# EDGAR Filing Document

**Accession Number:** 0002084026
**File Stem:** 0001437749-26-014458
**Filing Date:** 2026-5
**Character Count:** 2137978
**Document Hash:** 290aa87c0496cf24c8dc1b448105dc26
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001437749-26-014458.hdr.sgml**: 20260501

**ACCESSION NUMBER**: 0001437749-26-014458

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

**PUBLIC DOCUMENT COUNT**: 22

**FILED AS OF DATE**: 20260501

**DATE AS OF CHANGE**: 20260501

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** QumulusAI, Inc.
- **CENTRAL INDEX KEY:** 0002084026
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374]
- **ORGANIZATION NAME:** 06 Technology
- **EIN:** 922681813
- **STATE OF INCORPORATION:** GA
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** S-1/A
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-292514
- **FILM NUMBER:** 26932450

**BUSINESS ADDRESS:**
- **STREET 1:** 1130 POWERS FERRY PL
- **CITY:** MARIETTA
- **STATE:** GA
- **ZIP:** 30067
- **BUSINESS PHONE:** 877-420-9242

**MAIL ADDRESS:**
- **STREET 1:** C/O FOX ROTHSCHILD LLP
- **STREET 2:** 33 S. SIXTH STREET, SUITE 3600
- **CITY:** MINNEAPOLIS
- **STATE:** MN
- **ZIP:** 55402

**As filed with the Securities and Exchange Commission on May 1, 2026.** 

**Registration Statement No. 333-292514**

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**UNITED STATES** 

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

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 **AMENDMENT NO. 3 TO**

**FORM S-1**

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

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**QUMULUSAI, INC.**

(Exact name of registrant as specified in its charter)

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| | | |
|:---|:---|:---|
| **Georgia** | **7374** | **92-2681813** |
| (State or other jurisdiction of<br> incorporation or organization) | (Primary Standard Industrial<br> Classification Code Number) | (I.R.S. Employer<br> Identification Number) |

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**1130 Powers Ferry Pl SE**

**Marietta, Georgia 30067**

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

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**Michael Maniscalco**

**Chief Executive Officer** 

**1130 Powers Ferry Pl SE**

**Marietta, Georgia 30067**

**(877) 420-9242**

(Name, address, including zip code, and telephone number, including area code, of agent for service)

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*Copies to:*

 **Patrick Pazderka, Esq.**

**Emily Humbert, Esq.**

**Fox Rothschild LLP**

**City Center**

**33 S. Sixth Street, Suite 3600**

**Minneapolis, Minnesota 55402**

**(612) 607-7000**

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

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box: ☒

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

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

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

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

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

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

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

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**The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission becomes effective. This prospectus is not an offer to sell these securities, and neither we nor the Registered Shareholders are soliciting offers to buy these securities in any state where the offer or sale of these securities is not permitted.** 

**SUBJECT TO COMPLETION, DATED May 1, 2026**

PRELIMINARY PROSPECTUS

 **37,172,292 SHARES OF COMMON STOCK**![logonew.jpg](logonew.jpg)

This prospectus relates to the registration of the resale of up to 37,172,292 shares of our common stock by our shareholders identified in this prospectus, or their permitted transferees, whom we refer to as the Registered Shareholders, in connection with our direct listing on the Nasdaq Global Market. With the exception of shares held by our directors, officers, and greater than 10% shareholders, which will be subject to restriction for six months following our direct listing, the shares being registered herein may be freely sold in market transactions following the listing and upon the effectiveness of this registration statement. All shares above mentioned in this paragraph represent one hundred percent (100%) of the company's currently issued and outstanding common stock, and, with the exception of shares held by our directors, officers, and greater than 10% shareholders, may be freely sold upon the effective date of this registration statement. None of such outstanding shares registered herein may be freely sold in reliance on an exemption from registration such as Rule 144 at this time. Prior to the listing of our common stock on the Nasdaq Global Market there has been no public market for our common stock. During the period from January 1, 2025 through April 30, 2026, we issued shares of common stock to investors at a low price of $3.00 per share and a high price of $23.15 per share. This information, however, may have little or no relation to broader market demand for our shares of common stock. As a result, you should not place undue reliance on these historical sales prices as they may differ materially from the public prices of our shares of common stock on Nasdaq.

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

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

On the day that our shares of common stock are initially listed on Nasdaq, Nasdaq will begin accepting, but not executing, pre-opening buy and sell orders and will begin to continuously generate the indicative Current Reference Price (as defined below) on the basis of such accepted orders. The Current Reference Price is calculated each second and, during a 10-minute "Display Only" period, is disseminated, along with other indicative imbalance information, to market participants by Nasdaq on its NOII and BookViewer tools. Following the "Display Only" period, a "Pre-Launch" period begins, during which Chardan Capital Markets LLC ("Chardan"), in its capacity as our financial advisor, must notify Nasdaq that our shares are "ready to trade." Once Chardan has notified Nasdaq that our shares of common stock are ready to trade, Nasdaq will confirm the Current Reference Price for our shares of common stock, in accordance with the Nasdaq rules. If Chardan then approves proceeding at the Current Reference Price, the applicable orders that have been entered will be executed at such price and the regular trading of our shares of common stock on Nasdaq will commence, subject to Nasdaq conducting validation checks in accordance with the Nasdaq rules. Under the Nasdaq rules, the "Current Reference Price" means: (i) the single price at which the maximum number of orders to buy or sell can be matched; (ii) if there is more than one price at which the maximum number of orders to buy or sell can be matched, then it is the price that minimizes the imbalance between orders to buy or sell (i.e. minimizes the number of shares that would remain unmatched at such price); (iii) if more than one price exists under (ii), then it is the entered price (i.e. the specified price entered in an order by a customer to buy or sell) at which our shares of common stock will remain unmatched (i.e. will not be bought or sold); and (iv) if more than one price exists under (iii), a price determined by Nasdaq in consultation with Chardan in its capacity as our financial advisor. In the event that more than one price exists under (iii), Chardan will exercise any consultation rights only to the extent that it can do so consistent with the anti-manipulation provisions of the federal securities laws, including Regulation M, or applicable relief granted thereunder. Neither we nor the Registered Shareholders (except Chardan) will be involved in Nasdaq's price-setting mechanism, including any decision to delay or proceed with trading, nor will they control or influence Chardan in carrying out its role as a financial adviser. Chardan will determine when our shares of common stock are ready to trade and approve proceeding at the Current Reference Price primarily based on considerations of volume, timing and price. In particular, Chardan will determine, based primarily on pre-opening buy and sell orders, when a reasonable amount of volume will cross on the opening trade such that sufficient price discovery has been made to open trading at the Current Reference Price. If Chardan does not approve proceeding at the Current Reference Price (for example, due to the absence of adequate pre-opening buy and sell interest), Chardan will request that Nasdaq delay the open until such a time that sufficient price discovery has been made to ensure a reasonable amount of volume crosses on the opening trade. For more information, see "*Plan of Distribution*."

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We intend to list our Common Stock on the Nasdaq Global Market under the symbol "QMLS."

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

**We are an** "**emerging growth company**" **as defined under U.S. federal securities laws and, as such, have elected to comply with reduced public company reporting requirements.**

**Investing in our shares of common stock involves a high degree of risk. See** "***Risk Factors***" **beginning on page 5 of this prospectus.** 

**Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.**

The date of this prospectus is , 2026.

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**TABLE OF CONTENTS**

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| | |
|:---|:---|
| CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS | iv |
| USE OF MARKET AND INDUSTRY DATA | vi |
| TRADEMARKS | vi |
| ABOUT THIS PROSPECTUS | vii |
| PROSPECTUS SUMMARY | 1 |
| RISK FACTORS | 5 |
| USE OF PROCEEDS | 48 |
| DIVIDEND POLICY | 49 |
| CAPITALIZATION | 50 |
| UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION | 51 |
| MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 57 |
| BUSINESS | 77 |
| MANAGEMENT | 95 |
| CORPORATE GOVERNANCE | 99 |
| EXECUTIVE COMPENSATION | 103 |
| DIRECTOR COMPENSATION | 111 |
| CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS | 114 |
| PRINCIPAL SHAREHOLDERS | 120 |
| DESCRIPTION OF SECURITIES | 124 |
| PLAN OF DISTRIBUTION | 127 |
| SHARES ELIGIBLE FOR FUTURE SALE | 130 |
| SALE PRICE HISTORY OF COMMON STOCK | 132 |
| MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS TO NON-U.S. HOLDERS | 133 |
| LEGAL MATTERS | 137 |
| INTERESTS OF NAMED EXPERTS AND COUNSEL | 137 |
| EXPERTS | 137 |
| WHERE YOU CAN FIND MORE INFORMATION | 137 |
| DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITY | 137 |

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_________________

We are responsible for the information contained and incorporated by reference in this prospectus and any accompanying prospectus supplement we prepare or authorize. Neither we nor the Registered Shareholders have authorized anyone to provide any information or to make any representations other than those contained in or incorporated by reference into this prospectus and any accompanying prospectus supplement we have prepared. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus and any accompanying prospectus supplement are an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus and any accompanying prospectus supplement is current only as of the date of the applicable document. Our business, financial condition, results of operations and prospects may have changed since those dates. It is important for you to read and consider all the information contained in this prospectus and in any accompanying prospectus supplement, including the documents incorporated by reference herein or therein, before making your investment decision.

For investors outside the United States: we have not, and the Registered Shareholders have not, taken any action to permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offer and sale of the common stock and the distribution of this prospectus outside the United States.

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**CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS**

This prospectus contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements contained in this prospectus other than statements of historical fact, including statements regarding our future operating results and financial condition, our business strategy and plans, market growth, and our objectives for future operations, are forward-looking statements. The words "believe," "may," "will," "potentially," "estimate," "continue," "anticipate," "intend," "could," "would," "project," "target," "plan," "expect," and similar expressions are intended to identify forward-looking statements. Forward-looking statements in this prospectus may include, for example, statements about the topics below and are subject to risks and uncertainties, including without limitation those described below:

● Our recent growth may not be indicative of our future growth.

● We have a limited number of suppliers for significant components of the equipment we use to build and operate our platform and provide our solutions and services.

● We may be unable to access sufficient power or may face increased costs to procure power, prolonged power outages, shortages, or capacity constraints.

● Our data center facilities may experience damage, interruption, or a security breach.

● Our blockchain mining operations expose us to risks that could materially adversely affect our business, operating results, financial condition, and future prospects.

● A substantial portion of our hosting revenue is driven by a limited number of our customers.

● A substantial portion of our current GPU-as-a-Service revenue is generated through a single channel partner, which we may be unable to retain.

● We may fail to efficiently enhance our platform and develop and sell new solutions and services and respond effectively to rapidly changing technology, evolving industry standards, changing regulations, and changing customer needs, requirements, or preferences.

● Artificial intelligence technology is new, and the continued rapid pace of developments in the artificial intelligence field are inherently uncertain.

● We may be unable to obtain additional capital to fund our business and support our growth.

● Our operating results may fluctuate significantly.

● We face intense competition and could lose market share to our competitors.

● There may be a network or data security incident against us, or our third-party providers.

● We have a history of generating losses and may not be able to achieve profitability.

● We make substantial investments in our technology and infrastructure, which may be unsuccessful.

● Our platform may encounter performance problems.

● There may be a failure of our information technology systems or those of one or more of our information technology service providers, business partners, vendors, suppliers, or other third-party service providers.

● We have a limited operating history at our current scale.

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● We rely on our management team and other key employees.

● We rely on the ability to obtain, maintain, protect, and enforce our intellectual property rights.

● We are subject to laws, regulations, and industry requirements related to data privacy, data protection and information security, and user protection across different markets where we conduct our business and such laws, regulations, and industry requirements are constantly evolving and changing.

● We may be unable to continue as a going concern.

● We will incur significant increased costs and management resources as a result of operating as a public company.

● We have a substantial amount of indebtedness.

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

● Our shares of common stock currently have no public market.

● An active trading market may not develop or continue to be liquid and the market price of our shares of common stock may be volatile.

We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, operating results, business strategy, and short-term and long-term business operations and objectives. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those described in the section titled "*Risk Factors*" and elsewhere in this prospectus. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the forward-looking events and circumstances discussed in this prospectus may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. We undertake no obligation to update any of these forward-looking statements for any reason after the date of this prospectus or to conform these statements to actual results or to changes in our expectations, except as required by law. These forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments.

In addition, statements that "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this prospectus. While we believe such information provides a reasonable basis for these statements, such information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

You should read this prospectus and the documents that we reference in this prospectus and have filed with the Securities and Exchange Commission (the "SEC") as exhibits to the registration statement of which this prospectus is a part with the understanding that our actual future results, performance, and events and circumstances may be materially different from what we expect.

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**USE OF MARKET AND INDUSTRY DATA**

This prospectus contains estimates made and other statistical data published by independent parties and by us relating to market size and growth and other data about our industry. We obtained the industry and market data in this prospectus from our own research as well as from industry and general publications, surveys and studies conducted by third parties. This data involves a number of assumptions and limitations and contains projections and estimates of the future performance of the industries in which we operate that are inherently subject to a high degree of uncertainty and actual events or circumstances may differ materially from events and circumstances reflected in this information. We caution you not to give undue weight to such projections, assumptions and estimates.

**TRADEMARKS**

This prospectus may contain trademarks, service marks and trade names of third parties, which are the property of their respective owners. Our use or display of third parties' trademarks, service marks and trade names or products in this prospectus is not intended to, and does not imply a relationship with, or endorsement or sponsorship by us. Solely for convenience, the trademarks, service marks and trade names referred to in this prospectus may appear without the®, TM or SM symbols, but the omission of such references is not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, the right of the applicable owner of these trademarks, service marks and trade names.

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**ABOUT THIS PROSPECTUS**

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

Unless the context otherwise indicates, the terms "QumulusAI," the "Company," "we," "us," and "our" as used in this prospectus refer to QumulusAI, Inc., formerly Global Digital Holdings, Inc., and our subsidiaries, and the term "common stock" refers to our common stock, no par value per share. The phrase "this prospectus" refers to this prospectus and any applicable prospectus supplement, unless the context otherwise requires.

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**PROSPECTUS SUMMARY**

*This summary highlights certain information about us, this offering and selected information contained in this prospectus. This summary is not complete and does not contain all of the information that you should consider before deciding whether to invest in our common stock. You should read the entire prospectus carefully, including the sections titled* "*Risk Factors,*" "*Unaudited Pro Forma Condensed Combined Financial Information,*" "*Management*'*s Discussion and Analysis of Financial Condition and Results of Operations*" *and our financial statements and the related notes included in this prospectus, before making an investment decision. Some of the statements in this prospectus constitute forward-looking statements. Some of the statements in this prospectus constitute forward-looking statements. See the* "*Cautionary Note Regarding Forward-Looking Statements.*"

**Company Background**

QumulusAI is a cloud infrastructure company specializing in rapid deployment of graphics processing unit ("GPU")-powered solutions for artificial intelligence ("AI") applications, serving a critical market that is often overlooked by large-scale cloud providers ("hyperscalers"), which operate massive, standardized computing infrastructures primarily serving the largest enterprises. Our platform delivers flexible, competitively priced, and customizable solutions for underserved small and mid-market customers—including machine learning teams, AI infrastructure startups, and research institutions—while also supporting the scale and complexity requirements of large enterprises, such as long-term deployments or supplemental on-demand compute capacity.

