrants | 121520 |  |
| Restricted Stock Units | 16552 |  |
| Total | 138072 |  |

---

In connection with the Company's initial public offering in November 2025, the Company issued warrants to the Representative to purchase an aggregate of 121,520 shares of common stock at an exercise price of $10.35 per share. These warrants are initially exercisable on May 2, 2026 and expire on November 2, 2030. The warrants were excluded from the computation of diluted net loss per share for the three months ended March 31, 2026 because their effect would have been antidilutive. At March 31, 2025, there were no potentially dilutive securities outstanding.

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**Note 15. Income Taxes**

The Company's provision for income taxes is calculated by applying an estimated annual effective tax rate to year-to-date pre-tax income or loss and adjusting for any discrete tax items recognized in the period, in accordance with FASB Accounting Standards Codification ("ASC") 740-270, Income Taxes — Interim Reporting.

For the three months ended March 31, 2026 and 2025, the Company recorded no income tax expense or benefit. The Company's effective tax rate was 0% for both periods, which differs from the U.S. statutory federal income tax rate of 21% primarily due to the recording of a full valuation allowance against the Company's net deferred tax assets, which results in no current period income tax benefit being recognized on the Company's pre-tax loss.

In assessing the realizability of its deferred tax assets, the Company considers all available positive and negative evidence, including its history of cumulative losses, projections of future taxable income, the reversal of existing taxable temporary differences, and prudent and feasible tax planning strategies. As a result of this assessment, the Company continues to conclude that it is more likely than not that the deferred tax assets will not be realized as of March 31, 2026, and accordingly continues to maintain a full valuation allowance against its net deferred tax assets. There were no material changes to the Company's valuation allowance position during the three months ended March 31, 2026.

The Company did not recognize any material discrete tax items during the three months ended March 31, 2026 or 2025. On July 4, 2025, the OBBB Act, which includes a broad range of tax reform provisions, was signed into law in the United States. The Company evaluated the impact of the OBBB Act on its unaudited condensed financial statements as of and for the year ended December 31, 2025 and determined that it did not have a material impact on its income tax provision or effective tax rate. The Company does not currently expect the OBBB Act to have a material impact on its estimated annual effective tax rate for 2026 and continues to monitor any guidance issued thereunder.

As a result of the Company's Offering completed in November 2025 (see Note 9), the Company may have experienced an "ownership change" within the meaning of Section 382 of the Internal Revenue Code. If an ownership change has occurred, the Company's ability to utilize its U.S. federal and state net operating loss carryforwards and certain other tax attributes generated prior to the ownership change to offset future taxable income would be subject to annual limitations. The Company has not completed a formal Section 382 analysis as of the date of these financial statements. Any limitation is not expected to result in additional cash tax expense in the current period given the Company's continued cumulative loss position and the related full valuation allowance against the deferred tax assets associated with the affected attributes.

As of March 31, 2026 and December 31, 2025, the Company had no liability for unrecognized tax benefits. There were no material changes to the Company's unrecognized tax benefits during the three months ended March 31, 2026, and the Company does not expect any material change in the next twelve months.

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#### Note 16. Subsequent Events
The Company evaluated subsequent events and transactions that occurred after the balance sheet date through May 14, 2026, the date the financial statements were issued.

#### Operating Lease Commitment
On April 1, 2026, the Company entered into an operating lease for approximately 10,927 square feet of office and warehouse space in Columbia, South Carolina. The lease has an initial term of approximately five years, commencing May 1, 2026, with aggregate undiscounted base rent payments of approximately $611 thousand over the initial term. The right-of-use asset and corresponding lease liability will be recognized upon the lease commencement date and reflected in the Company's financial statements for the quarter ending June 30, 2026.

#### Equity Awards Under the 2025 Stock Incentive Plan
On April 2, 2026, the Compensation Committee of the Board of Directors granted (i) RSUs to certain directors and officers of the Company, with one-year cliff vesting and other terms substantially similar to the January 28, 2026 RSU awards, and (ii) non-qualified stock options to an officer of the Company with an exercise price of $6.50 per share and a 10-year contractual term.

#### May 2026 Term Loan with Endurance Opportunities
On May 14, 2026, the Company entered into the $2.0 million May 2026 Term Loan with Endurance Opportunities, an existing related-party lender. In connection with the May 2026 Term Loan, the Company issued the May 2026 Note in favor of Endurance Opportunities with a principal amount of $500 thousand and agreed to issue three additional commercial promissory notes in favor of Endurance Opportunities, each with a principal amount of $500 thousand. The May 2026 Note bears interest at a fixed rate of 15.5% per annum on the outstanding principal balance, requires monthly payments of interest with the outstanding principal amount due on the maturity date, and has a maturity date of 36 months. Each subsequent commercial promissory note issued in accordance with the May 2026 Term Loan will have the same terms and conditions as the May 2026 Note. The May 2026 Term Loan, May 2026 Note and subsequent commercial promissory notes to be issued in accordance with the May 2026 Term Loan were reviewed and approved by the Audit Committee in accordance with the Company's Related Person Transactions Policy. The Company intends to use the proceeds for general working capital and continued network deployment activities.

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#### ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion reviews the operating results of Elauwit Connection, Inc. ("Elauwit," the "Company," "we," "our," or "us") for the three months ended March 31, 2026 (the "first quarter"), the respective prior year period ended March 31, 2025 (the "prior year period"), and our financial condition as of March 31, 2026, and should be read in conjunction with our financial statements and notes thereto included elsewhere in this report and our other documents filed with the Securities and Exchange Commission ("SEC"). Forward-looking statements in this Quarterly Report on Form 10-Q (this "Form 10-Q") are qualified by the cautionary statement included under the next subheading, "Forward-Looking Statements."

#### FORWARD-LOOKING STATEMENTS
In addition to historical information, this Form 10-Q contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which provides a "safe harbor" for forward-looking statements made by us. All statements, other than statements of historical facts, including statements concerning our plans, objectives, goals, beliefs, business strategies, future events, business conditions, results of operations, financial position, business outlook, business trends, and other information, may be forward-looking statements. Words such as "aim," "anticipate," "believe," "can," "continue," "could," "estimate," "expect," "may," "plan," "potential," "will," "would" and variations of such words or similar expressions are intended to identify forward-looking statements. The forward-looking statements are not historical facts, and are based upon our current expectations, beliefs, estimates and projections, and various assumptions, many of which, by their nature, are inherently uncertain and beyond our control. Our expectations, beliefs, estimates, and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that our expectations, beliefs, estimates, and projections will occur or can be achieved. Actual results may vary materially from what is expressed in or indicated by the forward-looking statements.

These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or anticipated results, including:

● our history of losses;

● our ability to obtain additional financing and fund our operations;

● our market opportunity;

● the effects of increased competition and innovations by new and existing competitors in our market and our ability to adapt to and anticipate changes in technology;

● our adoption and use of artificial intelligence;

● our ability to maintain and grow relationships with property owners and network partners and increase our customer base;

● our ability to consistently win competitive request for proposal processes, become a preferred or sole supplier for new-build projects, increase our gross margins with newer customer relationships, and capitalize on the opportunities in our pipeline;

● our reliance on manufacturers to obtain the materials necessary to provide our services;

● the potential effects of delays or disruptions in property development;

● the future growth of the network services industry and demands of our customers;

● the significant investment required to deploy our Network-as-a-Service solutions;

● our ability to pay our debts as they come due;

● our ability to grow the business and effectively manage or sustain our growth;

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● future revenue, hiring plans, expenses and capital expenditures;

● our ability to comply with new or modified laws and regulations that currently apply or become applicable to our business or the business of our customers;

● our ability to maintain the listing of our common stock on The Nasdaq Stock Market LLC ("Nasdaq") and comply with Nasdaq's listing standards;

● our ability to recruit and retain key employees and management personnel;

● our financial performance and capital requirements;

● our ability to maintain, protect, and enhance our intellectual property;

● the material weaknesses in our internal control over financial reporting and the potential insufficiency of our disclosure controls and procedures to detect errors or acts of fraud; and

● the potential lack of liquidity and trading of our securities.

#### BUSINESS OVERVIEW
We are a customer-centric service provider of broadband Internet networks for the multifamily and student housing property sectors across the United States. Our managed WiFi networks provide property-wide Internet access for residents, guests, property management staff, and third-party technology vendors at each property we serve. We provide our service offering wholesale to REITs, property ownership groups, and property management companies, engaged in our target real estate sectors, who then offer the service to their residents.

In building out a managed WiFi network, we provide network design, project management, network engineering, network installation, and quality control. As part of our service delivery model, we provide dedicated bandwidth, 24/7 network monitoring, network maintenance, and resident support.

Our mission is to be the leading experience provider of Internet access solutions. For our property ownership clients, this means clear communication and timely execution. For the end users of our service, residents and their guests, this means dedication to the objective of providing an excellent resident experience. We differentiate ourselves in the area of resident experience by building reliable networks, responding to service requests quickly, establishing support protocols that lead to industry-leading first touch resolution metrics, and communicating effectively with key stakeholders throughout.

While anyone can claim top tier operational capabilities, we have grown quickly through word-of-mouth, as a trusted partner for real estate development and ownership groups. We have an excellent track record of repeat business from parties we contract with. Internet access has become a utility, but unlike electricity and water, reliability is not something property owners can take for granted. Our performance has created the opportunity to expand within ownership portfolios and is a key aspect of our growth strategy moving forward.

We closely monitor the challenges and needs of development and ownership groups in the real estate sectors in focus. A continued theme has been the fragmented market of service providers in the space in which we operate and issues stemming out of such. We view these issues to be a large opportunity for our business and an indication that consolidation is likely in the near future. We aim to be a driver of consolidation.

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#### RESULTS OF OPERATIONS

#### Summary
***Comparison of the Three Months Ended March 31, 2026 and 2025***

Key results for the three months ended March 31, 2026 include:

● Total revenue decreased approximately 18.6% for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily reflecting declines in certain non-recurring and project-based activities given the more volatile nature of project-based revenues.

● Gross margin of 19% for the first quarter, primarily from network construction activities with an increased rate of network activations in the first quarter whereby we recognize the majority of contribution from a given project. Over time, we expect our gross margin to increase as higher margin recurring service fees constitute a growing share of revenues.

● Operating expenses for the first quarter of 2026 increased by 85.9% compared to the first quarter of 2025, primarily driven by continued growth in our project management and network engineering functions, as well as expenses associated with the preparation for being a publicly traded company.

● Backlog as of March 31, 2026 was $38.1 million, compared to $36.0 million as of March 31, 2025.

● Contracted units as of March 31, 2026 were 36,720, compared to 28,375 as of March 31, 2025.

● Activated units as of March 31, 2026 were 24,530, compared to 11,674 as of March 31, 2025.

● Billed units as of March 31, 2026 were 20,059, compared to 9,339 as of March 31, 2025.

● Recurring service revenue was $1.1 million for the first quarter compared to $0.5 million for the prior year period.

*Revenue*

Revenue for the three months ended March 31, 2026 decreased $1.0 million, or 18.6%, to $4.4 million compared to $5.4 million for the three months ended March 31, 2025. The decrease was primarily driven by lower network design and installation revenue of $3.4 million for the three months ended March 31, 2026, compared to $5.1 million for the three months ended March 31, 2025, reflecting the timing of project starts and the completion in 2025 of several large network construction projects that did not recur at the same level in 2026. Network design and installation revenue is project-based and recognized over time using a cost-to-cost input method, and as a result it is inherently lumpy from quarter to quarter as we continue to build our recurring service revenue base with the continued completion of construction projects converting to recurring service revenues. Recurring service revenue, which is recognized ratably over the contract term as the Company provides ongoing managed network services to property owners and their residents, increased $0.6 million, or 121.7%, to $1.1 million for the three months ended March 31, 2026, compared to $0.5 million for the three months ended March 31, 2025. The increase reflects the ramp in recurring service revenue from networks deployed in 2024 and 2025 that reached activation and began billing under long-term service agreements during the period, which the Company expects to continue to grow as a share of total revenue as additional construction projects complete and convert to ongoing recurring service contracts.