The Company traces its origins to WAHA Technologies, Inc. ("WAHA") and WAHA, Inc. (renamed SPRE Commercial Group, Inc., or "SPRE"), both incorporated in 2019. SPRE focused on data center assets and operations, while WAHA specialized in blockchain managed services. In December 2022, the two entities completed a corporate roll-up to form Global Digital Holdings, Inc. and remain wholly owned subsidiaries of the Company. In April 2025 (after a substantial minority investment in October 2023), Global Digital Holdings, Inc. acquired The Cloud Minders, Inc. (a company focused on GPU-as-a-Service ("GPUaaS") assets and operations), now a wholly owned subsidiary, and rebranded the combined operations as QumulusAI. Please see "*Unaudited Pro Forma Condensed Combined Financial Information*" and "*Management*'*s Discussion and Analysis of Financial Condition and Results of Operations* – *Recent Developments*" for additional information regarding our acquisition of The Cloud Minders, Inc. On August 18, 2025, Global Digital Holdings, Inc. changed its name to QumulusAI, Inc.

Today, we distinguish ourselves by deploying, activating and producing revenue from GPU infrastructure within approximately 90 days. We do so across a distributed network of sales channel and platform partners and the strategic use of stranded colocation facilities, enabling us to connect with thousands of developer clients with an expedited path from procurement to revenue generation. Traditional infrastructure providers, by comparison, can take up to 12 to 24 months to activate new capacity.

QumulusAI is headquartered in Marietta, Georgia. Here, we operate more than 1,120 GPUs across three colocation data centers in Marietta, Georgia, Kansas City, Missouri, and Philadelphia, Pennsylvania. We have secured rights of first refusal for 30 megawatts ("MW") of information technology ("IT") load capacity space for our GPU equipment and we are actively planning for expansion exceeding 120 MW of total IT load across our platform with potential to support over 90,000 NVIDIA B200/B300 GPUs (among the latest generation GPUs purpose-built for foundation model training), or as many as 1,500,000 GPUs optimized for AI inference at scale.

Additionally, in the aggregate, we operate approximately 12 MW of grid power with immediate access to more than 40 MW of additional grid power in Watonga, Oklahoma and Denton, Texas where we manage blockchain assets. These sites serve as foundational assets for power-intensive compute deployments and provide strategic flexibility for future infrastructure repurposing.

At present, the majority of the Company's active power capacity is allocated to blockchain asset management rather than high-performance computing ("HPC"). As of the date of this filing, the Company operates approximately 10 MW of blockchain load in Watonga, Oklahoma. By comparison, the Company's HPC business currently utilizes approximately 2 MW of IT load (approximately 2.8 MW total power load), supporting approximately 1,120 GPUs currently deployed and an additional 952 GPUs in the process of being delivered and deployed.

Although blockchain currently represents the majority of deployed power, the Company's growth strategy is focused on HPC. In 2026, the Company expects, for the first time, revenue generated from HPC compute services to exceed revenue generated from blockchain operations, reflecting the higher revenue density of HPC workloads relative to blockchain.

By the end of 2026, the Company expects its HPC operations to support approximately 11.0 MW of total HPC IT load (approximately 15.4 MW total power load), inclusive of approximately 1,100 GPUs deployed in 2025 and the planned deployment of over 5,800 additional GPUs, consisting of an estimated mix of approximately 80% B200 and B300 data center GPUs and approximately 20% RTX Pro 6000–class servers.

With respect to blockchain operations, the Company expects to continue operating approximately 10 MW of blockchain load in Watonga, Oklahoma on an ongoing basis. SPRE TULSA OK, LLC, an indirect wholly owned subsidiary of the Company, sold its interest in the T20 Mining Group, LLC ("T20") joint venture on February 13, 2026, which supported approximately 50 MW of blockchain load in Tulsa, Oklahoma. This transaction significantly reduced our blockchain operation while providing a $16.5 million cash injection to our balance sheet. The Company intends to use this capital to accelerate the development and scale of its HPC business. Following this transaction, the Company expects that approximately 10 MW of blockchain load in Denton, Texas, will remain scheduled, resulting in approximately 20 MW of total blockchain operations inclusive of the Watonga facility. Separately, the Company has approximately 9 MW of on-grid power availability in Watonga, which it plans to allocate toward HPC data center expansion, representing approximately 6 MW of additional HPC IT load (approximately 8.4 MW total power load).

As a result of these planned deployments and portfolio changes, the Company expects that by the end of 2026, a greater portion of its active power capacity will be allocated to HPC compute workloads than to blockchain asset management. While the Company currently expects to have approximately 20 MW allocated or otherwise activated for blockchain operations and approximately 23.8 MW allocated or otherwise activated for HPC compute workloads by that time, actual allocations may vary based on deployment timing, customer demand, power availability, and execution. In addition, the Company is actively evaluating opportunities to secure additional powered land for future HPC data center construction and to expand its data center colocation footprint, although there can be no assurance as to the timing or scale of any such expansion.

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**Implications of Being an Emerging Growth Company and a Smaller Reporting Company**

As a company with less than $1.235 billion of revenue during our last fiscal year, we qualify as an "emerging growth company" as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. We may remain an emerging growth company for up to five years from the date of our direct listing, or until such earlier time as we have more than $1.235 billion in annual revenue, the market value of our stock held by non-affiliates is more than $700 million as of the final day of our second fiscal quarter, in which case we would cease to be an "emerging growth company" as of the following final day of our fiscal year, or we issue more than $1 billion of non-convertible debt over a three-year period.

For so long as we remain an emerging growth company, we are permitted and intend to rely on certain exemptions from various public company reporting requirements, including not being required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute payments not previously approved. In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of this extended transition period under the JOBS Act. As a result, our operating results and financial statements may not be comparable to the operating results and financial statements of other companies who have adopted the new or revised accounting standards.

We are also a "smaller reporting company," meaning that the market value of our stock held by non-affiliates is less than $700 million and our annual revenue was less than $100 million during our most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250 million measured on the last business day of our second fiscal quarter or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million measured on the last business day of our second fiscal quarter. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. For so long as we remain a smaller reporting company, we are permitted and intend to rely on exemptions from certain disclosure and other requirements that are applicable to other public companies that are not smaller reporting companies, such as providing only two years of audited financing statements.

**Summary of Risk Factors**

Below is a summary of material factors that make an investment in our common stock speculative or risky. This summary may not address all of the risks and uncertainties that we face. Additional discussion of the risks and uncertainties summarized in this risk factor summary, as well as other risks and uncertainties that we face, can be found under the section titled "*Risk Factors*" in this prospectus. The below summary is qualified in its entirety by that more complete discussion of such risks and uncertainties. You should carefully consider the risks and uncertainties described under the section titled "*Risk Factors*" as part of your evaluation of an investment in our common stock:

● Our recent growth may not be indicative of our future growth, and if we do not effectively manage our future growth, our business, operating results, financial condition, and future prospects may be adversely affected.

● We have a limited number of suppliers for significant components of the equipment we use to build and operate our platform and provide our solutions and services. Any disruption in the availability of these components could delay our ability to expand or increase the capacity of our infrastructure or replace defective equipment.

● Our business would be harmed if we were not able to access sufficient power or by increased costs to procure power, prolonged power outages, shortages, or capacity constraints.

● If our data center facilities experience damage, interruption, or a security breach, our ability to provide access to our infrastructure and maintain the performance of our network could be negatively impacted.

● Our blockchain mining operations expose us to risks that could materially adversely affect our business, operating results, financial condition, and future prospects.

● A substantial portion of our hosting revenue is driven by a limited number of our customers, and the loss of, or a significant reduction in, spend from one or a few of our top customers would adversely affect our business, operating results, financial condition, and future prospects.

● A substantial portion of our current GPU-as-a-Service ("GPUaaS") revenue is generated through a single channel partner, and the loss or deterioration of this relationship would adversely affect our business.

● If we fail to efficiently enhance our platform and develop and sell new solutions and services and respond effectively to rapidly changing technology, evolving industry standards, changing regulations, and changing customer needs, requirements, or preferences, our platform may become less competitive.

● The broader adoption, use, and commercialization of AI technology, and the continued rapid pace of developments in the AI field, are inherently uncertain. Failure by our customers to continue to use our platform to support AI use cases in their systems, or our ability to keep up with evolving AI technology requirements and regulatory frameworks, could have a material adverse effect on our business, operating results, financial condition, and future prospects.

● Our operations require substantial capital expenditures, and we will require additional capital to fund our business and support our growth, and any inability to generate or obtain such capital on acceptable terms, if at all, or to lower our total cost of capital, may adversely affect our business, operating results, financial condition, and future prospects.

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● Our operating results may fluctuate significantly, which could make our future results difficult to predict and could cause our operating results to fall below expectations.

● We face intense competition and could lose market share to our competitors, which would adversely affect our business, operating results, financial condition, and future prospects.

● A network or data security incident against us, or our third-party providers, whether actual, alleged, or perceived, could harm our reputation, create liability and regulatory exposure, and adversely impact our business, operating results, financial condition, and future prospects.

● We have a history of generating net losses as a result of the substantial investments we have made to grow our business and develop our platform, anticipate increases in our operating expenses in the future, and may not achieve or, if achieved, sustain profitability. If we cannot achieve and, if achieved, sustain profitability, our business, operating results, financial condition, and future prospects will be adversely affected.

● We make substantial investments in our technology and infrastructure and unsuccessful investments could materially adversely affect our business, operating results, financial condition, and future prospects.

● Our platform is complex and performance problems or defects associated with our platform may adversely affect our business, operating results, financial condition, and future prospects.

● Any failure of our IT systems or those of one or more of our IT service providers, business partners, vendors, suppliers, or other third-party service providers, or any other failure by such third parties to provide services to us may negatively impact our relationships with customers and harm our business.

● We have a limited operating history at our current scale, which makes it difficult to evaluate our current business and future prospects and increases the risks associated with investment in our common stock.

● We have a limited history selling access to our platform under our current business model and are continuing to scale our operations and evolve our go-to-market strategy, which may make it difficult to evaluate our business and prospects and increase the risks associated with an investment in our common stock.

● If we are unable to attract new customers, retain existing customers, and/or expand sales of our platform, solutions, and services to such customers, we may not achieve the growth we expect, which would adversely affect our business, operating results, financial condition, and future prospects.

● We rely on our management team and other key employees and will need additional personnel to grow our business, and the loss of one or more key employees or our inability to attract and retain qualified personnel, including members of our Board of Directors, could harm our business.

● Failure to obtain, maintain, protect, or enforce our intellectual property and proprietary rights could enable others to copy or use aspects of our platform without compensating us, which could harm our brand, business, operating results, financial condition, and future prospects.

● We are subject to laws, regulations, and industry requirements related to data privacy, data protection and information security, and user protection across different markets where we conduct our business and such laws, regulations, and industry requirements are constantly evolving and changing. Any actual or perceived failure to comply with such laws, regulations, and industry requirements, or our privacy policies, could harm our business.

● There is uncertainty regarding our ability to continue as a going concern.

● We will incur significant increased costs and management resources as a result of operating as a public company.

● Our substantial indebtedness could materially adversely affect our financial condition, our ability to raise additional capital to fund our operations, our ability to operate our business, our ability to react to changes in the economy or our industry, our ability to meet our obligations under our outstanding indebtedness and could divert our cash flow from operations for debt payments, and we may still incur substantially more indebtedness in the future.

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

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

● Limitations on investors' ability to trace their shares to this registration statement may preclude claims under Sections 11 and 12 of the Securities Act, potentially reducing our liability exposure and limiting investors' remedies.

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

**Corporate Information**

The address of our principal executive office is 1130 Powers Ferry Pl SE, Marietta, Georgia 30067 and our telephone number is (877) 420-9242. Our website can be found at *www.qumulusai.com*. The information contained on our website is not a part of this prospectus, nor is such content incorporated by reference herein, and should not be relied upon in determining whether to make an investment in our shares of common stock. With prior operations from its wholly owned subsidiaries—incorporated July 15, 2019 (WAHA) and July 18, 2019 (SPRE)—the Company was incorporated on December 9, 2022 in the State of Georgia under the name of Global Digital Holdings, Inc., which we later updated to QumulusAI, Inc.

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**Summary Historical Financial and Other Data**

The following tables set forth our summary of historical financial data as of December 31, 2025 and 2024.

The summary statements of operations data for the periods ended December 31, 2025 and 2024 are derived from our audited financial statements and notes that are included elsewhere in this prospectus.

Our Board of Directors and our shareholders each approved the conversion of all outstanding series of preferred stock into common stock (the "Conversion") and a 1-for-3 reverse stock split of our common stock issued and outstanding thereafter (the "Reverse Stock Split"). On September 30, 2025, we filed amended and restated articles of incorporation with the State of Georgia to immediately effect the Reverse Stock Split. All share and per share information is presented on a post-Conversion and post-Reverse Stock Split basis.

We have prepared the audited financial statements in accordance with the U.S. generally accepted accounting principles ("GAAP"). Our historical results are not necessarily indicative of our results in any future period. Results from our interim period may not necessarily be indicative of the entire year's results.

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| | | |
|:---|:---|:---|
|  | **Year Ended** <br> **December 31,** <br> **2025** | **Year Ended**<br> **December 31,** <br> **2024** |
| **Statement of Operations Data:** |  |  |
| Revenue | $11845870 | $8095672 |
| Cost of revenue | $6421207 | $5371049 |
| General and administrative expenses | $10001385 | $3346547 |
| Loss from operations | $(10259177) | $(7785958) |
| Net income (loss) | $(4459879) | $(13184374) |
| **Statement of Cash Flows Data:** |  |  |
| Cash flows from operating activities | $(5677062) | $(2021408) |
| Cash flows from investing activities | $(8594008) | $(1871322) |
| Cash flows from financing activities | $22013097 | $7231852 |
| Cash, end of period | $11712493 | $3970466 |

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| | | |
|:---|:---|:---|
| **Balance Sheet Data:** | **December 31,** <br> **2025** | **December 31,** <br> **2024** |
| Total assets | $91734493 | $20345894 |
| Total liabilities | $26442362 | $18903993 |
| Total mezzanine equity | ⸺ | $2032561 |
| Total stockholders' equity (deficit) | $65292131 | $(590660) |

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**RISK FACTORS**

*Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this prospectus, before making a decision to invest in our common stock. If any of the following risks occur, our business, operating results, financial condition and future prospects could be materially and adversely affected. In that event, you could lose all or a part of your investment. This prospectus also contains forward-looking statements and estimates that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of specific factors, including the risks and uncertainties described below. See the section titled* "*Cautionary Note Regarding Forward-Looking Statements*" *for more information.*

**Risks Related to Our Business and Industry** 

***Our recent growth may not be indicative of our future growth, and if we do not effectively manage our future growth, our business, operating results, financial condition, and future prospects may be adversely affected.***

We were founded in 2022 and have experienced significant growth in a short period of time. Our revenue was $11,845,870 and $8,095,672 for the years ended December 31, 2025 and 2024, respectively. Investors should not rely on the revenue growth of any prior quarterly or annual period as an indication of our future performance. Even if our revenue continues to increase, our revenue growth rate is expected to decline in the future as a result of a variety of factors, including the maturation of our business. Overall growth of our revenue will depend on a number of factors, including but not limited to our ability to:

● operate our cloud infrastructure, including due to supply chain limitations and data center or power availability;

● compete with other companies in our industry, including those with greater financial, technical, marketing, sales, and other resources;

● continue to develop new solutions and services and new functionality for our platform and successfully further optimize our existing infrastructure, solutions, and services;

● retain existing customers and increase sales to existing customers, as well as attract new customers and grow our customer base;

● successfully expand our business;

● generate sufficient cash flow from operations and raise additional capital, including through indebtedness, to support continued investments in our platform to maintain our technological leadership and the security of our platform;

● strategically expand our direct sales force and leverage our existing sales capacity;

● introduce and sell our solutions and services to new markets and verticals;

● recruit, hire, train, and manage additional qualified personnel for our research and development activities;

● maintain our existing, and enter into new, more cost-efficient, financing structures; and

● successfully identify and acquire or invest in businesses, products, or technologies that we believe could complement or expand our platform.

In addition to the factors discussed above, our revenue growth may also be impacted by industry-specific factors, particularly the continued development of AI, including advancements in AI technology that may lead to further compute efficiencies, the broader adoption, use, and commercialization of AI and any impacts of the developing AI regulatory environment.

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As many of these factors are beyond our control, it is difficult for us to accurately forecast our future operating results. If the assumptions that we use to plan our business are incorrect or change in reaction to changes in our market, we may be unable to maintain consistent revenue or revenue growth, the value of our stock could be volatile, and it may be difficult to achieve and, if achieved, maintain profitability. In addition, changes in the macroeconomic environment, including actual or perceived global banking and finance related issues, labor shortages, supply chain disruptions, volatile interest rates and inflation, trade restrictions such as tariffs, spending environments, geopolitical instability, warfare and uncertainty, including the effects of the conflicts in the Middle East and Ukraine and tensions between China and Taiwan, weak economic conditions in certain regions, or a reduction in AI spending regardless of macroeconomic conditions may impact our growth.

In addition, as we have grown, our number of customers has also increased, and we have increasingly managed more complex deployments of our infrastructure in more complex computing environments. The rapid growth and expansion of our business places a significant strain on our management, operational, engineering, and financial resources. To manage any future growth effectively, we must continue to improve and expand our infrastructure, including IT and financial infrastructure, our operating and administrative systems and controls, and our ability to manage headcount, capital, and processes in an efficient manner. If we do not manage future growth effectively, our business, operating results, financial condition, and future prospects would be harmed.

If we continue to experience rapid growth, we may not be able to successfully implement or scale improvements to our systems, processes, and controls in an efficient, timely, or cost-effective manner. As we grow, our existing systems, processes, and controls may not prevent or detect all errors, omissions, or fraud. Any future growth will continue to add complexity to our organization and require effective coordination throughout our organization. Failure to manage any future growth effectively could result in increased costs, cause difficulty or delays in deploying our platform to new and existing customers, reduce demand for our platform, and cause difficulties in introducing new solutions and services or other operational difficulties, and any of these difficulties would adversely affect our business, operating results, financial condition, and future prospects.

***We have a limited number of suppliers for significant components of the equipment we use to build and operate our platform and provide our solutions and services. Any disruption in the availability of these components could delay our ability to expand or increase the capacity of our infrastructure or replace defective equipment.***

We do not manufacture the components we use to build the technology infrastructure underlying our platform. We have a limited number of suppliers that we use to procure and configure significant components of the technology infrastructure that we use to operate our platform and provide our solutions and services to our customers. For example, there is a limited number of original equipment manufacturers that build servers in significant scale with the latest generation GPUs. These consist primarily of Super Micro Computer, Inc., Dell Technologies Inc., Hewlett Packard Enterprise Company, Lenovo Group Limited, and Gigabyte Technology Co., Ltd. As of today, the manufacture of GPUs is dominated by NVIDIA Corporation with only Advanced Micro Devices, Inc. and Intel Corporation currently as viable contenders. Additionally, with respect to power infrastructure, cooling infrastructure to power and properly maintain the equipment we use our datacenters has a similarly limited number of manufacturers of key supplies, such as transformers, computer room air conditioner/computer room air handler units, chillers, cooling towers, in-row cooling units, rear door heat exchangers, direct-to-chip liquid cooling, immersion cooling systems, pumps and manifolds, air handling units, containment systems, microchips and sensors and controls. Supporting equipment such as networking and storage systems have a limited number of manufacturers that produce equipment at the requisite level of performance. Utilizing a limited number of suppliers of the components for our technology infrastructure exposes us to risks, including:

● asymmetry between component availability and contractual performance obligations, including where specified components are required;

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● shifts in market-leading technologies away from those offered by our current suppliers that could impact our ability to offer our customers the solutions and services that they are seeking;

● reduced control over production costs and constraints based on the then current availability, terms, and pricing of these components, including any delays in our supply chain;

● limited ability to control aspects of the quality, performance, quantity, and cost of our infrastructure or of its components;

● the potential for binding price or purchase commitments with our suppliers at higher than market rates;

● reliance on our suppliers to keep up with technological advancements at the same pace as our business and customer demands, including their ability to continue to deliver next generation components that are substantially better than the prior generation;

● consolidation among suppliers in our industry, which may harm our ability to negotiate and obtain favorable terms from our suppliers and the third-party suppliers that our suppliers rely on;

● labor and political unrest at facilities we do not operate or own;

● geopolitical disputes disrupting our or any of our suppliers' supply chains;

● business, legal compliance, litigation, and financial concerns affecting our suppliers or their ability to manufacture and ship components in the quantities, quality, and manner we require;

● impacts on our supply chain from adverse public health developments, including outbreaks of contagious diseases or pandemics; and

● disruptions due to floods, earthquakes, storms, and other natural disasters, particularly in countries with limited infrastructure and disaster recovery resources, or regional conflicts.

Our technology infrastructure components suppliers fulfill our supply requirements on the basis of individual purchase orders, which we often place on a just-in-time basis. We currently have no long-term contracts or arrangements with our suppliers that guarantee capacity or the continuation of any particular payment terms. Accordingly, our suppliers are not obligated to continue to fulfill our supply requirements, and the prices we are charged for their products and, if applicable, services could be increased on short notice. Further, because we often submit purchase orders to our suppliers on a just-in-time basis, any delay from our suppliers may result in our inability to provide our infrastructure and platform to our customers on a timely basis and fulfill our contractual requirements under our customer contracts. If we are required to change suppliers, our ability to meet our obligations to our customers, including scheduled compute access, could be adversely affected and our solutions may not be as performant, which could cause the loss of sales from existing or potential customers, delayed revenue, or an increase in our costs, which could adversely affect our margins. Any production or shipping interruptions for any reason, such as a natural disaster, epidemics, pandemics, capacity shortages, quality problems, or strike or other labor disruption at one of our supplier locations or at shipping ports or locations, could adversely affect sales of our solution and services offerings.

In addition, we are continually working to expand and enhance our infrastructure features, technology, and network and other technologies to accommodate substantial increases in the computing power required by more compute-intensive workloads on our platform, the amount of data we host, and our overall number of total customers. We may be unable to project accurately the rate or timing of these increases or to allocate resources successfully to address such increases and may underestimate the data center capacity needed to address such increases. Our limited number of suppliers, in turn, may not be able to quickly respond to our needs, which would have a negative impact on customer experience and contractual performance. In the future, we may be required to allocate additional resources, including spending substantial amounts, to build, purchase, or lease or license data centers and equipment and upgrade our technology and network infrastructure in order to handle increased customer usage, and our suppliers may not be able to satisfy such requirements. In addition, our network or our suppliers' networks might be unable to achieve or maintain data transmission capacity high enough to effectively deliver our services. We may also face constraints on our ability to deliver our platform, solutions, and services if there is limited power supply. Our failure, or our suppliers' failure, to achieve or maintain high data transmission capacity and sufficient electrical services would impact our ability to meet customer needs and could significantly reduce consumer demand for our services. Such reduced demand and resulting loss of compute, cost increases, or failure to upgrade our equipment or adapt to new technologies would harm our business, operating results, financial condition, and future prospects.

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Moreover, our suppliers themselves rely on a complex network of third-party suppliers for semiconductor manufacturing, hardware components, and other critical inputs, which introduces additional risks to our supply chain. Any disruption in the operations of these upstream suppliers, whether due to equipment failures, geopolitical factors such as the potential for military conflict between China and Taiwan, or supply chain constraints, could affect our suppliers' ability to supply the significant components of the equipment we use to operate our platform and provide our solutions and services to our customers, which would, in turn, affect the availability of our solutions and services, as well as lead times.

In addition, to the extent any of our suppliers' businesses are impacted by business, legal compliance, litigation, and financial concerns, including regulatory scrutiny and export controls, our business, operating results, financial condition, and future prospects may be adversely affected. For example, increasing use of tariffs, economic sanctions and export controls has impacted and may in the future impact the availability and cost of GPUs and other components of our platform. The current U.S. presidential administration has imposed broad-based tariffs on imported goods, which may increase costs associated with components of our infrastructure and other products we use. For example, we occasionally order replacement parts from China and are charged by U.S. Customs for import taxes. To mitigate such costs, we have directed purchases to U.S. suppliers when possible, although we may not always be able to find appropriate alternatives. Further, the former U.S. presidential administration had released new export controls targeting semiconductor manufacturing equipment and other items related to advanced integrated circuits. It is possible that these and additional restrictions could impede the supply chain in this industry. Additional export restrictions imposed on components of our technologies by the U.S. government may also provoke responses from foreign governments that negatively impact our supply chain, increase the costs for affected imported goods, or limit our ability to obtain additional hardware components, which would also substantially reduce our ability to provide or develop our platform, solutions, and services.

In the event of a supplier unavailability, component shortage, including, in particular, anticipated microchip shortages, or supply interruption, we may not be able to secure alternate sources in a timely manner. Securing alternate sources of supply for these components or services may be time-consuming, difficult, and costly and we may not be able to source these components or services on terms that are acceptable to us, or at all, which may undermine our ability to fill our orders in a timely manner. Any interruption or delay in the supply of any of these components or services, or the inability to obtain these components or services from alternate sources at acceptable prices and within a reasonable amount of time, would harm our ability to meet the demand of our customers, which in turn would have an adverse effect on our business, operating results, financial condition, and future prospects.

***Our business would be harmed if we were not able to access sufficient power or by increased costs to procure power, prolonged power outages, shortages, or capacity constraints.***

We depend on being able to secure power, which powers our data center facilities, in a cost-effective manner. Our inability to secure sufficient power or any power outages, shortages, supply chain issues, capacity constraints, or significant increases in the cost of securing power could have an adverse effect on our business, operating results, financial condition, and future prospects.

We rely on third parties, third-party infrastructure, governments, and global suppliers to provide a sufficient amount of power to maintain our leased or licensed data center facilities and meet the needs of our current and future customers. We may experience insufficient power to service a customer's project. For example, we previously held a contract with Washington, Georgia, which provided for power at a fixed rate. We received notice that the city could no longer honor the contract rate as it would bankrupt the city, contrary to state law. This rendered continued operations at that location commercially impractical and led us to sell the site to another company. Similar municipal and state rules could cause other contracts to become null and void, which may cause us to have access to insufficient power, which may prevent us from serving our customers.

Any limitation on the delivered energy supply would limit our ability to operate our platform. These limitations would have a negative impact on a given data center or limit our ability to grow our business which could negatively affect our business, operating results, financial condition, and future prospects. Limitations on generation, transmission, and distribution may also limit our ability to obtain sufficient power capacity for potential expansion sites in new or existing markets. Power providers, including in particular Public Service Utility of Oklahoma, other participants in the power market, and those entities that regulate it may impose onerous operating conditions to any approval or provision of power or we may experience significant delays and substantial increased costs to provide the level of electrical service required by our current or future leased or licensed data centers, or any data centers we may choose to construct in the future. Our ability to find appropriate sites for expansion, including existing sites to lease or license, will also be limited by access to power.

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Our data center facilities are affected by problems accessing electricity sources, such as planned or unplanned power outages and limitations on transmission or distribution of power. Unplanned power outages, including, but not limited to those relating to large storms, earthquakes, fires, tsunamis, cyberattacks, physical attacks on utility infrastructure, war, and any failures of electrical power grids more generally, and planned power outages by public utilities, could harm our customers and our business. Further, our data center facilities are located in leased buildings where, depending upon the lease requirements and number of tenants involved, we may or may not control some or all of the infrastructure, including generators and fuel tanks. As a result, in the event of a power outage, we could be dependent upon the landlord, as well as the utility company, to restore the power. Even if we attempt to limit our exposure to system downtime by using backup generators, which are in turn supported by onsite fuel storage and through contracts with fuel suppliers, these measures may not always prevent downtime or solve for long-term or large-scale outages. Any outage or supply disruption could adversely affect our customer experience, as well as our business, operating results, financial condition, and future prospects.

The global energy market is currently experiencing inflation and volatility pressures. Various macroeconomic and geopolitical factors are contributing to the instability, energy price spikes and global power shortage, including the war in Ukraine and the war in Iran, severe weather events, governmental regulations, government relations, and inflation. We expect the cost for power to continue to be volatile and unpredictable and subject to inflationary pressures, which could materially affect our financial forecasting, business, operating results, financial condition, and future prospects.

***If our data center facilities experience damage, interruption, or a security breach, our ability to provide access to our infrastructure and maintain the performance of our network could be negatively impacted.***

We lease space located in the United States. Our business is reliant on these data center facilities. Our data center facilities and network infrastructure are vulnerable to damage or interruption from a variety of sources including earthquakes, floods, fires, power loss, system failures, computer and other cybersecurity vulnerabilities, physical or electronic break-ins, human error, malfeasance or interference, including by employees, former employees, or contractors, as well terrorist acts and other catastrophic events. We and the data center facilities we lease have in the past experienced, and may in the future experience, disruptions, outages, and other performance problems due to a variety of factors, including availability or sufficiency of power, infrastructure changes, and capacity constraints, occasionally due to an overwhelming number of customers accessing our infrastructure simultaneously. For example, we have in the past experienced temporary power disruptions and have voluntarily curtailed operations in certain locations in response to extreme weather conditions and grid availability constraints. We may elect to take similar actions in the future if similar conditions arise. Our data centers and network infrastructure may also be subject to cybersecurity attacks, including supply chain attacks, due to the actions of outside parties or human error, malfeasance, insider threats, system errors or vulnerabilities, insufficient cybersecurity controls, a combination of these, or otherwise, which may cause service outages and otherwise impact our ability to provide our solutions and services. While we review the security measures of our third-party data centers, we cannot ensure that these measures will be sufficient to prevent a cybersecurity attack or to protect the continued operation of our platform in the event of a cybersecurity attack, and any impact to our solutions and services may also impact our business, operating results, financial condition, and future prospects. Data center facilities housing our network infrastructure may also be subject to local administrative actions, changes to legal or permitting requirements, labor disputes, litigation to stop, limit, or delay operations, and other legal challenges, including local government agencies seeking to gain access to customer accounts for law enforcement or other reasons. In addition, while we have entered into various agreements for the lease of data center space, equipment, maintenance, and other services, those third parties could fail to deliver on their contractual obligations under those agreements, including agreements to provide us with certain data, equipment, and utilities information required to run our business. Furthermore, we may require the data centers we lease to have certain highly specific attributes in order to effectively run our business. For example, our state-of-the art data centers may also require networking equipment, high-speed interconnects, enhanced access to power, and liquid cooling infrastructure. In some cases, these third-party data centers are required to undergo extensive retrofitting and improvement efforts, including to incorporate novel developments in our industry, which are time consuming, expensive, and less efficient than if we were to lease from spaces already designed for our operations, and which may not ultimately be successful in meeting all of our requirements. If third parties fail to successfully deliver on such performance requirements, our ability to maintain the performance of our network would be negatively impacted.