*Cost of Revenue*

Cost of revenue decreased $0.6 million, or 13.9% to $3.6 million for the three months ended March 31, 2026, compared to $4.2 million for the three months ended March 31, 2025. The decrease was primarily driven by reduced direct project costs (including hardware, contracted labor, and project management) corresponding to lower network design and installation revenue in the period. The percentage decrease in cost of revenue was less than the percentage decrease in revenue, reflecting the fixed and semi-fixed components of network operations and customer support costs that support our recurring service revenue base.

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*Gross Profit*

Gross profit decreased 34.3% to $0.8 million for the three months ended March 31, 2026, compared to $1.3 million for the three months ended March 31, 2025. Our gross margin for the three months ended March 31, 2026 decreased to 19% compared to 23% for the three months ended March 31, 2025, due to the lower mix of network design and installation revenue, which historically carries a higher contribution margin than the early-period margins on internet network services as recurring service revenue scales. Over time, we expect our gross margin to increase as higher-margin recurring service revenue continues to grow as a share of total revenue.

*Operating Expenses*

Operating expenses were $3.0 million for the first quarter compared to $1.6 million for the prior year period. The increase was driven by:

● **Public company costs.** Following the November 2025 initial public offering, we have incurred increased audit, legal, insurance, investor relations, and Sarbanes-Oxley readiness expenditures, which are reflected in general and administrative expense and were not present, or were present at significantly lower levels, in the prior year period.

● **Personnel costs.** Continued investment in our project management, network engineering, finance, and operational functions, including increased headcount and the addition of certain executive and senior management positions following our initial public offering (the "IPO").

*Operating Loss*

Operating loss was $2.2 million for the three months ended March 31, 2026, compared to an operating loss of $0.4 million for the three months ended March 31, 2025. The increase in operating loss was driven by the lower gross profit and the higher operating expenses described above.

*Interest Income (Expense)*

Interest income was $0.04 million for the first quarter, compared to interest expense of $0.1 million for the prior year period. The shift primarily reflects interest earned on cash proceeds from our IPO and a reduction in interest expense due to the repayment of related party debt following our IPO.

*Net Loss*

Net loss increased $1.7 million to net loss of $2.2 million for first quarter compared to net loss of $0.4 million for the prior year period. The reasons for the increase in net loss are discussed above.

*Non-GAAP Measures*

Adjusted earnings before interest (income) expense, income taxes, depreciation and amortization ("EBITDA") is provided for informational purposes only and is not a measure of financial performance under accounting principles generally accepted in the U.S. ("GAAP").

Management believes the presentation of adjusted EBITDA, reflecting non-GAAP adjustments, provides important supplemental information to investors and other users of our financial statements in evaluating the operating results of the Company. In particular, by excluding expenses that are not directly related to our operating performance, we are able to present a view of our underlying business that the management team uses to analyze our historical performance and plan for our future performance. Adjusted EBITDA is a key metric used by management and the Board of Directors to assess the Company's financial and operating performance. This non-GAAP disclosure has limitations as an analytical tool, should not be viewed as a substitute for net income (loss) determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of the Company's results as reported under GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies.

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The following tables present a reconciliation of adjusted EBITDA to net loss (the most comparable GAAP measure) in accordance with GAAP for the first quarter:

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| | | |
|:---|:---|:---|
|  | **For the three months ended March 31,** | **For the three months ended March 31,** |
|  | **2026** | **2025** |
| Net Loss | $(2162) | $(442) |
| Addback: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax expense |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest (income) expense, net | (38) | 73 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 14 | 12 |
| **EBITDA** | $(2186) | $(357) |
| Addback: |  |  |
| &nbsp;&nbsp;Change in fair value of SAFE liability |  |  |
| &nbsp;&nbsp;Stock based compensation expense | 15 |  |
| **Adjusted EBITDA** | $(2171) | $(357) |

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***Key Performance Metrics***

Management uses recurring service revenue, contracted units, activated units, billed units, and backlog as key performance metrics to assess our financial performance and results of operations. The measures of recurring service revenue, contracted units, activated units, billed units, and backlog may vary across the internet services or real estate industries. Therefore, our recurring service revenue, contracted units, activated units, billed units, and backlog measures are not necessarily comparable to similarity titled measures reported by other companies.

We define recurring service revenue as the monthly recurring service revenue initiated by network activation under our long-term service agreements. Management believes that the Company's ability to retain and expand revenue from existing customers is an indicator of the long-term value of its customer relationships and potential future business opportunities.

We define contracted units as the total number of individual units waiting to be built or in the process of being installed across the properties using our networks along with the individual units we currently serve. We believe this metric is useful to investors because it illustrates the total number of units we will serve once the construction process is complete.

We define activated units as the total number of individual units that are fully installed and on, but not yet collecting revenue due to onboarding process, across the properties using our networks. We believe this metric is useful for investors because it illustrates the total number of individual units we will collect revenue on once the onboarding process is complete, and can be tracked over time to show the reach of our networks.

We define billed units as the total number of individual units we are currently collecting revenue on across the properties using our networks. We believe this metric is useful to investors because it illustrates the total number of individual units we collect revenue on and can be tracked over time to show the reach of our networks. We believe it is more useful to compare total billed units as opposed to total customers or total subscribers because our revenue is more closely tied to the number of units we serve than the total number of customers or subscribers.

Backlog is defined as the aggregate amount of a contract price allocated to remaining performance obligations. Total backlog can include network design and installation performance obligations and internet network services and hardware and internet services performance obligations. We believe tracking backlog is useful to investors because it illustrates the remaining performance obligations under our contracts and the revenue we expect to recognize in the future.

**LIQUIDITY AND CAPITAL RESOURCES**

As of March 31, 2026, the Company had cash of approximately $3.5 million and net working capital of approximately $1.9 million. The Company has incurred recurring net losses from operations and negative cash flows from operating activities since inception, with an accumulated deficit of approximately $16.8 million as of March 31, 2026. During the three months ended March 31, 2026 the Company had used approximately $2.5 million in cash for operating activities.

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These historical conditions raised substantial doubt about the Company's ability to continue as a going concern. On November 6, 2025, the Company completed the Offering, raising gross proceeds of approximately $15.0 million. As of March 31, 2026, the Company had no required debt repayments other than scheduled monthly principal and interest payments on its outstanding promissory note with Motherlode (as defined below) and Network Service Agreements (see Notes 6 and 7).

On May 14, 2026, the Company's entered into a new $2.0 million business loan agreement (the "May 2026 Term Loan") with Endurance Opportunities (as defined below), an existing related-party lender. In connection with the May 2026 Term Loan, the Company issued a commercial promissory note in favor of Endurance Opportunities with a principal amount of $500 thousand (the "May 2026 Note") and agreed to issue three additional commercial promissory notes in favor of Endurance Opportunities, each with a principal amount of $500 thousand. The May 2026 Note has a maturity date of 36 months and bears interest at 15.5% per annum on the outstanding principal balance. Monthly payments of interest are required under the May 2026 Note with the outstanding principal amount of the May 2026 Note due on the maturity date. Each subsequent commercial promissory note issued in accordance with the May 2026 Term Loan will have the same terms and conditions as the May 2026 Note. The Company intends to use the proceeds for general working capital and continued network deployment activities. See Note 16 — Subsequent Events.

Management expects operating losses and negative cash flows from operations to continue for the foreseeable future as the Company invests in its commercial capabilities; however, management expects such losses and negative cash flows to decrease over time as the Company scales its operations and grows its revenue base. In evaluating the Company's ability to continue as a going concern for a period of one year from the date these financial statements are issued, management considered the Company's current liquidity position, including net proceeds from the Offering, the planned $2.0 million inflow from the May 2026 Term Loan, forecasted cash flows reflecting the anticipated improvement in operating results, and the ability, if necessary, to reduce discretionary spending and other operating costs to preserve liquidity. Based on this assessment, management has concluded that the Company's current liquidity position and expected cash flows are sufficient to fund operations for at least the next twelve months, and that substantial doubt about the Company's ability to continue as a going concern does not exist as of the date these financial statements are issued.

***Liquidity***

Our primary liquidity requirements are for working capital, debt repayment and Network-as-a-Service project deployment. Although income taxes are not currently a significant use of funds, after the benefits of our net operating loss carryforwards are fully recognized, they could become a material use of funds, depending on our future profitability and future tax rates. Our liquidity needs have been met primarily through equity offerings and related party loans.

As of March 31, 2026, we had approximately $3.5 million in cash and cash equivalents. As of December 31, 2025, we had approximately $6.2 million in cash and cash equivalents. During the three months ended March 31, 2026 and 2025, we used net cash in operating activities of $2.5 million and 1.5 million, respectively. As of March 31, 2026 and December 31, 2025 we had a working capital surplus of $1.9 million and $4.1 million. Key drivers of our working capital position have been, and continue to be, network construction receivables and deferred revenue.

***Capital Resources***

On November 6, 2025, we closed our IPO and sold the underwriters 1,667,000 shares of common stock for gross proceeds of approximately $15.0 million, before deducting underwriting discounts and commissions and other offering expenses. On November 24, 2025, we closed on the partial exercise of the underwriters' over-allotment option to purchase 68,989 shares of common stock for additional gross proceeds of approximately $0.6 million. See Note 1, "Organization and Nature of Operations," for additional information.

As of March 31, 2026 and December 31, 2025, we had total outstanding debt of $1.9 million and $2.0 million, respectively.

On April 12, 2024, we issued a promissory note to Motherlode for $1.0 million as part of an agreement to repurchase and retire Series Seed Preferred Shares previously issued to Motherlode. See Note 7, "Notes Payable," for additional information.

We have financing arrangements with Endurance Financial LLC ("Endurance Financial"), the manager of Endurance, and Endurance Opportunities. On March 1, 2025 and March 25, 2025, we issued commercial promissory notes to Endurance Financial in exchange for $1.0 million in total, that have a term of 18 months and 221 days, respectively, and on November 12, 2024, we issued a

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commercial promissory note to Endurance Opportunities in exchange for $0.3 million, that has a term 18 months, using certain account receivables as collateral for each of the commercial promissory notes (collectively, the "Endurance Notes"). The purpose of these facilities was to support our working capital position. On April 1, 2024 we entered into a Fixed Rate Loan Agreement with Endurance Opportunities for $1.0 million to refinance previously held long-term debt (the "Fixed Rate Loan Agreement"). On November 7, 2025, we paid off the outstanding principal and interest of the Fixed Rate Loan Agreement and the Endurance Notes, thereby satisfying these obligations in their entirety. See Note 6, "Related Party Debt," for additional information.

During the three months ended March 31, 2026, no new agreements were entered into between us and Endurance Opportunities. In 2025 and 2024 we entered into various participation and agency agreements with Endurance Opportunities pursuant to which Endurance provided us with the financing necessary to support our Network-as-a-Service product offerings under certain network service agreements (the "NSAs"). During the three months ended March 31, 2026 and fiscal 2025, we financed $0 million and $.3 million, respectively, from Endurance Opportunities, and as of March 31, 2026, the NSAs had a balance of $1.2 million. See Note 6, "Related Party Debt," for additional information.

On January 6, 2025, we entered into a simple agreement for future equity ("SAFE") agreement with an investor, pursuant to which we received an aggregate amount of $1.0 million. Following the closing of the IPO, the SAFE converted into 130,719 shares of common stock. See Note 10, "SAFE," for additional information.

***Cash Flow Analysis***

***Operating Activities***

Net cash used in operating activities was $2.5 million for the three months ended March 31, 2026, compared to $1.5 million for the three months ended March 31, 2025. The $1.0 million increase reflects a larger net loss driven primarily by elevated general and administrative expenses associated with operating as a publicly traded company, partially offset by changes in working capital.

***Investing Activities***

There were no cash flows from investing activities for the three months ended March 31, 2026 or 2025.

***Financing Activities***

Net cash used in financing activities was $0.1 million for the three months ended March 31, 2026, compared to net cash provided by financing activities of $1.9 million for the three months ended March 31, 2025. The change reflects the absence in 2026 of bridge financing transactions completed in the three months ended March 31, 2025.

**CRITICAL ACCOUNTING ESTIMATES**

The preparation of the financial statements in conformity with GAAP requires management to use judgment in making estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. The following accounting policies are based on, among other things, judgments and assumptions made by management that include inherent risks and uncertainties. Management's estimates are based on historical experience, the relevant information available at the end of each period, and their judgment. Although management believes the judgment applied in preparing estimates is reasonable based on circumstances and information known at the time, actual results could differ materially from these estimates under different assumptions or market conditions. See Note 2, "Summary of Significant Accounting Policies," for information about our significant accounting policies.

***Accounts Receivable, Unbilled Receivables, Network Financing Receivables and Allowance for Credit Losses***

The estimation of expected credit losses on the Company's accounts receivable, unbilled receivables, and network financing receivables requires significant management judgment and is therefore a critical accounting estimate.

Under the current expected credit loss ("CECL") impairment model, the Company applies different estimation methodologies depending on the nature of the receivable. For trade accounts receivable, the Company applies an aging schedule method, under which

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reserve percentages of 50%, 75%, and 100% are applied to invoices aged 91 to 120 days, 121 to 180 days, and over 180 days past due, respectively. Invoices aged 90 days or fewer are reserved at a de minimis rate based on historical collection experience. For unbilled receivables and network financing receivables, the Company applies a historical loss rate method. The Company has not experienced any credit losses on unbilled receivables or network financing receivables since inception; accordingly, the historical loss rate applied to those balances is zero and no allowance has been recorded against those balances as of March 31, 2026 or December 31, 2025.

Effective for the year ended December 31, 2025 and continuing for the three months ended March 31, 2026, the Company changed its estimation methodology for trade accounts receivable from a historical loss rate method to an aging schedule method, accounted for prospectively as a change in accounting estimate. The change reflects the growth of the trade accounts receivable portfolio and the availability of more granular invoice-level aging data, which now support a more precise estimate of expected credit losses. The change in methodology resulted in an increase in the allowance for credit losses, and a corresponding charge to bad debt expense, of approximately $429 thousand compared to what would have been recorded under the prior methodology. As of March 31, 2026 and December 31, 2025, the Company's allowance for credit losses related to trade accounts receivable was approximately $0.4 million and $0.3 million, respectively.

Significant judgments in determining the allowance include the selection of aging buckets and reserve percentages, the assessment of qualitative factors (including current economic conditions, customer-specific credit considerations, and the overall credit profile of our customer base), and the identification of macroeconomic factors that could affect future loss rates.

Changes in any of these inputs could result in a material change in the allowance for credit losses and the related provision in the period of change. See Note 2 — Summary of Significant Accounting Policies and Note 4 — Accounts Receivable for additional information.

***Revenue Recognition***

We generate revenue from the following sources: (1) network design and installation and (2) internet network services. In accordance with Accounting Standards Codification ("ASC") 606 "Revenue Recognition," there is significant judgment required in determining when to recognize revenue as performance obligations are satisfied. Recognition of network design and installation revenue occurs in line with incurred costs along set project milestones, with the most meaningful being delivery of provisioned network hardware to a client's property, installation of the fiber backbone, and installation of endpoint electronics. Recognition of internet network services revenue occurs monthly as services are delivered.

***Income Taxes***

We account for income taxes using an asset and liability approach. Our provision for income taxes requires management to make significant estimates and judgments regarding the determination of deferred tax assets and liabilities, as well as the likelihood of realizing the benefits of positions taken in our tax returns. We evaluate our deferred tax assets each reporting period to determine whether a valuation allowance is necessary based on the weight of available evidence, including expectations of future taxable income. Actual results could differ from these estimates, which could have a material effect on our financial condition and results of operations.

***Recent Accounting Pronouncements***

See Note 2, "Summary of Significant Accounting Policies," for information about recent accounting pronouncements.

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#### ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a smaller reporting company, we are not required to provide the information required by this item.

#### ITEM 4. CONTROLS AND PROCEDURES
**Disclosure Controls and Procedures**

Our disclosure controls and procedures are designed to ensure information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2026 pursuant to Rule 13a-15 under the Exchange Act. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of March 31, 2026, our disclosure controls and procedures were not effective, due to the existence of material weaknesses in our internal control over financial reporting that we have yet to fully remediate. Specifically, management identified the following material weaknesses:

*Entity-Level Controls and Risk Assessment —* We did not maintain sufficiently designed and documented entity-level controls, including a comprehensive risk assessment process, to identify and respond to risks of material misstatement across the organization. As a small company with limited accounting and finance personnel, we rely in part on third-party consultants for certain accounting, financial reporting, and related activities, and we did not maintain an appropriate control environment to evidence that access and review level controls were being performed over the work of such consultants or over key financial reporting processes generally.

*Revenue Recognition —* We did not maintain effective controls over the application of ASC 606 to ensure that revenue transactions were properly evaluated, recorded, and disclosed in accordance with GAAP.

We are actively engaged in the design and implementation of remediation measures to address each of the material weaknesses described above. Until such remediation measures are fully implemented and operating effectively for a sufficient period of time, these material weaknesses will continue to exist.

**Changes in Internal Control Over Financial Reporting**

Except as described below, there were no changes in our internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**Remediation Plan**

Management is actively implementing measures to remediate the material weaknesses described above and to strengthen our internal control environment. These measures include, but are not limited to:

*Entity-Level Controls and Risk Assessment —* We are enhancing our entity-level controls by formalizing a comprehensive risk assessment framework, establishing documented policies and procedures for identifying and evaluating risks of material misstatement, and implementing additional levels of management review over our financial reporting processes.

*Revenue Recognition —* We are strengthening our controls over revenue recognition by implementing additional reconciliation and analytical review procedures over contract revenue, unbilled revenue, and deferred revenue balances; enhancing management review of percentage-of-completion calculations and related journal entries; and evaluating the implementation of an enterprise resource planning system to improve the accuracy and reliability of our revenue recognition processes.

Remediation will not be considered complete until the enhanced controls have been implemented and have operated effectively for a sufficient period of time to enable management to conclude, through testing, that the controls are operating effectively.

Remediation will not occur until the plan is implemented and there has been appropriate time for us to conclude through testing that the control operates effectively.

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#### PART II - OTHER INFORMATION

#### ITEM 1. LEGAL PROCEEDINGS
From time to time, we may be party to or otherwise involved in various legal proceedings and claims arising in the ordinary course of business. Management does not believe that there is any pending or threatened proceeding against us, which if determined adversely, would have a material adverse effect on our business, results of operations, or financial condition.

**ITEM 5. OTHER INFORMATION**

On May 14, 2026, the Company entered into the $2.0 million May 2026 Term Loan with Endurance Opportunities, an existing related party lender controlled by certain officers and directors of the Company. The May 2026 Term Loan is payable in four equal consecutive quarterly installments of $500 thousand beginning with the quarter ending on June 30, 2026. In connection with the May 2026 Term Loan, the Company issued the May 2026 Note in favor of Endurance Opportunities with a principal amount of $500 thousand and agreed to issue three additional commercial promissory notes in favor of Endurance Opportunities, each with a principal amount of $500 thousand, upon receipt of each quarterly installment of $500 thousand from Endurance Opportunities. The May 2026 Term Loan and May 2026 Note include customary representations and warranties, covenants and agreements of the Company and Endurance Opportunities. The May 2026 Term Loan also provides for indemnification of Endurance Opportunities, its directors, officers and employees, from and against any and all liability, expense, or damage of any kind or nature and from any suits, claims or demands, including reasonable legal fees and expenses, arising out of the May 2026 Term Loan, except on account of the gross negligence or willful misconduct of Endurance Opportunities.

The May 2026 Note has a term of 36 months and bears interest at 15.5% per annum on the outstanding principal balance. Monthly payments of interest are required under the May 2026 Note with the outstanding principal amount of the May 2026 Note due on the maturity date. The Company intends to use the proceeds for general working capital and continued network deployment activities. The Company can, at any time, prepay the May 2026 Note in full or in part without penalty or premium. Under the May 2026 Note, if the Company fails to make any payments when due, including the payment due at maturity, the Company will pay a late fee of 10% of the monthly payment amount or outstanding balance at maturity. Upon the occurrence of an Event of Default (as defined in the May 2026 Note), the outstanding principal balance will accrue interest at a rate equal to the greater of 25.5% per annum or the maximum amount of interest permitted by applicable law, and Endurance Opportunities can declare the outstanding principal balance at the time of default, together with all accrued and unpaid interest at the default rate, and all other sums owed thereunder, immediately due and payable in full. Repayment of the May 2026 Note is secured by the Company's accounts receivable. Each subsequent commercial promissory note issued in accordance with the May 2026 Term Loan will have the same terms and conditions as the May 2026 Note.

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#### ITEM 6. EXHIBITS

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| | | | | |
|:---|:---|:---|:---|:---|
| | | | **Incorporated by Reference** | **Incorporated by Reference** |
| <br>**Exhibit Number** | <br>**Description** | <br>**Filing Date** | **Form** | **File No.** |
| 10.1 | [Business Loan Agreement, by and between Elauwit Connection, Inc. and Endurance Opportunities I LLC, dated as of May 14, 2026](tmb-20260331xex10d1.htm) | Filed herewith | - | - |
| 10.2 | [Form of Commercial Promissory Note, by and between Elauwit Connection, Inc. and Endurance Opportunities I LLC](tmb-20260331xex10d2.htm) | Filed herewith | - | - |
| 31.1 | [Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](tmb-20260331xex31d1.htm) | Filed herewith | - | - |
| 31.2 | [Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](tmb-20260331xex31d2.htm) | Filed herewith | - | - |
| 32 | [Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](tmb-20260331xex32.htm) | Furnished herewith | - | - |
| 101 | Materials from the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, formatted in Extensible Business Reporting Language (XBRL); (i) Unaudited Condensed Balance Sheets, (ii) Unaudited Condensed Statements of Operations, (iii) Unaudited Condensed Statements of Stockholders' Deficit, (iv) Unaudited Condensed Statements of Cash Flows, and (v) related Notes to Financial Statements. | Filed herewith | - | - |
| 104 | Cover Page Interactive Data File (included in Exhibit 101) | Filed herewith | - | - |

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[**Table of Contents**](#TOC)

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

---

| | | |
|:---|:---|:---|
| **ELAUWIT CONNECTION, INC.** | **ELAUWIT CONNECTION, INC.** |  |
| By: | */s/ Barry Rubens* | Date: May 14, 2026 |
|  | Barry Rubens |  |
|  | Chief Executive Officer  |  |
|  | (Principal Executive Officer) |  |
| By: | */s/ James Di Bartolo* | Date: May 14, 2026 |
|  | James Di Bartolo |  |
|  | Chief Financial Officer  |  |
|  | (Principal Financial Officer) |  |

---

## Exhibit 10.1

**Exhibit 10.1**

**BUSINESS LOAN AGREEMENT**

This BUSINESS LOAN AGREEMENT ("Agreement") is made this 14<sup>th</sup> day of May, 2026 (the "Effective Date"), by and between Elauwit Connection, Inc. (the "Borrower"), a Delaware corporation with an address of 1520 Locust Street, Suite 901, Philadelphia, PA 19102, and Endurance Opportunities I LLC, a Wyoming limited liability company with an address of 1621 Central Avenue, Cheyenne, WY 82001 (the "Lender").