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Other factors, many of which are beyond our control, that can affect the delivery, performance, and availability of our platform include:

● the development, maintenance, and functioning of the infrastructure of the internet as a whole;

● the performance and availability of third-party telecommunications services with the necessary speed, data capacity, and security for providing reliable internet access and services;

● the success or failure of our redundancy systems;

● the success or failure of our disaster recovery and business continuity plans;

● decisions by the owners and operators of the data center facilities where our infrastructure is installed or by global telecommunications service provider partners who provide us with network bandwidth to terminate our contracts, discontinue services to us, shut down operations or facilities, increase prices, change service levels, limit bandwidth, declare bankruptcy, breach their contracts with us, or prioritize the traffic of other parties;

● our ability to enter into data center agreements and leases according to our business needs and on terms and with counterparties acceptable to us; and

● changing sentiment by government regulators relating to data center development, including in response to public concerns regarding environmental impact and development, which may result in restrictive government regulation or otherwise impact the future construction of additional data centers.

In addition, many of the leases we have entered into for data centers have multi-year terms and fixed capacity. If we do not accurately anticipate the data center capacity required by our customers, including if they use less or more of our infrastructure than expected, we would incur additional costs due to leasing more capacity than is used and paid for by our customers or, alternatively, in seeking additional data center capacity to fulfill unexpected demand on terms that may not be economically reasonable or acceptable to us, if we are able to lease additional capacity at all. We may also need to seek additional data center capacity in the event any leases with third parties are terminated or not renewed, which we may be unable to do on reasonable terms or at all.

The occurrence of any of these factors, or our inability to efficiently and cost-effectively fix such errors or other problems that may be identified, could damage our reputation, negatively impact our relationship with our customers, or otherwise materially harm our business, operating results, financial condition, and future prospects.

 ***Our blockchain mining operations expose us to risks that could materially adversely affect our business, operating results, financial condition, and future prospects.***

Although our primary focus is building infrastructure for AI and high-performance computing, and although we are continuing to shift our business towards building infrastructure for AI and high-performance computing, we continue to operate a limited portfolio of bitcoin mining and hosting assets. These operations carry unique risks and are highly cyclical in nature, with a market downturn on average every three to four years. Bitcoin mining requires substantial upfront and ongoing investment in specialized hardware (application-specific integrated circuits ("ASICs")), which can become obsolete quickly as newer, more efficient models are introduced. Profitability is highly volatile and depends on factors outside of our control, including the market price of bitcoin, the availability and cost of electricity, and network mining difficulty. Our mining facilities consume significant amounts of power, exposing us to the risk of higher energy costs, curtailment during peak demand, or pressure from regulators and communities regarding environmental and noise concerns. Furthermore, if our mining operations fail to remain competitive with larger or more efficient miners, or if regulatory changes impose restrictions on proof-of-work mining, we may experience lower returns or be forced to scale back this business line. Because our blockchain mining activities represent a non-core but ongoing part of our operations, adverse developments in this area could still impact our financial results and reputation.

***A substantial portion of our hosting revenue is driven by a limited number of our customers, and the loss of, or a significant reduction in, spend from one or a few of our top customers would adversely affect our business, operating results, financial condition, and future prospects.***

A substantial portion of our hosting revenue is driven by a limited number of customers. Hosting revenue represented 51% and 48% of our total revenue for the years ended December 31, 2025 and 2024, respectively, and the remaining portion was derived from our cryptocurrency mining activities. We recognized an aggregate of approximately 100% and 99% of our hosting revenue from three customers for the years ended December 31, 2025 and 2024, respectively. Any negative changes in demand from these customers, in their ability or willingness to perform under their contracts with us, in laws or regulations applicable to them or the regions in which they operate, or in our broader strategic relationship with these customers would adversely affect our business, operating results, financial condition, and future prospects. We anticipate that we will continue to derive a significant portion of our revenue from a limited number of customers for the foreseeable future for hosting revenue, and in some cases, the portion of our revenue attributable to certain customers may increase in the future. The composition of our customer base, including our top customers, may fluctuate from period to period given that our customer composition has evolved and is expected to continue to evolve significantly as our business continues to evolve and scale and as the use cases for AI continue to develop. However, we may not be able to maintain or increase revenue from our top customers for a variety of reasons, including the following:

● customers may develop their own infrastructure that may compete with our services;

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● some of our customers may redesign their systems to require fewer of our services with limited notice to us and may choose not to renew or increase their purchases of our platform, solutions, and services; and

● our customers may have pre-existing or concurrent relationships with, or may be, current or potential competitors that may affect such customers' decisions to purchase our platform, solutions, and services.

Customer relationships often require us to continually improve our platform, which may involve significant technological and design challenges, and our customers may place considerable pressure on us to meet tight development and capacity availability schedules. Accordingly, we may have to devote a substantial amount of our resources to our strategic relationships, which could detract from or delay our completion of other important development projects. Delays in making capacity available could impair our relationships with our customers and negatively impact forecasted sales of the services under development. Moreover, it is possible that our customers may develop their own infrastructure that may compete with our services or adopt a competitor's infrastructure for services that they currently buy from us. If that happens, our revenue would be adversely impacted and our business, operating results, financial condition, and future prospects would be materially and adversely affected.

***A substantial portion of our current GPUaaS revenue is generated through a single channel partner, and the loss or deterioration of this relationship would adversely affect our business.***

A majority of our GPUaaS revenue is generated through our relationship with RunPod Inc. ("RunPod"), our largest channel partner. RunPod manages orchestration and customer acquisition for our servers on its platform, and revenue from these customers is shared on an 80% QumulusAI / 20% RunPod basis under RunPod's standard service terms. RunPod accounted for 95% of the GPUaaS revenue of The Cloud Minders, Inc. ("TCM") in 2024 and 99% for the first quarter of 2025. Subsequent to QumulusAI's acquisition of TCM, RunPod contributed 85.7% of GPUaas revenue for the period from April 1 through December 31, 2025. If our relationship with RunPod were to terminate, be renegotiated on less favorable terms, or if RunPod were to experience operational or financial difficulties, our business, operating results, financial condition, and future prospects would be materially adversely affected. While we are working to diversify our sales channels and increase the proportion of direct enterprise customers, there is no assurance that we will be able to do so in a timely manner or at all.

***If we fail to efficiently enhance our platform and develop and sell new solutions and services and respond effectively to rapidly changing technology, evolving industry standards, changing regulations, and changing customer needs, requirements, or preferences, our platform may become less competitive.***

The market in which we compete is relatively new and subject to rapid technological change, evolving industry standards and regulatory changes, as well as changing customer needs, requirements, and preferences. The success of our business will depend, in part, on our ability to predict, adapt, and respond effectively to these changes on a timely basis. If we are unable to develop and sell new solutions and services that satisfy and are adopted by new and existing customers and provide enhancements, new features, and capabilities to our infrastructure that keep pace with rapid technological and industry change, our business, operating results, financial condition, and future prospects could be adversely affected. Further, prospective or existing customers may influence our product roadmap by requiring features optimal for their particular use case. If we are unable to adapt to meet customers' requirements, they may use competitive offerings or internal solutions that eliminate reliance on third-party providers, and our business, operating results, financial condition, and future prospects could be adversely affected. Moreover, prioritizing development of such features may require significant engineering resources and may not be compatible with the requirements of other customers, which could impact overall adoption of our platform. If new technologies emerge that limit or eliminate reliance on AI cloud platform providers like us, or that enable our competitors to deliver competitive services at lower prices, more efficiently, more conveniently, or more securely, such technologies could adversely impact our ability to compete. If our solutions do not allow us or our customers to comply with the latest regulatory requirements, sales of our platform, solutions, and services to existing customers may decrease and new customers will be less likely to adopt our platform.

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Our future growth is dependent upon our ability to continue to meet the needs of new customers and the expanding needs of our existing customers as their use of our platform, solutions, and services grows. As sales of our platform grow, we will need to devote additional resources to expanding, improving, and maintaining our infrastructure and integrating with third-party applications. In addition, we will need to appropriately scale our internal business systems and our services organization, including customer support, to serve our growing customer base, and to improve our IT and financial infrastructure, operating and administrative systems, and our ability to effectively manage headcount, capital and processes, including by reducing costs and inefficiencies. Any failure of, or delay in, these efforts could result in impaired system performance and reduced customer satisfaction, which would negatively impact our revenue growth and our reputation. We may not be successful in developing or implementing these technologies. In addition, it takes a significant amount of time to plan, develop, and test improvements to our technologies and infrastructure, and we may not be able to accurately forecast demand or predict the results we will realize from such improvements. In some circumstances, we may also determine to scale our technology through the acquisition of complementary businesses and technologies rather than through internal development, which may divert management's time and resources. To the extent that we do not effectively scale our operations to meet the needs of our growing customer base and to maintain performance as our customers expand their use of our services, we will not be able to grow as quickly as we anticipate, our customers may reduce or terminate use of our platform and we will be unable to compete as effectively and our business, operating results, financial condition, and future prospects will be adversely affected.

We continually work to upgrade and enhance our platform, solutions, and services in response to customer demand and to keep up with technological changes. Part of this process entails cycling out outdated components of our infrastructure and replacing them with the latest technology available. This requires us to make certain estimates with respect to the useful life of the components of our infrastructure and to maximize the value of the components of our infrastructure, including our GPUs, to the fullest extent possible. We cannot guarantee that our estimates will be accurate or that our attempts at maximizing value will be successful. Any changes to the significant assumptions underlying our estimates or to the estimates of our components' useful lives, or any inability to redeploy components of our existing infrastructure to extend past their contracted life could significantly affect our business, operating results, financial condition, and future prospects.

Our platform must also integrate with a variety of network, hardware, storage, and software technologies, and we need to continuously modify and enhance the capabilities of our platform to adapt to changes and innovation in these technologies. If our customers widely adopt new technologies, we may need to redesign parts of our platform to work with those new technologies. These development efforts may require significant engineering, marketing, and sales resources, all of which would affect our business, operating results, financial condition, and future prospects. Any failure of our infrastructure's capabilities to operate effectively with future technologies and software platforms could reduce the demand for our platform. If we are unable to respond to these changes in a cost-effective manner, our platform may become less marketable and less competitive or obsolete, and our business may be harmed.

As part of adapting to these technology shifts, our future infrastructure strategy contemplates the use of immersion cooling for our GPU and blockchain equipment. While immersion cooling offers potential efficiency and density gains, it is an emerging technology with limited industry standards or regulatory frameworks. Variability in fluid chemistry, enclosure design, and safety protocols could create reliability, safety, or compliance risks. Dielectric fluids used in immersion cooling can degrade or become contaminated, potentially damaging hardware and reducing cooling efficiency. Not all GPUs, ASICs, or motherboards are designed or warranted for immersion environments, and modifying hardware for such use may void warranties or accelerate component failure. In addition, immersion cooling requires specialized operational expertise, and errors in handling or system maintenance could result in downtime, asset damage, or safety hazards. Although dielectric fluids are generally fire-resistant, improper handling or system failure could still create environmental or fire risks, which may not be fully covered by existing insurance policies. Furthermore, the limited availability of proprietary fluids and components presents potential supply chain constraints. Any of these factors could increase costs, reduce reliability, or impair our ability to deliver consistent performance to customers.

In addition, we must also continue to effectively manage our capital expenditures by maintaining and expanding our data center capacity, servers and equipment, grow in geographies where we currently have limited or no presence, and ensure that the performance, features, and reliability of our services and our customer service remain competitive in a rapidly changing technological environment. If we fail to manage our growth, the quality of our platform may suffer, which could negatively affect our brand and reputation and harm our ability to retain and attract customers and employees.

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***The broader adoption, use, and commercialization of AI technology, and the continued rapid pace of developments in the AI field, are inherently uncertain. Failure by our customers to continue to use our platform to support AI use cases in their systems, or our ability to keep up with evolving AI technology requirements and regulatory frameworks, could have a material adverse effect on our business, operating results, financial condition, and future prospects.***

As part of our growth strategy, we seek to attract and acquire customers requiring high-performance computing, such as AI, machine learning, and automated decision-making technologies, including proprietary AI algorithms and models (collectively, "AI Technologies").

AI has been developing at a rapid pace, and continues to evolve and change. As demand continues for AI services, AI providers, including our customers, have sought increased compute capacity to enable advancements in their AI models and service the demands of end users. We cannot predict whether additional computing power will continue to be required to develop larger, more powerful AI models, or if the practical limits of AI technology will plateau in the future regardless of available compute capacity. Further, there have been recent advancements in AI technology, including open-source AI models, that may lead to compute and other efficiencies that may impact the demand for AI services, including our platform, solutions, and services, which may adversely impact our revenue and profitability. In the event that existing scaling laws do not continue to apply as they have in the past, demand by our customers for compute resources, including our solutions and services, may not continue to increase over time, or may decrease if overall demand for AI is impacted by a lack of further technological development. If we are unable to keep up with the changing AI landscape or in developing services to meet our customers' evolving AI needs, or if the AI landscape does not develop to the extent we or our customers expect, our business, operating results, financial condition, and future prospects may be adversely impacted.

Additionally, we may incur significant costs and experience significant delays in developing new solutions and services or enhancing our current platform to adapt to the changing AI landscape, and may not achieve a return on investment or capitalize on the opportunities presented by demand for AI solutions. Moreover, while AI adoption is likely to continue and may accelerate, the long-term trajectory of this technological trend is uncertain. Further, market acceptance, understanding, and valuation of solutions and services that incorporate AI Technologies are uncertain and the perceived value of AI Technologies used and/or provided by our customers could be inaccurate. If AI is not broadly adopted by enterprises to the extent we expect, or if new use cases do not arise, then our opportunity may be smaller than we expect. Further, if the consumer perception and perceived value of AI Technologies is inaccurate this could have a material adverse effect on our customers, which in turn could have a material adverse effect on our business, operating results, financial condition, and future prospects.

Concerns relating to the responsible use by our customers of new and evolving technologies, such as AI, which are supported by our platform, may result in collateral reputational harm to us. AI may pose emerging ethical issues and if our platform enables customer solutions that draw controversy due to their perceived or actual impact on society, we may experience brand or reputational harm, competitive harm, or legal liability.