**BACKGROUND**

Borrower desires to borrow from Lender, and Lender, subject to the terms and conditions set forth herein, is prepared to lend Borrower the sum of Two Million Dollars and 00/100 Cents **($2,000,000)** (the "Loan"), which Loan shall be secured by the various documents and instruments set forth herein.

As a condition and inducement to Lender to make the Loan, and as more particularly set forth in this Agreement, Borrower has agreed to provide Lender with a security interest in current notes receivable, and to deliver, or cause to be delivered, various documents and instruments, including a Note and Security Agreement. The execution and delivery of the documents and instruments by Borrower or other parties described herein are a condition of the Lender's obligation to extend the Loan.

**AGREEMENT**

NOW THEREFORE, with the foregoing Background incorporated herein as if fully set forth at length, in consideration of the premises, and of the mutual promises and undertakings of the parties set forth herein, and with the intention of being legally bound hereby, the parties hereto agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>The Loan</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. <u>Loan Amount</u>. Subject to the terms and conditions of this Agreement, Lender hereby agrees to make a term loan to Borrower in the principal amount of Two Million and 00/100 Dollars **($2,000,000)** in four equal disbursements of Five Hundred Thousand and 00/100 Dollars **($500,000**) each on or before June 30, 2026, September 30, 2026, December 31, 2026 and March 31, 2027 for a period of Thirty-Six (36) months commencing on the date of the first disbursement, the proceeds of which shall be used to finance its business operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. <u>Security and Collateral</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;i. The Borrower's obligation to repay the Loan and any other sums loaned to the Borrower by the Lender hereunder is evidenced by the Borrower's Commercial Promissory Note dated this date in the principal amount of Two Million Dollars and 00/100 Cents **($2,000,000)** ("Note"), providing for the payment of principal, together with interest thereon at the rate set forth therein, in such installments, at such times, and according to such further terms as set forth 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;ii. As security for the Note and all of the Borrower's obligations thereunder and hereunder, the Borrower shall execute and deliver to the Lender or cause to be executed and delivered to the Lender, as the case may be, such security agreements, financing statements, continuation statements and other security instruments as the Lender shall require in order to create a valid and perfected security interest in the collateral more particularly described in the Security

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Agreement between the parties (such documents, together with the Note, are hereinafter collectively referred to as the "Loan Documents"). Such documents shall be in form and substance satisfactory to Lender, and any filing and recording fees with respect thereto shall be paid by the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. <u>Interest Rate</u>. From the Effective Date until paid in full, the outstanding principal balance of the Loan shall bear interest at a rate of Fifteen and One-Half Percent **(15.5%)** per annum, as provided in the Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. <u>Default Rate of Interest</u>. Upon and after the occurrence of an Event of Default, as defined in Section 5(a) hereinbelow, at the election of Lender, all interest accruing in respect of any loan or other obligation of Borrower under this Agreement shall be increased, as provided in the Note, by a per annum percentage equal to the lesser of (i) Ten Percent (10%) per annum; or (ii) the maximum amount of interest permitted by applicable law to be contracted for, charged or received (the "Default Rate"). The Default Rate will be charged upon the outstanding balance due upon the occurrence of an Event of Default and may be calculated retroactively, from the date of the occurrence of the Event of Default, upon the balance due.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. <u>Fees</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;i. <u>Origination Fee.</u> As compensation for the expenses of underwriting and evaluating the Loan, the Borrower shall pay to the Lender a fee of Twenty Thousand Dollars and 00/100 Cents ($20,000) on the date hereof. Such fee shall be in addition to the interest and any and all other amounts which the Borrower is required to pay under the Loan Documents in connection with the Loan.

&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>Lender's Expenses</u>. On the Effective Date, Borrower shall pay all of Lender's expenses in connection with the Loan, including the legal fees of Lender's counsel and any filings costs or fees incurred to create a valid and perfected 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;iii. <u>Late Fees</u>. If Lender does not receive the entire amount of any payment required under this Loan Agreement or any other Loan Documents within five (5) days of its due date, Borrowers shall, to the extent permitted by law, pay a late charge equal to ten percent (10.0%) of the overdue payment. Any such late charge assessed is immediately due and payable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. <u>Disbursement</u>. Acceptance of the proceeds of the loan by Borrowers shall be deemed a representation and warranty by Borrower to Lender that all conditions precedent to the making of the Loan specified in Section 4 of this Agreement are satisfied.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. <u>Payment</u>. Borrower shall make quarterly installments of interest due under the Note to the Lender by ACH or wire transfer of immediately available funds denominated in United States dollars.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Representations and Warranties</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. <u>Existence.</u> The Borrower is a corporation organized in the State of Delaware and is authorized to do business in each jurisdiction in which it operates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. <u>No Governmental Approval Required.</u> No consent, approval or other authorization of or by any court, administrative agency, or other governmental authority is required in connection with the Borrower's execution and delivery of or compliance with any of the Loan Documents or any other document or instrument relating to the Loan executed by the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. <u>Conflict; Breach</u>. The Borrower's execution and delivery of and compliance with the Loan Documents or any other documents and instruments relating to the Loan will not conflict with or result in a breach of any applicable law, judgment, order, writ, injunction, decree, rule or regulation of any court, administrative agency or other governmental authority, or of any agreement or other document or instrument to which the Borrower is a party or by which it is bound, and such action by the Borrower will not result in the creation or imposition of any lien, charge or encumbrance upon any property of the Borrower in favor of anyone other than the Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. <u>Litigation</u>. There is no action, suit or proceeding pending or, to the knowledge of the Borrower, threatened against or affecting the Borrower before or by any court, administrative agency or other governmental authority, or which brings into question the validity of the transactions contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. <u>Financial Statements</u>. The financial statements of the Borrower, copies of which have been furnished to the Lender, have been prepared in accordance with generally accepted accounting principles consistently applied and fairly and accurately reflect the financial condition of the Borrower as of and for the period shown therein, and there has been no material adverse change in the financial condition or business of the Borrower since the date thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. <u>Tax Returns</u>. Any and all federal, state and local income tax returns required to have been filed by the Borrower as of the date hereof have been filed, and all taxes reflected upon any such tax returns, all past due taxes, interest and penalties and all estimated payments required to be paid have been paid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. <u>Title to Personal Property</u>. All personal property with respect to which the Borrower has granted to the Lender a security interest pursuant to any of the Loan Documents is otherwise owned by the Borrower free and clear of all liens, encumbrances, and security interests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h. <u>Bankruptcy; Insolvency</u>. The Borrower has not applied for nor consented to the appointment of a receiver, trustee or liquidator of itself or any of its property, admitted in writing its inability to pay its debts as they mature, made a general assignment for the benefit of creditors, been adjudicated as bankrupt or insolvent or filed a voluntary petition in Bankruptcy, or a petition or an answer seeking reorganization or an arrangement with creditors or to take advantage of any Bankruptcy, reorganization, insolvency, readjustments of debt, dissolution or liquidation law or statute, or an answer admitting the material allegations of a petition filed against it in any proceeding under any such law, and

------

no action has been taken by it for the purpose of effecting any of the foregoing. No order, judgment or decree has been entered by any court of competent jurisdiction approving a petition seeking reorganization of the Borrower or all or a substantial part of the assets of the Borrower, or appointing a receiver, sequestrator, trustee or liquidator of it or any of its property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. <u>ERISA</u>. Borrower does not maintain nor is it a party to (or ever maintained or was a party to) any "Employee Welfare Benefit Plan", as defined in Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or any other written, unwritten, formal or informal plan or agreement involving direct or indirect compensation other than workers' compensation, unemployment compensation and other government programs, under which Borrower has any present or future obligation or liability. Borrower does not maintain nor is it a party to (or ever maintained or was a party to) any "Employee Pension Benefit Plan", as defined in Section 3(2) of ERISA, and the Corporation does not contribute to any "Multiemployer Plan" as defined in Section 3(37) of ERISA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Covenants</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. <u>Financial Statements</u>. The Borrower shall deliver, or cause to be delivered to Lender annually, within ninety (90) days after the end of each fiscal year, the prior year's financial statement for each Borrower. Borrower must deliver to Lender along with the financial statement, copies of all bank and/or brokerage statements to verify liquidity, if applicable, and copies of all current eligible customer contracts in which Lender has a security interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. <u>Tax Returns</u>. The Borrower shall deliver, or cause to be delivered to Lender annually, on or before July 15 of each year, the prior year's signed income tax returns and all schedules thereto for each Borrower, each of which must be prepared by a certified public accountant. Borrower shall also cause Guarantors to deliver to Lender their accountant prepared tax returns annually on or before July 15 of each year, the prior year's signed federal and state income tax returns and all schedules thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. <u>Principal Office</u>. The Borrower shall maintain its principal office and/or the office where it keeps its books and records in the same location unless it gives the Lender prior written notice of any proposed change in location thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. <u>Books and Records</u>. The Borrower shall keep complete and accurate books and records in accordance with generally accepted accounting principles consistently applied. The Borrower shall furnish to the Lender all such written information relating to its affairs as may be requested by the Lender from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. <u>Audit</u>. The Lender shall have the right at any time but no more than once annually and from time to time upon prior written notice to Borrower to audit the books and records of the Borrower and the Borrower shall be obligated to make available for any such audit all books, records and other information that the Lender may request for such purpose and to cooperate fully with the Lender in connection therewith. The cost of such audit shall be paid for by Borrower.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. <u>Changed Circumstances</u>. The Borrower shall promptly notify the Lender of any change in any fact or circumstance represented or warranted by the Borrower herein and in any other documents furnished to the Lender in connection with this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. <u>Lender's Costs</u>. The Borrower shall pay or reimburse the Lender for all reasonable out-of-pocket costs and expenses (including but not limited to reasonable out-of-pocket attorney's fees) incurred by the Lender in connection with the preparation, review, modification and enforcement of the Loan Documents and the administration and collection of the Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h. <u>Maintenance of Existence; Single Purpose</u>. Borrower shall not make or permit any substantial change in, or cease in whole or in part, its present business, or engage in any other activities apart from its present business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Conditions Precedent</u>. The obligation of the Lender to make the Loan to the Borrower is subject to receipt by Lender of the following documents and the satisfaction of the following conditions precedent:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. <u>Representations and Warranties</u>. Each and all of the representations and warranties set forth in this Agreement and any other Loan Documents shall be true and correct in all respects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. <u>No Default</u>. No Default or Event of Default exists or shall have occurred and be continuing on the date such Loan is made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. <u>Fees, Charges and Premiums</u>. The Borrower shall cause to have paid all premiums on insurance policies and bonds, all filing or recording costs assessed against the Borrower, and origination fee of the Lender, and the legal fees and disbursements of the Lender's counsel in connection with the Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. <u>Delivery of Loan Documents</u>. The Loan Documents shall have been duly executed and delivered to the Lender and, where applicable, shall have been recorded or filed in the appropriate public office.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. <u>Delivery of Other Documents</u>. The following documents shall have been delivered by or on behalf of the Borrower to the Lender, and shall be true and correct in all material respects on and as of the date the Loan is made:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. <u>Organizational Documents</u>. Certificates of recent date of the appropriate authority or official from Borrower's state of incorporation or organization certifying as to the good standing and corporate or other entity, as applicable, existence of Borrower; a copy of Borrower's articles of formation or certificate of incorporation (or equivalent document), as applicable; and a certification by a duly authorized officer of the Borrower that such documents are true, correct, and complete.

&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>By-laws and Corporate Authorizations</u>. Copies of the bylaws, limited liability company agreement, or similar governing documents of Borrower together with all authorizing resolutions and evidence of corporate or other entity, as applicable, action taken by the Borrower to authorize the execution, delivery and performance by Borrower of the Loan Documents to which it is a party and the consummation

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by Borrower of the transactions contemplated hereby, certified as true, correct, and complete by a duly authorized officer of 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;iii. <u>Incumbency Certificate</u>. Certificate of incumbency of Borrower containing, and attesting to the genuineness of, the signatures of those officers authorized to act on behalf of the Borrower in connection with the Loan Documents to which Borrower is a party and the consummation by the Borrower of the transactions contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Defaults</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. <u>Event of Default</u>. The occurrence of any one or more of the following events shall, at the sole option of the Lender, constitute an Event of Default 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;i. Borrower shall fail to make any payment of principal, interest, costs and/or fees due to Lender under the Note or under any of the other Loan Documents when the same is due and payable, whether at maturity or by acceleration 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;ii. Except as otherwise specifically provided for in this Agreement, the Borrower shall fail to observe or perform any of the covenants or agreements on its part to be observed and performed under this Agreement or under any of the other Loan Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. Any representation or warranty by Borrower under this Agreement or under any of the other Loan Documents shall be untrue in any material respect when made or shall become untrue in any material respect during the term of the Loan;

&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. Any Event of Default shall occur under any of the other Loan Documents or under the terms of any other document evidencing or securing any other loan facilities made by Lender to the Borrower or an affiliate of 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;v. Any event of default by Borrower under any loan, extension of credit, security agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower's property or ability to repay this Loan, or perform its respective obligations under this Agreement or any related document;

&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. There shall be a material adverse change in the financial condition of the Borrower as determined by the Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vii. The Borrower or any Guarantor shall apply for or consent to the appointment of a receiver, trustee or liquidator of itself or himself or any of its or his property, admit in writing its or his inability to pay its or his debts as they mature, make a general assignment for the benefit of creditors, be adjudicated a Bankrupt, insolvent or file a voluntary petition in Bankruptcy, or a petition or an answer seeking reorganization or an arrangement with creditors or to take advantage of any Bankruptcy reorganization, insolvency, readjustment of debt, dissolution or liquidation law or statute or an answer admitting the material allegations of a petition filed against it or him in any proceeding under any such law, or if action shall be taken by the Borrower for the purpose of effecting any of the foregoing;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;viii. The dissolution, liquidation, or transfer or disposition (by operation of law or otherwise) for less than adequate consideration of a substantial portion of the assets 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;ix. Without the prior written express consent of Lender, the direct or indirect transfer (by operation of law or otherwise) of a substantial part of the assets of Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. <u>Acceleration and Remedies</u>. Upon the occurrence of an Event of Default hereunder, in addition to any other rights or remedies available to it hereunder or under any other Loan Document or at law or in equity, and without notice, the Lender may exercise any or all of the following rights and remedies as it may deem necessary or appropriate:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. declare the outstanding principal balance of the Loan at the time of default, together with all accrued and unpaid interest thereon and all other sums due hereunder or under any of the other Loan Documents, to be immediately due and payable in full; and/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;ii. set off all property of the Borrower now or hereafter at any time in its possession in any capacity whatsoever including but not limited to, any balance or share of any deposit, trust or agency account, as to all of which property the Borrower hereby grants the Lender a lien and security 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;iii. Should an event described in Section 5(a)(vii) of this Business Loan Agreement occur, then Lender is entitled to pre-confirmation and post-confirmation interest, at the Default Rate, on the Loan arrearages and other charges notwithstanding the entry of a Judgment. Said interest on the Loan arrearages and other charges will be considered an element of an allowed secured claim provided for by any plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. <u>Remedies Cumulative, etc</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;i. <u>No Waiver by Conduct; Remedies Cumulative</u>. No right or remedy conferred upon or reserved to the Lender under any of the Loan Documents, or with respect to any guaranty of payment of the Loan or of performance of any of the Borrower's obligations under any of the Loan Documents or any collateral securing the payment of the Loan under any of the Loan Documents (collectively the "Collateral"), now or hereafter existing at law or in equity or by statute or other legislative enactment, is intended to be or shall be deemed exclusive of any other such right or remedy, and each and every such right or remedy shall be cumulative and concurrent, and shall be in addition to every other such right or remedy, and may be pursued singly, concurrently, successively or otherwise, at the sole discretion of the Lender, and shall not be exhausted by any one exercise thereof but may be exercised as often as occasion therefore shall occur. No act of the Lender shall be deemed or construed as an election to proceed under any one such right or remedy to the exclusion of any other such right or remedy; furthermore, each such right or remedy of the Lender shall be separate distinct and cumulative and none shall be given effect to the exclusion of any other. The failure to exercise or delay in exercising any such right or remedy, or the failure to insist upon strict performance of any term of any of the Loan Documents, shall not be construed as a waiver or release of the same, or of any Event of Default thereunder, or of any obligation or liability of the Borrower thereunder. Nothing herein, however, shall

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be construed to prevent the Lender from waiving any condition, obligation or default it should so elect. In the event of such election by the Lender, any waiver, in order to be effective, must be in writing and signed by the Lender, and any such waiver shall be strictly limited in its effect to the condition, obligation or default specified therein and shall not extend to any subsequent condition, obligation or default or impair any right of the Lender 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;ii. <u>Judgment/Non-merger</u>. The recovery of any judgment by the Lender and/or the levy of execution under any judgment shall not affect in any manner or to any extent, liens or other security interests in any Collateral, or any rights, remedies or powers of the Lender under any of the Loan Documents or with respect to any Collateral, but such liens and security interests, and such rights, remedies and powers of the Lender shall continue unimpaired as before. Further, the entry of any judgment by the Lender shall not affect in any way the interest rate payable under any of the Loan Documents on any amounts due to the Lender, but interest shall continue to accrue on such amounts at the Default Rate (as hereinafter defined).

&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>Waiver of Notice</u>. The Borrower hereby waives presentment, demand, notice of nonpayment protest notice of protest, or other notice of dishonor, and any and all other notices in connection with any default in the payment of, or any enforcement of the payment of, the Loan. To the extent permitted by law, Borrower waives the right to any stay of execution and the benefit of all exemption laws now or hereafter in effect. The Borrower further waives and releases all procedural errors, defects and imperfections in any proceedings instituted by the Lender under the terms of any of the Loan Documents or with respect to any Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. <u>Default Rate</u>. Following the occurrence of any Event of Default and continuing either until such Event of Default is cured or until the principal sum then outstanding under the Note and all other sums payable under the Loan Documents are paid in full, the principal sum outstanding under the Note shall bear interest at the Default Rate (as defined in the Note), and shall be secured by the Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. <u>Costs and Expenses</u>. Following the occurrence of any Event of Default, the Borrower shall pay upon demand all costs and expenses (including all amounts paid to attorneys, accountants, appraisers, real estate brokers and other advisors employed by the Lender), incurred by the Lender in the exercise of any of its rights, remedies or powers under any of the Loan Documents or with respect to any Collateral with respect to such Event of Default and any amount thereof not paid promptly following demand therefor together with interest thereon at the Default Rate from the date of such demand, shall become part of the Loan and shall be secured by the Collateral. In connection with and as part of the foregoing, in the event that any of the Loan Documents is placed in the hands of an attorney for the collection of any sum payable thereunder, the Borrower agrees to pay reasonable attorneys' fees for the collection of the amount being claimed under such Loan Document, as well as all costs, disbursements and allowances provided by law, the payment of which sums shall be secured by the Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. 8

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. <u>Maximum Rate of Interest on Loan</u>. Notwithstanding anything to the contrary contained herein or in any other document executed in connection with the Loan, the effective rate of interest on the Loan shall not exceed the maximum effective rate of interest permitted by applicable law or regulation. The Borrower hereby agrees to give the Lender written notice in the event that Borrower has actual knowledge that an interest payment made to the Lender with respect to this Loan will cause the total interest payments collected in any one year to be usurious under applicable law, and the Lender hereby agrees not to collect knowingly any interest from the Borrower in the form of fees or otherwise which will render this Loan usurious. In the event that such interest would be usurious in the Lender's opinion, the Lender reserves the right to reduce the interest payable by the Borrower or refund any such interest to Borrower. This provision shall survive Closing hereunder and the repayment of the Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. <u>Indemnity</u>. The Borrower, for itself and all those claiming under or through it, agrees to protect, indemnify, defend and hold harmless the Lender, its directors, officers and employees, from and against any and all liability, expense, or damage of any kind or nature and from any suits, claims or demands, including reasonable legal fees and expenses, arising out of this Agreement or in connection herewith except on account of the gross negligence or willful misconduct of the Lender. This obligation specifically shall survive the repayment of the Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. <u>Limitation of Lender's Liability</u>. The rights and benefits of this Agreement shall not inure to the benefit of any third party, except as provided in section 6(d) hereinbelow. Notwithstanding anything to the contrary contained in this Agreement or in any of the other Loan Documents, or any conduct or course of conduct by the Borrower or the Lender or their respective affiliates, agents or employees, neither this Agreement nor any Loan Documents shall be construed as creating any rights, claims or causes of action against the Lender in favor of any other person or entity other than the Borrower. Lender undertakes no responsibility to review or inform Borrower of any matter in connection with any phase of Borrower's business or operations. Borrower agrees that Lender shall not have liability to Borrower (whether sounding in tort, contract or otherwise) for losses suffered in connection with, arising out of, or in any way related to, the transactions contemplated and the relationship established by the Loan Documents, or any act, omission, or event occurring in connection therewith or otherwise, unless it is determined in a final non-appealable judgment by a court of competent jurisdiction that such losses resulted from the gross negligence or willful misconduct of the party from which recovery is sought.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. <u>Waiver of Consequential Damages.</u> Lender shall have no liability with respect to, and Borrower hereby waives, releases, and agrees not to sue for, any special, indirect, or consequential damages suffered by Borrower in connection with, arising out of, or in any way related to the Loan Documents or the transactions contemplated thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. <u>Successors and Assigns</u>. This Agreement inures to the benefit of and binds the parties hereto and their respective successors and assigns, and the words "Borrower" and "Lender" wherever occurring herein shall be deemed to include such respective successors and assigns. However, the Borrower shall not involuntarily, or by operation of law, assign or transfer any interest which it may have under this Agreement, or any part thereof, without