Furthermore, the rapid pace of innovation in the field of AI has led to developing and evolving regulatory frameworks globally, which are expected to become increasingly complex as AI continues to evolve. Regulators and lawmakers around the world have started proposing and adopting, or are currently considering, regulations and guidance specifically on the use of AI. Regulations related to AI Technologies have been introduced in the United States at the federal level and are also enacted and advancing at the state level. Additional regulations may impact our customers' ability to develop, use and commercialize AI Technologies, which would impact demand for our platform, solutions, and services and may affect our business, operating results, financial condition, and future prospects.

AI and related industries, including cloud services, are under increasing scrutiny from regulators due to their concerns about market concentration, anti-competitive practices, and the pace of partnerships and acquisitions involving generative AI startups. As the industry continues to grow, transactions and business conduct will likely continue to draw scrutiny from regulators. Our customers may become subject to further AI regulations, including any restrictions on the total consumption of compute technology, which could cause a delay or impediment to the commercialization of AI technology and could lead to a decrease in demand for our customers' AI infrastructure, and may adversely affect our business, operating results, financial condition, and future prospects.

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***Our operations require substantial capital expenditures, and we will require additional capital to fund our business and support our growth, and any inability to generate or obtain such capital on acceptable terms, if at all, or to lower our total cost of capital, may adversely affect our business, operating results, financial condition, and future prospects.***

We require substantial capital expenditures to support our growth and respond to business challenges. We have made significant financial investments in our business, and we intend to continue to make such investments in the future, including expenditures to procure components for, maintain, upgrade, and enhance our platform, including costs related to obtaining third-party chips and leasing and maintaining, enhancing, and expanding our data centers. While we have historically been able to fund capital expenditures from cash generated from operations, equity and debt financings, and borrowings under our term loan facilities, factors outside of our control, including those described in this "*Risk Factors*" section, and particularly those under "—*Risks Related to Our Indebtedness*," could materially reduce the cash available from operations, impede our ability to raise additional capital, or significantly increase our capital expenditure requirements, which may result in our inability to fund the necessary level of capital expenditures to maintain and expand our operations. Additionally, we have in the past and may in the future have more immediate expansion opportunities than we have capital to fund. These factors could adversely affect our business, operating results, financial condition, and future prospects.

Additional financing may not be available on terms favorable to us, if at all. If adequate financing is not available on acceptable terms, we may be unable to invest in future growth opportunities, which could harm our business, operating results, financial condition, and future prospects. If we raise additional funds through equity or convertible debt issuances, our existing shareholders may suffer significant dilution and these securities could have rights, preferences, and privileges that are superior to those of holders of our common stock. If we obtain additional funds through debt financing, we may not be able to obtain such financing on terms favorable to us. Further, the current global macroeconomic environment could make it more difficult to raise additional capital on favorable terms, if at all. Such terms may involve restrictive covenants making it difficult to engage in capital raising activities and pursue business opportunities, including potential acquisitions. The trading prices of recently-public companies have been highly volatile as a result of multiple factors including, the conflicts in the Middle East and Ukraine and tensions between China and Taiwan, inflation, trade restrictions such as tariffs, interest rate volatility, actual or perceived instability in the banking system, and market downturns, which may reduce our ability to access capital on favorable terms or at all. In addition, a recession, depression, or other sustained adverse market event could adversely affect our business and the value of our common stock. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly impaired and our business may be adversely affected, requiring us to delay, reduce, or eliminate some or all of our operations. Even if we are able to raise such capital, we cannot guarantee that we will deploy it in such a fashion that allows us to achieve better operating results or grow our business.

Moreover, in order to fund investments in our infrastructure, we have pioneered and scaled innovative financing structures that have enabled us to grow our business through timely and flexible access to capital, such as our guidance facility with Permian Labs described under "*Management*'*s Discussion and Analysis of Financial Condition and Results of Operations*—*Recent Developments*." While we expect our cost of capital to continue declining as we benefit from economies of scale and access new forms of financing, including asset backed securitizations and rated parent-level debt, our ability to lower our cost of capital depends upon a number of factors, many of which are beyond our control, including broader macroeconomic conditions. If we are unable to continue lowering our cost of capital, our ability to effectively compete, especially with larger competitors that have greater financial and other resources, as well as our operating results, financial condition, and business, may be adversely impacted.

***Our operating results may fluctuate significantly, which could make our future results difficult to predict and could cause our operating results to fall below expectations.***

Our operating results have varied significantly from period to period in the past, and we expect that our operating results will continue to vary significantly in the future such that period-to-period comparisons of our operating results may not be meaningful. In addition, in future periods, we may experience fluctuations in remaining performance obligations, given the nature of our committed contract business, the size of those contracts, and period-to-period variation in new business signed and revenue recognized from existing contracts. This could adversely affect our business, operating results, financial condition, and future prospects. Accordingly, our financial results in any one quarter should not be relied upon as indicative of future performance. Fluctuations in quarterly results may negatively impact the trading price of our common stock. Our quarterly financial results may fluctuate as a result of a number of factors, many of which are outside of our control and may be difficult to predict, including, without limitation:

● the amount and timing of operating costs and capital expenditures related to the expansion of our business;

● any power outages, shortages, supply chain issues, capacity constraints, or significant increases in the cost of securing power;

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● general global macroeconomic and political conditions that could impact some or all regions where we operate, including global economic slowdowns, actual or perceived global banking and finance related issues, increased risk of inflation, trade restrictions such as tariffs, potential uncertainty with respect to the federal debt ceiling and budget and government shutdowns related thereto, interest rate volatility, supply chain disruptions, labor shortages, increases in energy costs and potential global recession;

● the impact of natural or man-made global events on our business, including wars and other armed conflict, such as the conflicts in the Middle East and Ukraine and tensions between China and Taiwan;

● changes in our legal or regulatory environment, including developments in regulations relating to AI and machine learning;

● our ability to attract new and retain existing customers, increase sales of our platform, or sell additional solutions and services to existing customers;

● the budgeting cycles, seasonal buying patterns, and purchasing practices of customers;

● the timing and length of our sales cycles;

● changes in customer requirements or market needs;

● changes in the growth rate of the cloud infrastructure market generally;

● the timing and success of new solution and service introductions by us or our competitors or any other competitive developments, including consolidation among our customers or competitors;

● any disruption in our strategic relationships;

● our ability to successfully expand our business domestically and internationally;

● equity or debt financings and the capital markets environment, including interest rate changes;

● our ability to reduce our cost of capital over time;

● decisions by organizations to purchase specialized AI cloud infrastructure from larger, more established vendors;

● our ability to successfully and timely deliver our solutions and services to customers under our committed contracts, including due to data center lead times;

● our ability to successfully and timely deploy launches of additional data centers;

● the timing and success of the integration of new infrastructure, including new GPU generations, into our platform;

● changes in our pricing policies or those of our competitors;

● insolvency or credit difficulties confronting our customers, including bankruptcy or liquidation, due to individual, macroeconomic, and regulatory factors, including those specifically impacting early-stage AI ventures, affecting their ability to purchase or pay for our platform;

● significant security breaches of, technical difficulties with, or interruptions to, the use of our platform or other cybersecurity incidents;

● extraordinary expenses such as litigation or other dispute-related settlement payments or outcomes, taxes, regulatory fines or penalties;

● the timing of revenue recognition and revenue deferrals;

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● future accounting pronouncements or changes in our accounting policies or practices;

● negative media coverage or publicity; and

● increases or decreases in our expenses due to supply chain availability and tariffs, among other factors.

Any of the above factors, individually or in the aggregate, could result in significant fluctuations in our financial condition, cash flows, and other operating results from period to period.

***We face intense competition and could lose market share to our competitors, which would adversely affect our business, operating results, financial condition, and future prospects.***

The market for AI cloud infrastructure and software is intensely competitive and is rapidly evolving, characterized by changes in technology, customer requirements, industry standards, regulatory developments, and frequent introductions of new or improved solutions and services. Key competitors that offer general purpose cloud computing as part of a broader, diversified product portfolio include Amazon (AWS), Google (Google Cloud Platform), IBM, Microsoft (Azure), and Oracle, a number of which are concurrent providers of high-performance computing ("HPC") resources to our customers. We also compete with emerging infrastructure providers focused on AI, including Coreweave, Crusoe and Lambda. We expect to continue to face intense competition from current competitors, including as our competitors complete strategic acquisitions or form cooperative relationships and/or customer requirements evolve, as well as from new entrants into the market. If we are unable to anticipate or react to these challenges, our competitive position could weaken, and we would experience a decline in revenue or reduced revenue growth, and loss of market share that could adversely affect our business, operating results, financial condition, and future prospects.

Our ability to compete effectively depends upon numerous factors, many of which are beyond our control, including, but not limited to:

● changes in customer or market needs, requirements, and preferences and our ability to fulfill those needs, requirements, and preferences;

● our ability to expand and augment our platform, including through infrastructure and new technologies, or increase sales of our platform;

● any power outages, shortages, supply chain issues, capacity constraints, or significant increases in the cost of securing power;

● our ability to attract, train, retain, and motivate talented employees;

● our ability to retain existing customers and increase sales to existing customers, as well as attract and retain new customers;

● the budgeting cycles, seasonal buying patterns, and purchasing practices of our customers, including any slowdown in technology spending due to U.S. and general global macroeconomic conditions;

● price competition;

● stagnation in the adoption rate or changes in the growth rate of AI and AI cloud infrastructure sectors, including due to emerging AI technologies, which may lead to further compute efficiencies;

● the timing and success of new solution and service introductions by us or our competitors, including new competing technologies that may displace cloud infrastructure, or any other change in the competitive landscape of our industry, including consolidation among our competitors or customers and strategic partnerships entered into by and between our competitors;

● changes in our mix of solution and services sold, including changes in the average contracted usage of our platform;

● our ability to successfully and continuously expand our business;

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● our ability to secure necessary funding;

● deferral of orders from customers in anticipation of new or enhanced solutions and services announced by us or our competitors;

● significant security breaches or, technical difficulties with, or interruptions to the use of our platform, including data security;

● the timing and costs related to the development or acquisition of technologies or businesses or entry into strategic partnerships;

● our ability to execute, complete, or efficiently integrate any acquisitions that we may undertake;

● increased expenses, unforeseen liabilities, or write-downs and any impact on our operating results from any acquisitions we consummate;

● our ability to increase the size and productivity of our sales teams;

● decisions by potential customers to purchase cloud infrastructure and associated services from larger, more established technology companies;

● insolvency or credit difficulties confronting our customers, which could increase due to U.S. and global macroeconomic issues and which would adversely affect our customers' ability to purchase or pay for our platform in a timely manner or at all;

● the cost and potential outcomes of litigation, regulatory investigations or actions, or other proceedings, which could have a material adverse effect on our business;

● future accounting pronouncements or changes in our accounting policies;

● increases or decreases in our expenses caused by due to supply chain availability and tariffs, among other factors;

● our ability to comply with applicable domestic and international regulations and laws and to obtain the necessary licenses to conduct our business;

● general global macroeconomic and political conditions that could impact our operations, including global economic slowdowns, actual or perceived global banking and finance related issues, increased risk of inflation, trade restrictions such as tariffs, potential uncertainty with respect to the federal debt ceiling and budget and government shutdowns related thereto, interest rate volatility, supply chain disruptions, labor shortages, and potential global recession; and

● the impact of natural or man-made global events on our business, including outbreaks of contagious diseases or pandemics and wars and other armed conflicts, such as the conflicts in the Middle East and Ukraine and the tensions between China and Taiwan.

Many of our competitors have greater financial, technical, marketing, sales, and other resources, greater name recognition, longer operating histories, and a larger base of customers than we do. Our competitors may be able to devote greater resources to the development, promotion, and sale of their solutions and services than we can, and they may offer lower pricing than we do or bundle certain competing solutions and services at lower prices. Our competitors may also have greater resources for research and development of new technologies, customer support, and to pursue acquisitions, and they have other financial, technical, or other resource advantages. Our larger competitors have substantially broader and more diverse solution and service offerings and more mature distribution and go-to-market strategies, which allows them to leverage their existing customer relationships and any distributor relationships to gain business in a manner that discourages potential customers from purchasing our platform. Further, our current and future competitors may include our customers and suppliers, if any of these customers or suppliers were to cease purchasing services from us or supplying us with components as a result, our business, operating results, financial condition, and future prospects could be adversely affected.

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Conditions in our market could change rapidly and significantly as a result of technological advancements, including but not limited to increased advancements and proliferation in the use of AI and machine learning, partnerships between or acquisitions by our competitors, or continuing market consolidation, including consolidation of potential or existing customers with our competitors. Some of our competitors have recently made or could make acquisitions of businesses or have established cooperative relationships that may allow them to offer more directly competitive and comprehensive solutions and services than were previously offered and adapt more quickly to new technologies and customer needs. These competitive pressures in our market or our failure to compete effectively may result in price reductions, fewer orders, reduced revenue and operating margin, increased net losses, and loss of market share.

Even if there is significant demand for specialized AI cloud infrastructure like ours, if our competitors include functionality that is, or is perceived to be, equivalent to or better than ours in legacy solutions and services that are already generally accepted as necessary components of an organization's operational architecture, we may have difficulty increasing the market penetration of our platform. Furthermore, even if the functionality offered by other cloud infrastructure providers is different and more limited than the functionality of our platform, organizations may elect to accept such limited functionality in lieu of purchasing our solutions and services. If we are unable to compete successfully, or if competing successfully requires us to take aggressive action with respect to pricing or other actions, our business, operating results, financial condition, and future prospects would be adversely affected.

***A network or data security incident against us, or our third-party providers, whether actual, alleged, or perceived, could harm our reputation, create liability and regulatory exposure, and adversely impact our business, operating results, financial condition, and future prospects.***

Companies are subject to an increasing number, and wide variety, of attacks on their networks on an ongoing basis. Traditional computer "hackers," malicious code (such as viruses and worms), phishing attempts, ransomware, account takeover, business email compromise, employee fraud or bad actors, theft or misuse, denial of service attacks, misconfigurations, bugs, or other vulnerabilities in commercial software that is integrated into our (or our suppliers' or service providers') IT systems, and sophisticated nation-state sponsored actors engage in cyber intrusions and attacks that create risks for our infrastructure and the data, including personal information, which it hosts and transmits. State-supported and geopolitical-related cyberattacks may rise in connection with regional geopolitical conflicts such as the conflicts in the Middle East and Ukraine and tensions between China and Taiwan. Moreover, the ongoing war in Ukraine and associated activities in Russia as well as the war in Iran have increased the risk of cyberattacks on various types of infrastructure and operations. The war in Iran, in particular, has increased the risk for disruptive data center attacks, both physical and cyber, as cloud infrastructure is being targeted. Additionally, bad actors are beginning to utilize AI-based tools to execute attacks, creating unprecedented cybersecurity challenges. We may be a valuable target for cyberattacks given the critical data which we host and transmit.

Although we have implemented security measures designed to prevent such attacks, including a review of our third-party providers' measures, we cannot guarantee that such measures will operate effectively to protect our and our third-party providers' infrastructure, systems, networks, and physical facilities from breach due to the actions of outside parties or human error, malfeasance, insider threats, system errors or vulnerabilities, insufficient cybersecurity controls, a combination of the foregoing, or otherwise, and as a result, an unauthorized party may obtain access to our, our third-party providers' or our customers' systems, networks, or data. The techniques used to obtain unauthorized access to systems or sabotage systems, or disable or degrade services, change frequently and are often unrecognizable until launched against a target, and therefore we may be unable to anticipate these techniques and implement adequate preventative measures. Our servers may be vulnerable to computer viruses or physical or electronic break-ins that our security measures may not detect. Protecting our own assets has become more expensive and these costs may increase as the threat landscape increases, including as a result of use by bad actors of AI. We may face difficulties or delays in identifying or otherwise responding to any attacks or actual or potential security breaches or threats. These risks are exacerbated by developments in generative AI. A breach in our or our third-party providers' data security or an attack against our platform could and have impacted our infrastructure and systems, creating system disruptions or slowdowns and providing access to malicious parties to information hosted and transmitted by our infrastructure, resulting in data, including the data of our customers, being publicly disclosed, misused, altered, lost, or stolen, which could subject us to liability and reputational harm and adversely affect our financial condition. While to date no incidents have had a material impact on our operations or financial results, we cannot guarantee that material incidents will not occur in the future. If compromised, our own systems could be used to facilitate or magnify an attack. Further, the increase in remote work by companies and individuals in recent years has generally increased the attack surface available to bad actors for exploitation, and as such, the risk of a cybersecurity incident potentially occurring has increased.

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Any actual, alleged, or perceived security breach in our third-party providers' or partners' systems or networks, or any other actual, alleged or perceived data security breach that we or our third-party providers or partners suffer, could result in damage to our reputation, negative publicity, loss of customers and sales, loss of competitive advantages over our competitors, increased costs to remedy any problems and otherwise respond to any incident, regulatory investigations and enforcement actions, fines and penalties, costly litigation (including class actions), and other liability. We would also be exposed to a risk of loss or litigation and potential liability under laws, regulations, and contracts that protect the privacy and security of personal information. For a description of the privacy and security laws, regulations and other industry requirements to which our business is subject, see the risk factor below "—*We are subject to laws, regulations, and industry requirements related to data privacy, data protection and information security, and user protection across different markets where we conduct our business and such laws, regulations, and industry requirements are constantly evolving and changing. Any actual or perceived failure to comply with such laws, regulations, and industry requirements, or our privacy policies, could harm our business*."

Due to concerns about data security and integrity, a growing number of legislative and regulatory bodies have adopted breach notification and other requirements in the event that information subject to such laws is accessed by unauthorized persons and additional regulations regarding security of such data are possible. We may need to notify governmental authorities and affected individuals with respect to such incidents. For example, laws in the United States may require businesses to provide notice to individuals whose personal information has been disclosed as a result of a data security breach. Complying with such numerous and complex regulations in the event of a data security breach can be expensive and difficult, and failure to comply with these regulations could subject us to regulatory scrutiny and additional liability. In addition, certain of our customer agreements, as well as privacy laws, may require us to promptly report security incidents involving our systems or those of our third-party partners that compromise the security, confidentiality, or integrity of certain processed customer data. Regardless of our contractual protections, these mandatory disclosures could be costly, result in litigation, harm our reputation, erode customer trust, and require significant resources to mitigate issues stemming from actual or perceived security breaches.

Our cybersecurity insurance is anticipated to be effective in the second quarter of fiscal 2026; however, there can be no guarantee that any or all costs or losses incurred will be partially or fully recouped from such insurance, or that such insurance will be available on economically reasonable terms or will adequately address all potential losses.

We may also incur significant financial and operational costs to investigate, remediate, eliminate, and put in place additional tools and devices designed to prevent actual or perceived security breaches and other security incidents, as well as costs to comply with any notification obligations resulting from any security incidents. Any of these negative outcomes could adversely affect the market perception of infrastructure and customer and investor confidence in our company, and would adversely affect our business, operating results, financial condition, and future prospects.

Further, from time to time, government entities (including law enforcement bodies) may in the future seek our assistance with obtaining access to our customers' data. Although we strive to protect the privacy of our customers, we may be required from time to time to provide access to customer data to government entities. In light of our privacy commitments, although we may legally challenge law enforcement requests to provide access to our systems or other customer content, we may nevertheless face complaints that we have provided information improperly to law enforcement or in response to non-meritorious third-party complaints. We may experience adverse political, business, and reputational consequences, to the extent that we do not provide assistance to or comply with requests from government entities in the manner requested or challenge those requests publicly or in court or provide, or are perceived as providing, assistance to government entities that exceeds our legal obligations. Any such disclosure could significantly and adversely impact our business and reputation.

***We have a history of generating net losses as a result of the substantial investments we have made to grow our business and develop our platform, anticipate increases in our operating expenses in the future, and may not achieve or, if achieved, sustain profitability. If we cannot achieve and, if achieved, sustain profitability, our business, operating results, financial condition, and future prospects will be adversely affected.***

We incurred net losses of $4,459,879 and $13,184,374 for the years ended December 31, 2025 and 2024, respectively, and we may not achieve or, if achieved, sustain profitability in the future. As of December 31, 2025, we had an accumulated deficit of $37,546,254. While we have experienced significant growth in revenue from 2024 to 2025, we cannot predict whether we will maintain this level of growth or when we will achieve profitability. We also expect our operating expenses to increase in the future, including our general and administrative expenses as a result of increased costs associated with operating as a public company and as we continue to invest for our future growth, including expanding our research and development function to drive further development of our platform, continuing to invest in the technology infrastructure underlying our platform and data center expansion, expanding our sales and marketing activities, developing the functionality to expand into adjacent markets, and reaching customers in new geographic locations and new verticals, which will negatively affect our operating results if our total revenue does not increase.

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Our operating efficiencies may decrease as we scale, and our revenue growth may slow as we grow. Our revenue could also decline for a number of other reasons, including reduced demand for our offerings, increased competition, a decrease in the growth or reduction in size of our overall market, or if we cannot capitalize on growth opportunities, including acquisitions and through new and enhanced solutions and services. Furthermore, to the extent our anticipated cash payback period is longer than we expect, or if we fail to maintain or increase our revenue to offset increases in our operating expenses or manage our costs as we invest in our business, including if we do not maintain or improve our operating efficiencies, we may not achieve or sustain profitability, and if we cannot achieve and sustain profitability, our business, operating results, financial condition, and future prospects will be adversely affected.

***We make substantial investments in our technology and infrastructure and unsuccessful investments could materially adversely affect our business, operating results, financial condition, and future prospects.***

The industry in which we compete is characterized by rapid technological change, changes in customer requirements, frequent new product and service introductions and enhancements, short product cycles, and evolving industry standards. In order to remain competitive, we have made, and expect to continue to make, significant investments in our technology and infrastructure. If we fail to further develop our platform or develop new and enhanced solutions, services, and technologies, if we focus on technologies that do not become widely adopted, or if new competitive technologies or industry standards that we do not support become widely accepted, demand for our solutions and services may be reduced. Increased investments in technology and infrastructure or unsuccessful improvement efforts could cause our cost structure to fall out of alignment with demand for our solutions and services, which would have a negative impact on our business, operating results, financial condition, and future prospects.

***Our platform is complex and performance problems or defects associated with our platform may adversely affect our business, operating results, financial condition, and future prospects.***

It may become increasingly difficult to maintain and improve our platform performance, especially during peak demand spikes and as our customer base grows and our platform becomes more complex. If our platform is unavailable or if our customers are unable to access our platform within a reasonable amount of time or at all, we could experience a loss of customers, lost or delayed market acceptance of our platform, delays in payment to us by customers or issuance of credits to impacted customers, injury to our reputation and brand, warranty and legal claims against us, significant cost of remedying these problems, and the diversion of our resources. For example, in the past, we have experienced insufficient power to service a customer's project and have been required to provide service credits to that customer due to resulting performance issues. Additionally, we previously held a contract with Washington, Georgia, which provided for power at a fixed rate. We received notice that the city could no longer honor the contract rate as it would bankrupt the city, contrary to state law. This rendered continued operations at that location commercially impractical and led us to sell the site to another company. Similar municipal and state rules could cause other contracts to become null and void, which may cause us to have access to insufficient power, which may prevent us from serving our customers. In addition, to the extent that we do not effectively address capacity constraints, upgrade our systems as needed, and continually develop our technology and network architecture to accommodate actual and anticipated changes in technology, our business, operating results, financial condition, and future prospects, as well as our reputation, may be adversely affected.

Further, the hardware and software technology underlying our platform is inherently complex and may contain material defects or errors, particularly when new solutions and services are first introduced or when new features or capabilities are released. We have from time to time found defects or errors in our platform, and new defects or errors may be detected in the future by us or our customers. We cannot ensure that our platform, including any new solutions and services that we release, will not contain defects. Any real or perceived errors, failures, vulnerabilities, or bugs in our platform could result in negative publicity or lead to data security, access, retention, or other performance issues, all of which could harm our business. We also rely on third-party suppliers for the most significant components of the equipment we use to operate our infrastructure. These third-party suppliers may also experience defects or errors in the products that we utilize in our platform, which would impact our platform and may result in performance problems or service interruptions. The costs incurred in correcting any such defects or errors, including those in third-party components, may be substantial and could harm our business. Moreover, the harm to our reputation and legal liability related to such defects or errors may be substantial and could similarly harm our business.

In addition, most of our customer agreements and terms of service contain service level commitments. If we are unable to meet the stated service level commitments due to performance problems or defects, we may be contractually obligated to provide the affected customers with service credits or refunds, which could significantly affect our revenue in the periods in which any issues occur and the credits or refunds are applied. As a result of degradation of service and interruptions to our platform, we have provided, and may continue to provide, service credits and/or refunds to certain of our affected customers with whom we had service level commitments. We could also face customer terminations with refunds of prepaid amounts, which could significantly affect both our current and future revenues. Any service level failures could harm our business.

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***Any failure of our IT systems or those of one or more of our IT service providers, business partners, vendors, suppliers, or other third-party service providers, or any other failure by such third parties to provide services to us may negatively impact our relationships with customers and harm our business.***

Our business depends on various IT systems and outsourced IT services. We rely on third-party IT service providers, business partners, vendors, and suppliers to provide critical IT systems, corporate infrastructure, and other services and are, by necessity, dependent on them to adequately address cybersecurity threats to, and other vulnerabilities, defects, or deficiencies of or in their own systems. This includes infrastructure such as electronic communications, finance, marketing, and recruiting platforms and services such as IT network development and network monitoring, and third-party data center hosting of our systems for our internal and customer use. We do not own or control the operation of the third-party facilities or equipment used to provide such services. Our third-party vendors and service providers have no obligation to renew their agreements with us on commercially reasonable terms or at all. If we are unable to renew these agreements on commercially reasonable terms, including with respect to service levels and cost, or at all, we may be required to transition to a new provider, and we may incur significant costs and possible service interruption in connection with doing so. In addition, such service providers could decide to close their facilities or change or suspend their service offerings without adequate notice to us. Moreover, any financial difficulties, such as bankruptcy, faced by such vendors, the nature and extent of which are difficult to predict, may harm our business. Since we cannot easily switch vendors without making other business trade-offs, any disruption with respect to our current providers would impact our operations and our business may be harmed. Furthermore, our disaster recovery systems and those of such third parties may not function as intended or may fail to adequately protect our business information in the event of a significant business interruption, Any termination, failure, or other disruption of any of such systems or services of our third-party IT providers, business partners, vendors, and suppliers could lead to operating inefficiencies or disruptions, which could harm our business, operating results, financial condition, and future prospects.

***We have a limited operating history at our current scale, which makes it difficult to evaluate our current business and future prospects and increases the risks associated with investment in our common stock.***

We have a relatively short history operating our business at our current scale and have grown rapidly during that time. We were founded on December 9, 2022 in connection with the corporate roll-up of WAHA Technologies, Inc. and WAHA Inc., which launched a blockchain platform in 2019. We began operating our GPUaaS platform in 2023 through the acquisition of a stake in The Cloud Minders, Inc., whose operational history dates back to 2021 and which we subsequently acquired on April 1, 2025. Our limited operating history, including our limited history of selling our cloud infrastructure offering, the dynamic and rapidly evolving market in which we sell our platform, and the concentration of our revenue from a limited number of customers, as well as numerous other factors beyond our control, may make it difficult to evaluate our current business, future prospects and other trends. We have encountered, and will continue to encounter, risks and uncertainties frequently experienced by growing companies in rapidly changing industries and sectors, such as the risks and uncertainties described herein. Any predictions about our future revenue and expenses may not be as accurate as they would be if we had a longer operating history or operated in a more predictable or established market. If our assumptions regarding these risks and uncertainties are incorrect or change due to fluctuations in our markets, any material reduction in AI or machine learning spending, changes in demand for specialized AI cloud infrastructure, or otherwise, or if we do not address these risks successfully, our operating and financial results could differ materially from our expectations and our business, operating results, financial condition, and future prospects would be adversely affected. We cannot ensure that we will be successful in addressing these and other challenges we may face in the future. The risks associated with having a limited operating history may be exacerbated by current macroeconomic and geopolitical conditions discussed herein.

***We have a limited history selling access to our platform under our current business model and are continuing to scale our operations and evolve our go-to-market strategy, which may make it difficult to evaluate our business and prospects and increase the risks associated with an investment in our common stock.***

We have a limited history selling access to our AI infrastructure and proprietary managed software and application services through our platform and we are continuing to scale our operations and evolve our strategy. We currently sell access to our platform either through committed contracts, which are take-or-pay, or on-demand, which are pay-as-you-go. There is no guarantee that in the future customers will continue to be willing to enter into, and that the industry will continue to support, a take-or-pay model, and any move towards a pay-as-you-go model will impact our ability to forecast our expected cash flows and operating results, impact our margins, and affect our business, operating results, financial condition, and future prospects. Moreover, our committed contracts typically include a prepayment from our customers prior to them receiving any of our services. The level of prepayments we receive from customers may fluctuate over time as we continue to scale our operations and evolve our go-to-market strategy, customer base, and the use cases for our platform. Moreover, any changes in the timing or level of customer payments, including prepayments, would impact our cash flows. Furthermore, scaling our operations and evolving our strategy may take more time and require more effort to implement than anticipated and may have results that are difficult to predict which could result in decreased revenue from our customers. Our business and pricing models have not been fully proven, and we have only a limited operating history with our current business and pricing models to evaluate our business and future prospects, which subjects us to a number of uncertainties, including our ability to plan for and model future growth. Moreover, our historical revenue growth should not be considered indicative of our future performance.

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***If we are unable to attract new customers, retain existing customers, and/or expand sales of our platform, solutions, and services to such customers, we may not achieve the growth we expect, which would adversely affect our business, operating results, financial condition, and future prospects.***

In order to grow our business, we must continue to attract new customers in a cost-effective manner and enable these customers to realize the benefits associated with our platform. We may experience difficulties demonstrating to customers the value of our platform and any new solutions and services that we offer. As we develop and introduce new solutions and services and add new and upgraded components of our platform (such as next-generation NVIDIA GPUs), we face the risk that customers may not value or be willing to adopt these newer offerings, and may forgo adopting one or more newer generations of our existing offerings. Regardless of the improved features or superior performance of the newer offerings, customers may be unwilling to adopt our platform due to design or pricing constraints, among other reasons. Even if customers choose to adopt our platform or new solutions and services that we develop, they may be slow to do so. Because of the extensive time and resources that we invest in research and development, if we are unable to sell new solutions and services, our revenue may decline and our business, operating results, financial condition, and future prospects could be negatively affected. Historically, we have used an internal sales team that is focused on responding to inbound inquiries, outbound prospecting targeting specific customers, expanding sales of our platform to existing customers, and expanding our revenue in specific markets to drive revenue growth. If our sales team is not successful at growing our customer base, our future growth will be impacted.