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the prior written approval of the Lender, except as otherwise expressly permitted in this Agreement. The Lender may assign or otherwise transfer the Loan and any or all of the Loan Documents to any other person, and such other person shall thereupon become vested with all of the benefits in respect thereof granted to the Lender herein or otherwise. The Lender shall have the right to sell participations in the Loan to any other persons or entities without the consent of or notice to the Borrower. Without the consent of or notice to the Borrower, the Lender may disclose to any prospective purchaser of any securities issued or to be issued by the Lender, and any prospective or actual purchaser of any participation or other interest in the Loan or any other loans made by the Lender to the Borrower, any financial or other information, data or material in the Lender's possession relating to the Borrower or the Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. <u>Counterparts</u>. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Agreement by signing any such counterpart.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. <u>Captions</u>. The captions or headings of the paragraphs of this Agreement are for convenience only and shall not control or affect the meaning or construction of any of the terms or provisions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h. <u>Time of the Essence</u>. All dates and time for the performance of the Borrower's obligations set forth herein shall be deemed to be of the essence of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. <u>Broker's and Finder's Fees</u>. The Borrower represents and warrants that it has not dealt with or through any broker or other intermediary in connection with the Loan, and agrees to indemnify, defend and hold the Lender harmless from and against any loss, liability or damage (including attorneys' fees and expenses) arising from any claim for a brokerage fee or finder's fee in connection with the Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j. <u>Publicity</u>. The Lender may at its option and in such manner as it may determine, announce and publicize the source of the financing for the Loan to Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;k. <u>Integration and Severability</u>. The Loan Documents embody the entire agreement and understanding among Borrower and Lender, and supersede all prior agreements and understandings, relating to the subject matter hereof. In the event that for any reason one or more of the provisions of this Agreement or their application to any person or circumstance shall be held to be invalid, illegal or unenforceable in any respect or to any extent, such provisions shall nevertheless remain valid, legal and enforceable in all other respects and to such extent as may be permissible. In addition, any such invalidity, illegality or unenforceability shall not affect any other provision hereof, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;l. <u>Definitions; Number and Gender</u>. In the event the Borrower consists of more than one person or entity, the obligations and liabilities hereunder of each of such persons and entities shall be joint and several, and the word "Borrower" shall mean all or some or any of them. For purposes of this Agreement, the singular shall be deemed to include the plural and the neuter shall be deemed to include the masculine and feminine, as the context may require. If any provision of this Agreement refers to any action to be taken by any person, or which such person is prohibited from taking, such provision shall be applicable whether

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such action is taken directly or indirectly by such person, whether or not expressly specified in such provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;m. <u>Independence of Covenants</u>. All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any such covenant, the fact that it would be permitted by an exception to, or would be otherwise within the limitations of, another covenant shall not avoid the occurrence of an Event of Default if such action is taken or such condition exists.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;n. <u>Governing Law</u>. This Agreement is a contract made under, and shall be governed by and construed in accordance with, the law of the Commonwealth of Pennsylvania, substantive and procedural, applicable to contracts made and to be performed entirely within such State and without giving effect to choice of law principles of such State.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o. <u>Notices</u>. All notices required or desired to be given to either of the parties hereunder shall be in writing and shall be deemed to have been sufficiently given for all purposes when (i) presented personally to such party, (ii) sent by certified or registered mail, return receipt requested, to such party at its address set forth below, or (iii) sent by email to such party at its electronic mail address set forth below:

Borrower:

**ELAUWIT CONNECTION, INC.**

**c/o Barry Rubens, CEO, ###**

**1520 Locust Street, Suite 901**

**Philadelphia PA 19102**

Lender:

**ENDURANCE OPPORTUNITIES I LLC**

**c/o Stephanie Hawkins, Controller, ###**

**1520 Locust Street, Suite 901**

**Philadelphia, PA 19102**

Such notice shall be deemed to be given when received if delivered personally, or two (2) days after the date mailed if sent by certified or registered mail, return receipt requested, or at the time shown in a delivery confirmation report generated by the sender's email system which indicates that delivery of the email to the recipient's email address has been completed if sent by email. Any notice of any change in such address shall also be given in the manner set forth above. Whenever the giving of notice is required, the giving of such notice may be waived in writing by the party entitled to receive such notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;p. <u>Amendments; Consents and Waivers; Authentication</u>. No amendment or modification of any Loan Documents, or any other document or agreement described in or related to this Agreement, or consent to or waiver of any Event of Default, or consent to or waiver of the application of any covenant or representation set forth in any of the Loan Documents, or any other document or agreement described in or related to this Agreement, or any release

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of Lender's security interest in any Collateral, shall be effective unless it has been agreed to by Lender and memorialized in a written agreement 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;i. specifically states that it is intended to amend or modify specific Loan Documents, or any other document or agreement described in or related to this Agreement, or waive any Event of Default or the application of any covenant or representation of any terms of specific Loan Documents, or any other document or agreement described in or related to this Agreement, or is intended to release Lender's security interest in specific Collateral; 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. is executed by an authorized employee or officer of both parties, or by an authorized employee or officer of Lender with respect to a consent or waiver. The terms of an amendment, consent or waiver memorialized in any written agreement shall be effective only to the extent, and in the specific instance, and for the limited purpose to which Lender has agreed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;q. <u>Waiver of Jury Trial; Consent to Jurisdiction and Venue; Consent to Service of Process</u>. **THE BORROWER WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, OR RELATED TO, THE SUBJECT MATTER OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS RELATED TO ANY OF THE LOAN DOCUMENTS. THIS WAIVER IS KNOWINGLY, INTENTIONALLY AND VOLUNTARILY MADE BY BORROWER AND BORROWER ACKNOWLEDGES THAT NEITHER LENDER NOR ANY PERSON ACTING ON BEHALF THEREOF HAS OR HAVE MADE ANY REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT.** 

**THE BORROWER FURTHER ACKNOWLEDGES THAT BORROWER HAS BEEN REPRESENTED (OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED BY BORROWER'S OWN FREE WILL, AND THAT BORROWER HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL. THE BORROWER AGREES THAT THIS IS A BUSINESS LOAN AND THAT THE OBLIGATIONS EVIDENCED BY THIS AGREEMENT ARE EXEMPTED TRANSACTIONS UNDER THE TRUTH-IN-LENDING ACT, 15 U.S.C. SECTION 1601, ET SEQ. THE BORROWER FURTHER ACKNOWLEDGES THAT BORROWER HAS READ AND UNDERSTANDS THE MEANING OF THIS WAIVER PROVISION. BORROWER HEREBY CONSENTS TO THE JURISDICTION OF THE PENNSYLVANIA COURT OF COMMON PLEAS, PHILADELPHIA COUNTY OR THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF EASTERN DISTRICT OF PENNSYLVANIA FOR ANY PROCEEDING IN CONNECTION HEREWITH.**

**IF LENDER BRINGS ANY ACTION OR SUIT TO ENFORCE ANY OR ALL OF BORROWER'S OBLIGATIONS UNDER THE LOAN DOCUMENTS, SERVICE OF PROCESS MAY BE MADE UPON THE BORROWER BY MAILING A COPY OF THE SUMMONS BY PREPAID CERTIFIED FIRST CLASS MAIL, RETURN**

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**RECEIPT REQUESTED, TO THE BORROWER, AND IN SUCH EVENT BORROWER HEREBY WAIVES ANY AND ALL OBJECTIONS TO SUFFICIENCY OF SERVICE OF PROCESS. THE FOREGOING SHALL BE DEEMED INDEPENDENT COVENANTS.**

Borrower further warrants and represents that it has a received a copy of all the Loan Documents, as that term is defined herein.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the parties have executed this Business Loan Agreement on the date first above set forth.

---

| | |
|:---|:---|
| **BORROWER:**  | **BORROWER:**  |
| ELAUWIT CONNECTION, INC. | ELAUWIT CONNECTION, INC. |
| A Delaware corporation | A Delaware corporation |
| By: | /s/ Barry Rubens |
| Name: Barry Rubens | Name: Barry Rubens |
| Title: CEO | Title: CEO |
| **LENDER:** | **LENDER:** |
| ENDURANCE OPPORTUNITIES I, LLC, | ENDURANCE OPPORTUNITIES I, LLC, |
| a Wyoming limited liability company | a Wyoming limited liability company |
| By: | /s/ Glenn Josephs |
| Name: Glenn Josephs | Name: Glenn Josephs |
| Title: Authorized Member of Endurance Financial, | Title: Authorized Member of Endurance Financial, |
| LLC, Manager of Endurance Opportunities I, LLC | LLC, Manager of Endurance Opportunities I, LLC |

---

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## Exhibit 10.2

**Exhibit 10.2**

**FORM OF COMMERCIAL PROMISSORY NOTE**

---

| | |
|:---|:---|
| **$500000.00** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**[__]** |

---

**FOR VALUE RECEIVED,** the undersigned, **ELAUWIT CONNECTION, INC.**, ("Borrower"), with an address of 1520 Locust Street, Suite 901, Philadelphia, PA 19102, promises to pay to the order of **ENDURANCE OPPORTUNITIES I LLC** ("Lender") at its offices at 1621 Central Avenue, Cheyenne, WY 82001 or at such other place as the Lender may direct, the sum of Five Hundred Thousand and 00/100 Dollars ($500,000.00), together with interest on the outstanding principal balance as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<u>Definitions</u>. In this Commercial Promissory Note ("Note"), all words and terms not defined herein shall have the respective meanings and be construed herein as provided in the Business Loan Agreement of even date hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.<u>Loan Amount</u>. This Note evidences a commercial loan by Lender to Borrower in the amount of Five Hundred Thousand Dollars ($500,000.00) (the "Loan").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.<u>Term of Loan</u>. This Loan shall be for a term of Thirty-Six (36) months ("Term") commencing as of the date of this Note. The Note shall mature on the 36-month anniversary of the date of this Note ("Maturity Date"), unless extended at the Lender's sole option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.<u>Interest Rate.</u> The Loan shall bear interest at the fixed rate of fifteen and one-half percent (15.5%) per annum. The annual interest rate shall be calculated on a 360-day year basis; that is, by applying the ratio of the annual interest rate over a year of 360 days multiplied by the outstanding principal balance, multiplied by the actual number of days the principal is outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.<u>Payments.</u> Borrower shall make monthly payments of interest only on the outstanding principal balance of the Loan, payable on the first day of each month. On the Maturity Date, the entire outstanding principal amount of the Loan shall be due and payable, together with all other unpaid interest, fees, penalties, costs and expenses due under the Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.<u>Prepayment/Note Not Assumable</u>. Borrower shall have the right to prepay this Note in full or in part at any time, without penalty or premium. This Note is not assumable by any third-party and shall remain the obligation of the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.<u>Late Fees.</u> Borrower acknowledges that the failure of Borrower to make any payment of principal or interest, including the payment due at maturity, when the same is due and payable will cause Lender to incur additional expense in servicing the indebtedness evidenced by this Note and will deprive the Lender of the use of the monies due to Lender, the precise measure of which expenses and loss is not susceptible to exact determination. Accordingly, if Lender does not receive the entire amount of any payment required under this Note within five (5) days of its due date, including the payment at Maturity, the Borrower shall pay a late fee of ten percent (10%) of the monthly payment amount or outstanding balance at Maturity, which Borrower acknowledges is a reasonable basis on which to compensate Lender for additional expense incident to such delinquency. This shall not be construed to obligate Lender to accept any overdue installment nor to limit Lender's rights and remedies as hereinafter set forth.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.<u>Capitalization of all Charges</u>. Lender will capitalize or add to the principal balance all amounts due Lender when billed or charged, including, without limitation, past due amounts, fees and interest, legal fees and late fees. Capitalization does not cure a default.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.<u>Collateral</u>. Repayment of this Note is secured by, among other things, the Security Agreement of the Borrower granting Lender a security interest in and to accounts receivable as more particularly described therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.<u>Default</u>. Borrower shall be in default under this Note upon the occurrence of any of the following events (each, an "Event of Default"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Borrower shall fail to make any payment when due of principal, interest, costs and/or fees when due to Lender under the Note or under any of the other Loan Documents when due, whether at maturity or by acceleration 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.Except as otherwise specifically provided for in the Loan Agreement, the Borrower shall fail to observe or perform any of the covenants or agreements on its part to be observed and performed under the Loan Agreement, or under any of the other Loan Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.Any representation or warranty by Borrower under the Loan Agreement, or under any of the other Loan Documents shall be untrue in any material respect when made or shall become untrue in any material respect during the term of the Loan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.Any Event of Default shall occur under any of the other Loan Documents or under the terms of any other document evidencing or securing any other loan facilities made by Lender to the Borrower or an affiliate of 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;e.There shall be a material adverse change in the financial condition of the Borrower as determined by the Lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f.The Borrower shall apply for or consent to the appointment of a receiver, trustee or liquidator of itself or any of its property, admit in writing its inability to pay its debts as they mature, make a general assignment for the benefit of creditors, be adjudicated as bankrupt, insolvent or file a voluntary petition in Bankruptcy, or a petition or an answer seeking reorganization or an arrangement with creditors or to take advantage of any Bankruptcy reorganization, insolvency, readjustment of debt, dissolution or liquidation law or statute or an answer admitting the material allegations of a petition filed against it in any proceeding under any such law, or if action shall be taken by the Borrower for the purpose of effecting 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;g.Any order, judgment or decree shall be entered by any court of competent jurisdiction, approving a Petition seeking reorganization of the Borrower, any member of the Borrower, or all or a substantial part of the assets of the Borrower, or appointing a receiver, sequestrator, trustee or liquidator of the Borrower, any member of the Borrower, or any of its property, and such order, judgment or decree shall continue unstayed and in effect for any period of sixty (60) days; 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;h.The dissolution, liquidation, or transfer or disposition (by operation of law or otherwise) for less than adequate consideration of a substantial portion of the assets 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;i.Borrower, any guarantor, or any entity that is controlled by any guarantor (a "Related Entity") shall have defaulted in any respect under any note, mortgage, loan agreement or collateral