In addition, we must persuade potential customers that our platform offers significant advantages over those of our competitors. As our market matures, our solutions and services evolve, and competitors introduce lower cost and/or differentiated solutions or services that are perceived to compete with our platform, our ability to maintain or expand sales of our platform, solutions, and services could be impaired. Even if we do attract new customers, the cost of new customer acquisition, implementation of our platform, and ongoing customer support may prove higher than anticipated, thereby adversely impacting our profitability.

Other factors, many of which are out of our control, may now or in the future impact our ability to retain existing customers, attract new customers, and expand sales of our platform, solutions, and services to such customers in a cost-effective manner, including:

● potential customers' commitments to existing solutions or services or greater familiarity or comfort with other solutions or services;

● our ability to secure sufficient power for our platform and solutions;

● decreased spending on specialized AI cloud infrastructure or AI or machine learning development generally;

● deteriorating general economic and geopolitical conditions;

● future governmental regulation, which could adversely impact growth of the AI sector;

● negative media, industry, or financial analyst commentary regarding our platform, AI, and the identities and activities of some of our customers;

● our ability to expand, retain, and motivate our sales, customer success, cloud operations, and marketing personnel;

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● our ability to obtain or maintain industry security certifications for our platform;

● the perceived risk, commencement, or outcome of litigation; and

● increased expenses associated with being a public company following this offering.

Some of our customer contracts are on-demand and based on our terms of service, which do not require our customers to commit to a specific contractual period, and which permit the customer to terminate their contracts or decrease usage of our services with limited notice. Any service terminations could cause our operating results to fluctuate from quarter to quarter. Our customer retention may decline or fluctuate as a result of a number of factors, including our customers' satisfaction with the security, performance, and reliability of our platform, our prices and usage plans, our customers' AI development and use and related budgetary restrictions, the perception that competitive solutions and services provide better or less expensive options, negative public perception of us or our customers, and deteriorating general economic conditions.

Our future financial performance also depends in part on our ability to expand sales of our platform, solutions, and services to our existing customers. In order to expand our commercial relationship with our customers, existing customers must decide that the increased cost associated with additional purchases of our platform, solutions, and services is justified by the additional functionality. Our customers' decision whether to increase their purchase is driven by a number of factors, including customer satisfaction with the security, performance, and reliability of our platform, the functionality of any new solutions and services we may offer, general economic conditions, and customer reaction to our pricing model. If our efforts to expand our relationship with our existing customers are not successful, our business, operating results, financial condition, and future prospects may materially suffer.

***If we are unable to successfully build, expand, and deploy our sales organization in a timely manner, or at all, or to successfully hire, retain, train, and motivate our sales personnel, our growth and long-term success could be adversely impacted.***

We have grown, and may continue to grow, our direct sales force and our sales efforts have historically depended on the significant direct involvement of our senior management team. The successful execution of our strategy to increase our sales to existing customers, identify new potential customers, expand our customer base, and enter new markets will depend, among other things, on our ability to successfully build and expand our sales organization and operations. We have and plan to continue to dedicate significant resources to sales and marketing programs and to expand our sales and marketing capabilities to target additional potential customers and achieve broader market adoption of our platform, but there is no guarantee that we will be successful in attracting and maintaining additional customers. Moreover, identifying, recruiting, training, and managing sales personnel requires significant time, expense, and attention, including from our senior management and other key personnel, which could adversely impact our business, operating results, financial condition, and future prospects in the short and long term.

In order to successfully scale our current top-down sales model and as AI use cases expand, we may need to increase the size of our direct sales force while preserving the cultural and mission-oriented elements of our company. If we do not hire a sufficient number of qualified sales personnel, our future revenue growth and business could be adversely impacted. It may take a significant period of time before our sales personnel are fully trained and productive, particularly in light of our current sales model, and there is no guarantee we will be successful in adequately training and effectively deploying our sales personnel. In addition, we have invested, and may need to continue investing, significant resources in our sales operations to enable our sales organization to run effectively and efficiently, including supporting sales strategy planning, sales process optimization, data analytics and reporting, and administering incentive compensation arrangements. Our business would be adversely affected if our efforts to build, expand, train, and manage our sales organization are not successful. We periodically make adjustments to our sales organization in response to market opportunities, competitive threats, management changes, product introductions or enhancements, acquisitions, sales performance, increases in sales headcount, cost levels, and other internal and external considerations. Any future sales organization changes may result in a temporary reduction of productivity, which could negatively affect our rate of growth. In addition, any significant change to the way we structure and implement the compensation of our sales organization may be disruptive or may not be effective and may affect our revenue growth. If we are unable to attract, hire, develop, retain, and motivate qualified sales personnel, if our new sales personnel are unable to achieve sufficient sales productivity levels in a reasonable period of time or at all, if our marketing programs are not effective or if we are unable to effectively build, expand, and manage our sales organization and operations, our sales and revenue may grow more slowly than expected or materially decline, and our business, operating results, financing condition, and future prospects may be significantly harmed.

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***If we do not or cannot maintain the compatibility of our platform with our customers***' ***existing technology, including third-party technologies that our customers use in their businesses, our business may be adversely affected.***

The functionality and popularity of our platform depends, in part, on our ability to integrate our platform with our customers' existing technology, including other third-party technologies that our customers use in their businesses. Our customers, or the third parties whose solutions and services our customers utilize, may change the features of their technologies, restrict our access to their technologies, or alter the terms governing use of their technologies in a manner that makes our platform incompatible with their technologies, and which would adversely impact our ability to service our customers. Such changes could functionally limit or prevent our ability to use these third-party technologies in conjunction with our platform, which would negatively affect adoption of our platform and harm our business. If we fail to integrate our platform with our customers' technologies and with third-party technologies that our customers use, we may not be able to offer the functionality that our customers want or need, which could adversely impact our business.

***If we are not able to maintain and enhance our brand, our business, operating results, financial condition, and future prospects may be adversely affected.***

We believe that maintaining and enhancing our brand and our reputation is critical to continued market acceptance of our platform, our relationship with our existing customers and our ability to attract new customers. The successful promotion of our brand will depend on a number of factors, including our ability to continue to provide reliable solutions and services that continue to meet the needs of our customers at competitive prices, our ability to successfully differentiate our platform from those of competitors, and the effectiveness of our marketing efforts. Further, industry standards continue to evolve and there is no consensus around performance benchmarks applied to us and our competitors, which may impact our ability to promote our platform and our brand. Although we believe it is important for our growth, our brand promotion activities may not be successful or yield increased revenue, and even if they do, any increased revenue may not offset the expenses we incur in building our brand. If we fail to successfully promote and maintain our brand, our business, operating results, financial condition, and future prospects may be harmed.

In addition, independent industry and research firms often evaluate our offerings and provide reviews of our platform, as well as the solutions and services of our competitors, and perception of our platform in the marketplace may be significantly influenced by these reviews. If these reviews are negative, or less positive as compared to those of our competitors' solutions and services, our brand may be adversely affected. Our offerings may experience capacity and operational issues for a number of reasons that may or may not be related to the efficacy of our offerings in real world environments. To the extent potential customers, industry analysts, or research firms believe that the occurrence of capacity or computing issues is a flaw or indicates that our platform does not provide significant value, we may lose such potential customer opportunities, and our reputation, business, operating results, financial condition, and future prospects may be harmed.

***As we expand our customer base, we may become further subject to counterparty credit risk, which would adversely impact our business, operating results, financial condition, and future prospects.***

We intend to increase the number of our customers over time, including customers in their early stages and/or private companies who may have increased risk of insolvency, bankruptcy, or other issues impacting their creditworthiness. Our business is, and may in the future be, subject to the risks of non-payment and non-performance by these customers, which risk is heightened given that a substantial portion of our revenue is currently, and is expected for the foreseeable future to be, driven by a limited number of customers. We manage our exposure to credit risk through receipt of prepayments under our committed contracts, credit analysis and monitoring procedures, and may use letters of credit, prepayments, and guarantees. However, these procedures and policies cannot fully eliminate customer credit risk, and to the extent our policies and procedures prove to be inadequate, it could negatively affect our business, operating results, financial condition, and future prospects. In addition, some of our customers may be highly leveraged and subject to their own operating and regulatory risks and, even if our credit review and analysis mechanisms work properly, we may experience risks of non-payment and non-performance in our dealings with such parties. In such event, we may remain responsible for expenditures for components, infrastructure, and data center leases and build-outs, as well as related financing that we have undertaken for which we may not receive corresponding revenue. We do not currently maintain credit insurance to insure against customer credit risk. If our customers fail to fulfill their contractual obligations, it may have an adverse effect on our business, operating results, financial condition, and future prospects.

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***The United States market may become saturated, and our long-term success may depend, in part, on our ability to expand the sale of our platform to customers located outside of the United States, and any international expansion of our operations exposes us to risks that could have a material adverse effect on our business, operating results, financial condition, and future prospects.***

If the United States market becomes saturated, our long-term success may depend, in part, on our ability to expand the sale of our platform to customers located outside of the United States. Expanding our business outside of the United States and conducting our business activities in various foreign countries, where we have limited experience and where the challenges of conducting our business can be significantly different from those we have faced, may create internal control risks including:

● slower than anticipated demand for AI and machine learning solutions offered by existing and potential customers outside the United States and slower than anticipated adoption of specialized AI cloud-based infrastructures by international businesses;

● fluctuations in foreign currency exchange rates, which could add volatility to our operating results;

● limitations within our debt agreements that may restrict our ability to make investments in our foreign subsidiaries;

● new, or changes in, regulatory requirements, including with respect to AI;

● tariffs, export and import restrictions, restrictions on foreign investments, sanctions, and other trade barriers or protection measures;

● exposure to numerous, increasing, stringent (particularly in the European Union), and potentially inconsistent laws and regulations relating to privacy, data protection, and information security;

● costs of localizing our platform;

● lack of acceptance of localized solutions and services;

● the need to make significant investments in people, solutions, and infrastructure, typically well in advance of revenue generation;

● challenges inherent in efficiently managing an increased number of employees over large geographic distances, including the need to implement appropriate systems, policies, benefits, and compliance programs;

● difficulties in maintaining our corporate culture with a dispersed and distant workforce;

● treatment of revenue from international sources, evolving domestic and international tax environments, and other potential tax issues, including with respect to our corporate operating structure and intercompany arrangements;

● different or weaker protection of our intellectual property, including increased risk of theft of our proprietary technology and other intellectual property;

● economic weakness or currency-related disparities or crises;

● compliance with multiple, conflicting, ambiguous or evolving governmental laws and regulations, including employment, tax, data privacy, anti-corruption, import/export, antitrust, data transfer, storage and protection, and industry-specific laws and regulations, including regulations related to AI;

● generally longer payment cycles and greater difficulty in collecting accounts receivable;

● our ability to adapt to sales practices and customer requirements in different cultures;

● the lack of reference customers and other marketing assets in regional markets that are new or developing for us, as well as other adaptations in our market generation efforts that we may be slow to identify and implement;

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● dependence on certain third parties, including third-party data center facility providers;

● natural disasters, acts of war, terrorism, or pandemics, including the armed conflicts in the Middle East and Ukraine and tensions between China and Taiwan;

● actual or perceived instability in the global banking system;

● cybersecurity incidents;

● corporate espionage; and

● political instability and security risks in the countries where we are doing business and changes in the public perception of governments in the countries where we operate or plan to operate.

***Our business could be materially and adversely affected by geopolitical instability, armed conflicts, international trade restrictions, or disruption to the global semiconductor supply chain, including risks related to China and Taiwan.***

Our operations and growth are exposed to significant risks arising from global geopolitical instability, trade policy shifts, and supply chain concentration in critical regions. These risks could have a material adverse effect on our business, financial condition, and results of operations. Specific risks include:

● disruption of semiconductor supply chains due to geopolitical instability, particularly the war in Iran and any conflict in or around Taiwan or restrictions affecting manufacturers in China;

● changes in U.S. or foreign trade policy, including the imposition of tariffs, sanctions, or export and import controls affecting advanced chips, energy inputs, or other critical resources;

● escalation of existing conflicts in regions such as Ukraine or the Middle East, or new armed conflicts elsewhere, which may affect global energy prices, financing conditions, and investor sentiment;

● volatility in foreign currency exchange rates and evolving international tax regimes;

● restrictions on foreign investment or heightened review of cross-border technology transactions; and

● broader political or economic instability, including instability in global banking and capital markets.

These risks may raise our acquisition costs for GPUs and related infrastructure, constrain our access to advanced technology, or impair our ability to serve international customers effectively. For example, new tariffs on semiconductors, networking equipment, or energy-related inputs could materially increase our cost base, limit our pricing flexibility, and reduce demand for our services. While we seek to mitigate these risks through diversified sourcing, strategic partnerships, and long-term power and technology agreements, many of these factors remain outside our control.

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

Our go-to-market strategy targets AI developers' implementation and acceleration needs through multiple sales channels. We use top-down sales for enterprise decision makers and bottom-up approaches for developers with varied requirements. Our channels include digital sales, reseller partnerships, and customer aggregation through machine learning operations shops that connect clients with reliable infrastructure providers. Customers often view the purchase of our platform as a significant strategic decision and, as a result, frequently require considerable time to evaluate, test, and qualify our platform prior to entering into or expanding a relationship with us. Large enterprises in particular, often undertake a significant evaluation process that further lengthens our sales cycle.

Our direct sales team develops relationships with our customers, and works on account penetration, account coordination, sales, and overall market development. We spend substantial time and resources on our sales efforts without any assurance that our efforts will produce a sale. Cloud infrastructure capacity purchases are frequently subject to budget constraints, multiple approvals, and unanticipated administrative, processing, and other delays. As a result, it is difficult to predict whether and when a sale will be completed. The failure of our efforts to secure sales after investing resources in a lengthy sales process would adversely affect our business, operating results, financial condition, and future prospects.

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***The sales prices of our offerings may decrease, which may reduce our margins and adversely affect our business, operating results, financial condition, and future prospects.***

We have limited experience with respect to determining the optimal prices for our platform. As the market for cloud infrastructure and AI and machine learning solutions mature, or as new competitors introduce new infrastructure solutions or services that are similar to or compete with ours, we may be unable to effectively optimize our prices through increases or decreases or attract new customers at our offered prices or based on the same pricing model as we have used historically. Further, competition continues to increase in the market segments in which we participate, and we expect competition to further increase in the future, thereby leading to increased pricing pressures. Larger competitors with more diverse offerings may reduce the price of any offerings that compete with ours or may bundle them with other solutions and services. This could lead customers to demand greater price concessions or additional functionality at the same price levels. As a result, in the future we may be required to reduce our prices or provide more features and services without corresponding increases in price, which would adversely affect our business, operating results, financial condition, and future prospects.