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documents executed by Borrower or any guarantor or Related Entity under or in connection with any loan transaction involving Borrower or such guarantor or Related Entity and Lender other than the Loan which is the subject of this Agreement, whether such other loan transaction(s) or any of them have been entered into prior to the date hereof or is entered into after the date hereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j.If the introduction of, or any change in any applicable law, treaty, rule, regulation or guideline or in the interpretation or administration thereof by any governmental authority or any central bank or other fiscal, monetary or other authority having jurisdiction over Lender (whether or not having the force of law) shall (A) impose, modify or deem applicable any assessment, reserve, special deposit or similar requirement against assets held by, or deposits in or for the account of or loans by, or any other acquisition of funds or disbursements by Lender; (B) subject Lender or the Loan to any tax or change the basis of taxation payments to Lender of principal or interest due from Borrower to Lender hereunder (other than a change in the taxation of the overall net income of Lender; or (C) impose on Lender any other condition regarding the Loan or Lender's funding thereof, and Lender shall determine (which determination shall be conclusive, absent any manifest error) that the result of the foregoing is to increase the cost to Lender of making or maintaining the Loan or to reduce the amount of principal or interest received by Lender hereunder, then Borrower shall pay to Lender, on demand, such additional amounts as Lender shall, from time to time, determine are sufficient to compensate and indemnify Lender from such increased cost or reduced amount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.<u>Default Rate.</u> Upon the occurrence of an Event of Default hereunder or under the Loan Agreement, the rate of interest shall be the greater of (i) twenty-five and one-half percent (25.5%) per annum or (ii) the maximum amount of interest permitted by applicable law to be contracted for, charged or received (the "Default Rate"). The Default Rate will be charged upon the outstanding loan balance upon the occurrence of an Event of Default and may be calculated retroactively upon the balance due.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.<u>Acceleration and Remedies</u>. Upon the occurrence of an Event of Default hereunder, in addition to any other rights or remedies available to it hereunder or under any other Loan Document or at law or in equity, and without notice, the Lender may exercise any or all of the following rights and remedies as it may deem necessary or appropriate:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)declare the outstanding principal balance of the Loan, together with all accrued and unpaid interest thereon at the default rate and all other sums due hereunder or under any of the other Loan Documents, to be immediately due and payable in full together with reasonable attorneys' fees for collection and payment of the same maybe enforced and recovered by the entry of judgment on this Note and the issuance of execution thereon; and/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;(ii)set off all property of the Borrower now or hereafter at any time in its possession in any capacity whatsoever including but not limited to, any balance or share of any deposit, trust, or agency account, as to all of which property the Borrower hereby grants the Lender a lien and security interest. Borrower hereby authorizes Lender, to the extent permissible by applicable law, to charge or setoff all sums owing on the indebtedness against any and all such accounts, and at Lender's option, to administratively freeze all such accounts to allow Lender to protect Lender's charge and setoff rights provided in this paragraph.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)notwithstanding the absence or existence of any default hereunder Borrower shall pay upon demand any costs, expenses and attorney's fees incurred by Lender in connection with any bankruptcy or insolvency proceedings filed by or against Borrower whether any such costs, expenses or attorney's fees incurred in the sole discretion of Lender are related to the review, determination, protection, monitoring (including attendance at meetings or hearings) or enforcement by Lender of the indebtedness evidenced by the note, including, without limitation, the preparation and filing of any proof of claim, and

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without regard to whether Lender files, responds to or is a party to any application, motion or other proceeding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.<u>Waivers</u>. The Borrower hereby waives presentment, demand, notice of nonpayment protest notice of protest, or other notice of dishonor, and any and all other notices in connection with any default under this Note, or any enforcement of the payment of, the Loan. To the extent permitted by law, Borrower waives the right to any stay of execution and the benefit of all exemption laws now or hereafter in effect and agrees that such property may be sold to satisfy any judgment entered on this Note or the Security Documents, in whole or in part, and in any order as may be desired by Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.<u>Changes.</u> This Note can only be changed by an agreement in writing signed by the Borrower and the Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.<u>Taxes</u>. Borrower shall pay the cost of any revenue, tax or other stamps now or hereafter required by law at any time affixed to this Note or the Security Documents; and if any taxes shall be imposed with respect to debts secured by the Security Documents or with respect to notes evidencing debts so secured, Borrower agrees to pay or reimburse Lender upon demand the amount of such taxes, and if Borrower fails or refuses or is not legally permitted to do so, Lender may, at its option, accelerate this Note to maturity as in the case of a default by Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.<u>Binding on Successors and Assigns.</u> All obligations under this Note are the joint and several unconditional obligations of the Borrower and all who succeed to its rights and interests. Release of any Borrower, any guarantor or any other property or Collateral shall not release any other Borrower, guarantor, property or Collateral from its obligations under the Note. Lender may transfer, assign its rights under this Note upon notice to Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.<u>No Waiver by Lender.</u> Lender shall not be deemed to have modified or waived any of its rights or remedies hereunder unless such modification or waiver is in writing and signed by Lender and then only the extent specifically set forth therein. A waiver in any one event shall not be construed as continuing or as a waiver of or bar to the exercise of that right or remedy with respect to any subsequent event or occurrence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.<u>Maximum Rate of Interest on Loan</u>. Notwithstanding anything to the contrary contained herein or in any other document executed in connection with the Loan, the effective rate of interest on the Loan shall not exceed the maximum effective rate of interest permitted by applicable law or regulation. The Borrower hereby agrees to give the Lender written notice in the event that Borrower has actual knowledge that an interest payment made to the Lender with respect to this Loan will cause the total interest payments collected in any one year to be usurious under applicable law, and the Lender hereby agrees not to knowingly collect any interest from the Borrower in the form of fees or otherwise which will render this Loan usurious. In the event that such interest would be usurious in the Lender's opinion, the Lender reserves the right to reduce the interest payable by the Borrower or refund any such interest to the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.<u>Governing Law</u>. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.<u>Action. Waiver of Jury Trial; Consent to Jurisdiction and Venue; Consent to Service of Process.</u> Following the occurrence of any Event of Default, the Borrower shall pay upon demand all reasonable costs and expenses (including all amounts paid to attorneys, accountants, real estate brokers and other advisors employed by the Lender), incurred by the Lender in the exercise of any of its rights, remedies or powers under this Note, any of the Loan Documents or with respect to any Collateral with respect to such Event of Default and any amount thereof not paid promptly following demand therefor together with

------

interest thereon at the Default Rate from the date of such demand, shall become part of the Loan and shall be secured by the Deed of Trust and all other Collateral. In connection with and as part of the foregoing, in the event that any of the Loan Documents as defined in the Business Loan Agreement, is placed in the hands of an attorney for the collection of any sum payable thereunder, the Borrower agrees to pay reasonable attorneys' fees for the collection of the amount being claimed under such Loan Document, as well as all costs, disbursements and allowances provided by law, the payment of which sums shall be secured by the Deed of Trust and all other Collateral.

**THE BORROWER WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, OR RELATED TO, THIS NOTE OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS RELATED TO ANY OF THE LOAN DOCUMENTS. THIS WAIVER IS KNOWINGLY, INTENTIONALLY AND VOLUNTARILY MADE BY BORROWER AND BORROWER ACKNOWLEDGES THAT NEITHER LENDER NOR ANY PERSON ACTING ON BEHALF THEREOF HAS OR HAVE MADE ANY REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. THE BORROWER FURTHER ACKNOWLEDGES THAT BORROWER HAS BEEN REPRESENTED (OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF THIS NOTE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED BY BORROWER'S OWN FREE WILL, AND THAT BORROWER HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL. THE BORROWER AGREES THAT THIS IS A BUSINESS LOAN AND THAT THE OBLIGATIONS EVIDENCED BY THIS NOTE ARE EXEMPTED TRANSACTIONS UNDER THE TRUTH-IN-LENDING ACT, 15 U.S.C. SECTION 1601, ET SEQ.**

**THE BORROWER FURTHER ACKNOWLEDGES THAT BORROWER HAS READ AND UNDERSTANDS THE MEANING OF THIS WAIVER PROVISION.**

**BORROWER HEREBY CONSENTS TO THE JURISDICTION OF THE PENNSYLVANIA COURT OF COMMON PLEAS, PHILADELPHIA COUNTY OR THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF EASTERN DISTRICT OF PENNSYLVANIA FOR ANY PROCEEDING IN CONNECTION HEREWITH.**

**BORROWER HEREBY WAIVES OBJECTIONS AS TO VENUE AND CONVENIENCE OF FORUM.**

**IF LENDER BRINGS ANY ACTION OR SUIT TO ENFORCE ANY OR ALL OF BORROWER'S OBLIGATIONS UNDER THIS NOTE, THE LOAN DOCUMENTS, SERVICE OF PROCESS MAY BE MADE UPON THE BORROWER BY MAILING A COPY OF THE SUMMONS BY PREPAID CERTIFIED FIRST-CLASS MAIL, RETURN RECEIPT REQUESTED, TO THE BORROWER, AND IN SUCH EVENT BORROWER HEREBY WAIVES ANY AND ALL OBJECTIONS TO SUFFICIENCY OF SERVICE OF PROCESS. THE FOREGOING SHALL BE DEEMED INDEPENDENT COVENANTS.**

22**.** **CONFESSION OF JUDGMENT. EACH UNDERSIGNED BORROWER HEREBY GRANTS TO LENDER ALL THE RIGHT TO DECLARE ALL PRINCIPAL, INTEREST AND CHARGES OWED UNDER THIS NOTE TO BE IMMEDIATELY DUE AND PAYABLE, WITHOUT FURTHER ACTION OF ANY KIND ON THE PART OF THE LENDER. IN ADDITION, EACH UNDERSIGNED BORROWER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS THE PROTHONOTARY OR CLERK OR ANY ATTORNEY OF ANY COURT OF RECORD TO APPEAR FOR AND CONFESS JUDGMENT THEREIN AGAINST IT FOR THE**

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**AMOUNT WHICH MAY BE DUE HEREIN AS EVIDENCED BY THE AFFIDAVIT SIGNED BY AN OFFICER OF THE LENDER SETTING FORTH THE AMOUNT THEN DUE, INCLUDING ACCRUED INTEREST, CHARGES, FEES, LATE CHARGES, COSTS, AND ANY AND ALL CHARGES, TAXES, AND LIENS PAID BY LENDER, ITS SUCCESSORS AND ASSIGNS AND IN ANY MANNER AFFECTING OR CHARGEABLE AGAINST THE PREMISES AND IMPROVEMENTS DESCRIBED IN THE DEED OF TRUST PLUS ATTORNEY'S FEES IN THE AMOUNT OF FIFTEEN (15%) PERCENT OF THE AMOUNT DUE, BUT IN NO EVENT LESS THAN FIVE THOUSAND ($5,000.00) DOLLARS, AND ANY AND ALL CHARGES, TAXES, AND LIENS PAID BY LENDER, ITS SUCCESSORS AND ASSIGNS AND IN ANY MANNER AFFECTING OR CHARGEABLE AGAINST THE PREMISES AND IMPROVEMENTS DESCRIBED IN THE DEED OF TRUST TOGETHER WITH COSTS OF SUIT AND RELEASE OF ERRORS. IF A COPY HEREOF, VERIFIED BY AN AFFIDAVIT, SHALL HAVE BEEN FILED IN SAID PROCEEDING, IT SHALL NOT BE NECESSARY TO FILE THE ORIGINAL AS A WARRANT OF ATTORNEY. EACH BORROWER WAIVES THE RIGHT TO NOTICE AND A HEARING, ANY STAY OF EXECUTION AND THE BENEFIT OF ALL EXEMPTION LAWS NOW OR HEREAFTER IN EFFECT WITH RESPECT IN THE ENTRY OF ANY CONFESSION OF JUDGMENT. FURTHER, EACH UNDERSIGNED BORROWER SPECIFICALLY WAIVES AND DISCLAIMS THE BENEFITS AND PROTECTIONS AFFORDED TO IT AS PRINCIPAL, WITH RESPECT TO THE EXERCISE OF A POWER OF ATTORNEY BY THE AGENT UNDER 20 Pa.C.S.A. §5601.3(b), INCLUDING, BUT NOT LIMITED TO, THE AGENT'S DUTY TO ACT LOYALLY AND IN THE BEST INTERESTS OF THE PRINCIPAL AND TO AVOID CONFLICTS OF INTEREST. NO SINGLE EXERCISE SHALL BE DEEMED TO EXHAUST THE POWER, WHETHER OR NOT ANY SUCH EXERCISE SHALL BE HELD BY ANY COURT TO BE INVALID, VOIDABLE OR VOID, BUT THE POWER SHALL CONTINUE UNDIMINISHED AND MAY BE EXERCISED FROM TIME TO TIME AS OFTEN AS THE HOLDER HEREOF SHALL ELECT, UNTIL ALL SUMS PAYABLE OR THAT MAY BECOME PAYABLE HEREUNDER BY THE BORROWER HAVE BEEN PAID IN FULL.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.<u>Rights Cumulative</u>. No right or remedy conferred upon or reserved to the Lender under this Note or any of the Loan Documents, or with respect to any guaranty of payment of the Loan or of performance of any of the Borrower's obligations under any of the Loan Documents or any collateral securing the payment of the Loan under any of the Loan Documents, now or hereafter existing at law or in equity or by statute or other legislative enactment, is intended to be or shall be deemed exclusive of any other such right or remedy, and each and every such right or remedy shall be cumulative and concurrent, and shall be in addition to every other such right or remedy, and may be pursued singly, concurrently, successively or otherwise, at the sole discretion of the Lender, and shall not be exhausted by any one exercise thereof but may be exercised as often as occasion therefore shall occur. No act of the Lender shall be deemed or construed as an election to proceed under any one such right or remedy to the exclusion of any other such right or remedy; furthermore, each such right or remedy of the Lender shall be separate distinct and cumulative and none shall be given effect to the exclusion of any other. The failure to exercise or delay in exercising any such right or remedy, or the failure to insist upon strict performance of any term of any of the Loan Documents, shall not be construed as a waiver or release of the same, or of any Event of Default thereunder, or of any obligation or liability of the Borrower thereunder. Nothing herein, however, shall be construed to prevent the Lender from waiving any condition, obligation, or default it should so elect. In the event of such election by the Lender, any waiver, in order to be effective, must be in writing and signed by the Lender, and any such waiver shall be strictly limited in its effect to the condition, obligation or default specified therein and shall not extend to any subsequent condition, obligation or default or impair any right of the Lender with respect thereto.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24.<u>Judgment/Non-Merger</u>. The recovery of any judgment by the Lender and/or the levy of execution under any judgment shall not affect in any manner or to any extent, liens or other security interests in any Collateral, or any rights, remedies or powers of the Lender under any of the Loan Documents or with respect to any Collateral, but such liens and security interests, and such rights, remedies and powers of the Lender shall continue unimpaired as before. Further, the entry of any judgment by the Lender shall not affect in any way the interest rate payable under any of the Loan Documents on any amounts due to the Lender, but interest shall continue to accrue on such amounts at the Default Rate (as defined above)**.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25.<u>Notices</u>. All notices required hereunder shall be given in accordance with the terms of the Business Loan Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;26.<u>Partial Invalidity</u>, If any term or provision of this Note or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Note or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected there by and each term and provision of this Note shall be valid and be enforced to the fullest extent permitted by law.

IN WITNESS WHEREOF, the Borrower has executed this Commercial Promissory Note on the date first above set forth.

---

| | |
|:---|:---|
| Attest: | **BORROWER:** |
|  | Elauwit Connection, Inc. |
|  | By:  |
| Secretary | Barry Rubens, CEO |

---

------

**ACKNOWLEDGEMENT**

STATE OF &nbsp;&nbsp;&nbsp;&nbsp; : <br> : SS.: <br> COUNTY OF :

**BE IT REMEMBERED** that on this __ day of __, ____ before me, the subscriber, personally came and appeared, **Barry Rubens**, to me known, who I am satisfied is and who being by me duly sworn did depose and say that he is the Chief Executive Officer of **Elauwit Connection, Inc.**, and that he executed the foregoing instrument, that he sealed the same and delivered said instrument as the voluntary act and deed of the corporation.

**WITNESS** my hand and notarial seal the day and year aforesaid.

<u>My Commission Expires:</u>

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**DISCLOSURE FOR CONFESSION OF JUDGMENT AND WAIVER OF JURY TRIAL**

---

| | |
|:---|:---|
| **Date:** | **[___]** |
| **Undersigned:** | **Elauwit Connection, Inc.** |
| **Lender:** | **Endurance Opportunities I LLC** |

---

The undersigned has executed, on the date hereof, a certain Business Loan Agreement, evidencing the obligations of Elauwit Connection, Inc. evidenced by a certain Commercial Promissory Note of even date herewith, in favor of Lender, under which Commercial Promissory Note the undersigned is obligated to repay monies to Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **THE UNDERSIGNED ACKNOWLEDGES AND AGREES THAT THE COMMERCIAL PROMISSORY NOTE CONTAINS PROVISIONS UNDER WHICH LENDER MAY ENTER JUDGMENT BY CONFESSION AGAINST THE UNDERSIGNED. IN ADDITION, THE COMMERCIAL PROMISSORY NOTE CONTAINS PROVISIONS WAIVING THE UNDERSIGNED'S RIGHT TO A JURY TRIAL. BEING FULLY AWARE OF ITS RIGHTS TO PRIOR NOTICE AND A HEARING ON THE VALIDITY OF ANY JUDGMENT OR OTHER CLAIMS THAT MAY BE ASSERTED AGAINST IT BY LENDER THEREUNDER BEFORE JUDGMENT IS ENTERED, THE UNDERSIGNED HEREBY FREELY, KNOWINGLY AND INTELLIGENTLY WAIVES THESE RIGHTS AND EXPRESSLY AGREES AND CONSENTS TO LENDER'S ENTERING JUDGMENT AGAINST IT BY CONFESSION PURSUANT TO THE TERMS THEREOF.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.The undersigned certifies that a representative of Lender specifically called the confession of judgment and waiver of jury trial provisions in the Commercial Promissory Note to the attention of the undersigned, and/or that the undersigned was represented by legal counsel in connection therewith.

The undersigned hereby certifies that: (i) its annual income exceeds $10,000.00; (ii) all references to "the undersigned" above refers to all persons and entities signing below; and (iii) the undersigned received a copy hereof at the time of signing.

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| | | | |
|:---|:---|:---|:---|
| **BORROWER:** | **BORROWER:** |  |  |
| Elauwit Connection, Inc. | Elauwit Connection, Inc. |  |  |
| **By:** |  |  |  |
|  | Barry Rubens, CEO |  |  |
|  |  | Attest: | Attest: |
|  |  | By: |  |
|  |  |  | Secretary |

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## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER**

**Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**

I, Barry Rubens, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Quarterly Report on Form 10-Q of Elauwit Connection, Inc.;

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

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

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. [Paragraph omitted pursuant to Exchange Act Rules 13a-14(a) and 15d-15(a)];

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

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

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

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

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

---

| |
|:---|
| Date: May 14, 2026 |
| /s/ Barry Rubens |
| Barry Rubens |
| Chief Executive Officer |

---

------

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER**

**Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**

I, James Di Bartolo, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Quarterly Report on Form 10-Q of Elauwit Connection, Inc.;

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

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

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. [Paragraph omitted pursuant to Exchange Act Rules 13a-14(a) and 15d-15(a)];

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

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

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

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

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

---

| |
|:---|
| Date: May 14, 2026 |
| /s/ James Di Bartolo |
| James Di Bartolo |
| Chief Financial Officer |

---

------

## Ex-32

**Exhibit 32**

**Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to**

**Section 906 of the Sarbanes-Oxley Act of 2002**

Barry Rubens, Chief Executive Officer, and James Di Bartolo, Chief Financial Officer of Elauwit Connection, Inc. (the "Company"), each certify in his capacity as an officer of the Company that he has reviewed the Quarterly Report of the Company on Form 10-Q for the period ended March 31, 2026 (the "Report") and that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

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

---

| | |
|:---|:---|
| Date: May 14, 2026 | /s/ Barry Rubens  |
|  | Barry Rubens |
|  | Chief Executive Officer |
|  | (Principal Executive Officer) |

---

---

| | |
|:---|:---|
| Date: May 14, 2026 | /s/ James Di Bartolo |
|  | James Di Bartolo |
|  | Chief Financial Officer  |
|  | (Principal Financial Officer) |

---

The purpose of this statement is solely to comply with Title 18, Chapter 63, Section 1350 of the United States Code, as amended by Section 906 of the Sarbanes-Oxley Act of 2002. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

------