***Existing and future acquisitions, strategic investments, partnerships, or alliances could be difficult to identify and integrate, divert the attention of key management personnel, disrupt our business, dilute shareholder value, and adversely affect our business, operating results, financial condition, and future prospects.***

We may make investments in and/or acquire complementary companies, services, products, technologies, or talent. All acquisitions and venture investments are subject to a risk of partial or total loss of investment capital. Our ability as an organization to acquire and integrate other companies, services, or technologies in a successful manner is not guaranteed.

In the future, we may not be able to find suitable acquisition candidates, and we may not be able to complete such acquisitions on favorable terms, if at all. Our due diligence efforts may fail to identify all of the challenges, problems, liabilities, or other shortcomings involved in an acquisition. Further, current and future changes to the U.S. and foreign regulatory approval process and requirements related to acquisitions may cause approvals to take longer than anticipated, not be forthcoming or contain burdensome conditions, which may prevent the transaction or jeopardize, delay or reduce the anticipated benefits of the transaction, and impede the execution of our business strategy. If we do complete acquisitions, we may not ultimately strengthen our competitive position or ability to achieve our business objectives, and any acquisitions we announce or complete could be viewed negatively by our customers or investors.

In addition, if we are unsuccessful at integrating future acquisitions, or the technologies and personnel associated with such acquisitions into our company, the business, operating results, financing condition, and future prospects of the combined company could be adversely affected. Any integration process may require significant time and resources, and we may not be able to manage the process successfully. We may not successfully evaluate or utilize the acquired technology or personnel, or accurately forecast the financial impact of an acquisition transaction, causing unanticipated write-offs or accounting (including goodwill) charges. Additionally, integrations could take longer than expected, or if we move too quickly in trying to integrate an acquisition, strategic investment, partnership, or other alliance, we may fail to achieve the desired efficiencies.

We have, and may in the future have, to pay cash, incur debt, issue equity securities or provide computing services, to pay for any such acquisition, each of which could adversely affect our financial condition and the market price of our common stock. The sale of equity or issuance of debt to finance any such acquisitions could result in dilution to our shareholders, which, depending on the size of the acquisition, may be significant. The incurrence of indebtedness would result in increased fixed obligations and could also include covenants or other restrictions that would impede our ability to manage our operations.

Furthermore, our ability to make acquisitions and finance acquisitions through the sale of equity or issuance of debt is limited by certain restrictions contained in our debt agreements.

Additional risks we may face in connection with acquisitions, including our recent acquisition of The Cloud Minders, Inc., include:

● diversion of management's time and focus from operating our business to addressing acquisition integration challenges;

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● the inability to coordinate research and development and sales and marketing functions;

● the inability to integrate solution and service offerings;

● retention of key employees from the acquired company;

● changes in relationships with strategic partners or the loss of any key customers or partners as a result of acquisitions or strategic positioning resulting from the acquisition;

● cultural challenges associated with integrating employees from the acquired company into our organization;

● integration of the acquired company's accounting, customer relationship management, management information, human resources, and other administrative systems;

● the need to implement or improve controls, procedures, and policies at a business that prior to the acquisition may have lacked sufficiently effective controls, procedures, and policies;

● unexpected security risks or higher than expected costs to improve the security posture of the acquired company;

● higher than expected costs to bring the acquired company's IT infrastructure up to our standards;

● additional legal, regulatory, or compliance requirements;

● financial reporting, revenue recognition, or other financial or control deficiencies of the acquired company that we do not adequately address and that cause our reported results to be incorrect;

● liability for activities of the acquired company before the acquisition, including intellectual property infringement claims, violations of laws, commercial disputes, tax liabilities, and other known and unknown liabilities;

● failing to achieve the expected benefits of the acquisition or investment; and

● litigation or other claims in connection with the acquired company, including claims from or against terminated employees, customers, current and former shareholders, or other third parties.

Our failure to address these risks or other problems encountered in connection with acquisitions and investments could cause us to fail to realize the anticipated benefits of these acquisitions or investments, cause us to incur unanticipated liabilities, and harm our business generally.

***Our estimates of market opportunity and forecasts of market growth included in this prospectus may prove to be inaccurate, and even if the markets in which we compete achieve the forecasted growth, our business could fail to grow at similar rates, if at all.***

The estimates of market opportunity and forecasts of market growth included in this prospectus may prove to be inaccurate. Market opportunity estimates and growth forecasts included in this prospectus, including those we have generated ourselves, are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate, including the risks described herein. Even if the markets in which we compete achieve the forecasted growth, our business could fail to grow at similar rates, if at all. Further, if AI is not broadly adopted by enterprises to the extent we expect, or if new use cases do not arise, then our opportunity may be smaller than we expect.

The variables that go into the calculation of our market opportunity are subject to change over time, and there is no guarantee that any particular number or percentage of addressable customers covered by our market opportunity estimates will purchase our platform at all or generate any particular level of revenue for us. Any expansion in the markets in which we operate depends on a number of factors, including the cost, performance, and perceived value associated with our platform and those of our competitors. Even if the markets in which we compete meet the size estimates and growth forecast, our business could fail to grow at similar rates, if at all. Our growth is subject to many factors, including our success in implementing our business strategy, which is subject to many risks and uncertainties. Accordingly, our forecasts of market growth included in this prospectus should not be taken as indicative of our future growth.

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***We have in the past, and may in the future, enter into collaborations or strategic alliances with third parties. If we are unsuccessful in establishing or maintaining strategic relationships with these third parties or if these third parties fail to deliver certain operational services, our business, operating results, financial condition, and future prospects could be adversely affected.***

We have in the past, and may in the future, enter into collaborations or strategic alliances with third parties in connection with the development, operation, and enhancements to our platform and the provision of our solutions and services. Identifying strategic relationships with third parties, and negotiating and documenting relationships with them, may be time-consuming and complex and may distract management. Moreover, we may be delayed, or may not be successful, in achieving the objectives that we anticipate as a result of such strategic relationships. In evaluating counterparties in connection with collaborations or strategic alliances, we consider a wide range of economic, legal, and regulatory criteria depending on the nature of such relationship, including the counterparties' reputation, operating results, and financial condition, operational ability to satisfy our and our customers' needs in a timely manner, efficiency and reliability of systems, certifications costs to us or to our customers, and licensure and compliance status. Despite this evaluation, third parties may still not meet our or our customers' needs which may adversely affect our ability to deliver solutions and services to customers and may adversely impact our business, operating results, financial condition, and future prospects. Counterparties to any strategic relationship may have economic or business interests or goals that are, or that may become, inconsistent with our business interests or goals, and may subject us to additional risks to the extent such third party becomes the subject of negative publicity, faces its own litigation or regulatory challenges, or faces other adverse circumstances. Conflicts may arise with our strategic partners, such as the interpretation of significant terms under any agreement, which may result in litigation or arbitration which would increase our expenses and divert the attention of our management. If we are unsuccessful in establishing or maintaining strategic relationships with third parties, our ability to compete or to grow our revenue could be impaired and our business, operating results, financial condition, and future prospects could be adversely affected.

***The anticipated benefits of potential joint ventures may not be fully realized or take longer to realize than expected. In addition, our joint venture investments could expose us to risks and liabilities in connection with the formation of the new joint ventures, the operation of such joint ventures without sole decision-making authority, and our reliance on joint venture partners who may have economic and business interests that are inconsistent with our business interests.***

We may enter into joint ventures in the future, including to develop and operate data centers. Certain sites that are intended to be utilized in joint ventures require investment for development. The success of these joint ventures will also depend, in part, on the successful development of the data center sites, and we may not realize all of the anticipated benefits. Such development may be more difficult, time-consuming, or costly than expected and could result in increased costs, decreases in the amount of expected revenues, and diversion of management's time and energy, which could materially impact our business, operating results, financial condition, and future prospects. Additionally, if it is determined these sites are no longer desirable for the joint ventures, we would need to adapt such sites for other purposes.

The success of any joint ventures will depend, in part, on the successful relationship between us and our joint venture partners. A failure to successfully partner, or a failure to realize our expectations for the joint ventures, including any contemplated exit strategy from a joint venture, could materially impact our business, operating results, financial condition, and future prospects. These joint ventures could also be negatively impacted by inflation, supply chain issues, an inability to obtain financing on favorable terms or at all, an inability to fill the data center sites with customers as planned, and development and construction delays.

Further, in the future, we may co-invest with other third parties through partnerships, joint ventures, or other entities in the future. These joint ventures could result in our acquisition of non-controlling interests in, or shared responsibility for, managing the affairs of a property or portfolio of properties, partnership, joint venture, or other entity. We may be subject to additional risks, including:

● we may not have the right to exercise sole decision-making authority regarding the properties, partnership, joint venture, or other entity;

● if our partners become bankrupt or fail to fund their share of required capital contributions, we may choose to or be required to contribute such capital;

● our partners may have economic, tax, or other business interests or goals which are inconsistent with our business interests or goals, and may be in a position to take actions contrary to our interests or objectives;

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● our joint venture partners may take actions that are not within our control, which could require us to dispose of the joint venture asset or purchase the partner's interests or assets at an above-market price;

● our joint venture partners may take actions unrelated to our business agreement but which reflect poorly on us because of our joint venture relationship;

● disputes between us and our partners may result in litigation or arbitration that would increase our expenses and prevent our management from focusing their time and effort on our day-to-day business;

● we may in certain circumstances be liable for the actions of our third-party partners or guarantee all or a portion of the joint venture's liabilities, which may require us to pay an amount greater than its investment in the joint venture;

● we may need to change the structure of an established joint venture or create new complex structures to meet our business needs or the needs of our partners which could prove challenging; and

● a joint venture partner's decision to exit the joint venture may not be at an opportune time for us or in our business interests.

Each of these factors may result in returns on these investments being less than we expect or in losses, and business, operating results, financial condition, and future prospects may be adversely affected.

***Future acquisitions could include real property and subject us to the general risks associated with the ownership of real property.***

We currently lease all of our data centers and office locations. However, we could in the future make acquisitions that include real property, which would most likely be one or more data centers. As a result of any such acquisition, we would directly own real property and become subject to the general risks associated with the ownership of real property, including:

● changes in governmental laws and regulations, including the Americans with Disabilities Act and zoning ordinances, and the related costs of compliance;

● increased upfront costs of purchasing real property;

● the ongoing need for repair, maintenance and capital improvements;

● natural disasters, including earthquakes, floods and other natural disasters, and acts of war or terrorism;

● general liability, property and casualty losses, some of which may be uninsured;

● liabilities for clean-up of undisclosed environmental contamination; and

● liabilities incurred in the ordinary course of business.

***If negative publicity arises with respect to us, our employees, former employees, founders, investors, affiliates, third-party suppliers, service providers, or our partners, our business, operating results, financial condition, and future prospects could be adversely affected, regardless of whether the negative publicity is true.***

Negative publicity about our company or our platform, solutions, or services, even if inaccurate or untrue, could adversely affect our reputation and the confidence in our platform, solutions, or services, which could harm our business, operating results, financial condition, and future prospects. Harm to our reputation can also arise from many other sources, including employee misconduct, which we have experienced in the past, and misconduct by our partners, contractors, suppliers, and outsourced service providers. Additionally, negative publicity with respect to our partners or service providers could also affect our business, operating results, financial condition, and future prospects to the extent that we rely on these partners or if our customers or prospective customers associate our company with these partners.

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***Our ability to maintain customer satisfaction depends in part on the quality of our customer support and cloud operations services. Our failure to maintain high-quality customer support and cloud operations services could have an adverse effect on our business, operating results, financial condition, and future prospects.***

We believe that the successful use of our platform requires a high level of support and engagement for many of our customers. In order to deliver appropriate customer support and engagement, we must successfully assist our customers in deploying and continuing to use our platform, resolve performance issues, address interoperability challenges with the customers' existing IT infrastructure, and respond to security threats and cyber-attacks and performance and reliability problems that may arise from time to time. Increased demand for customer support and cloud operations services, without corresponding increases in revenue, could increase our costs and adversely affect our business, operating results, financial condition, and future prospects.

Furthermore, there can be no assurance that we will be able to hire sufficient support personnel as and when needed, particularly if our sales exceed our internal forecasts. We expect to increase the number of our customers, and that growth may put additional pressure on our customer support and cloud operations services teams. Our customer support and cloud operations services teams may need additional personnel to respond to customer demand. We may be unable to respond quickly enough to accommodate short-term increases in customer demand for services. To the extent that we are unsuccessful in hiring, training, and retaining adequate support resources, our ability to provide high-quality and timely support to our customers will be negatively impacted, and our customers' satisfaction and their purchase of our infrastructure could be adversely affected.

In addition, if we grow our operations and expand outside of the United States, we need to be able to provide efficient services that meet our customers' needs globally at scale, and our customer support and cloud operations services teams may face additional challenges, including those associated with operating the platforms and delivering support, training, and documentation in languages other than English and providing services across expanded time-zones. If we are unable to provide efficient customer support services globally at scale, our ability to grow our operations may be harmed, and we may need to hire additional services personnel which could increase our expenses, and negatively impact our business, financial condition, operating results, and future prospects.

**Risks Related to our People** 

***We rely on our management team and other key employees and will need additional personnel to grow our business, and the loss of one or more key employees or our inability to attract and retain qualified personnel, including members of our Board of Directors, could harm our business.***

Our future success is dependent, in part, on our ability to hire, integrate, train, manage, retain, and motivate the members of our management team and other key employees throughout our organization as well as members of our Board of Directors (the "Board"). The loss of key personnel, particularly Michael Maniscalco, our Chief Executive Officer; Scott Krosnowski, our Chief Financial Officer; Ankur Chatterjee, our Chief Integration Officer; Ryan DiRocco, our Chief Technology Officer; Steve Gertz, our Chief Growth Officer; or Stephen Hunton, our Chief Marketing Officer – as well as key marketing, sales, finance, support, network development, or technology advisors and personnel – could disrupt our operations and have an adverse effect on our ability to grow our business.

Mr. Maniscalco, Mr. DiRocco, Mr. Gertz, and Mr. Hunton were recently appointed to their positions. Transitions in executive leadership may result in strategic business and operational changes, shifts in personnel priorities and/or uncertainty among employees, customers or investors. Any failure to effectively manage these transitions could impact continuity, delay initiatives, or reduce morale. Such turnover can also disrupt long-term customer relationships, strategic execution, or internal governance.

Competition for highly skilled personnel is intense, and we may not be successful in hiring or retaining qualified personnel to fulfill our current or future needs. More generally, the technology industry, and the cloud infrastructure industry more specifically, is also subject to substantial and continuous competition for engineers with high levels of experience in designing, developing, and managing infrastructure and related services. Moreover, the industry in which we operate generally experiences high employee attrition. We have, from time to time, experienced, and we expect to continue to experience, difficulty in hiring and retaining highly skilled employees with appropriate qualifications. In recent years, recruiting, hiring, and retaining employees with expertise in the AI computing industry has become increasingly difficult as the demand for AI computing infrastructure has increased as a result of the increase in AI and machine learning development, deployment, and demand. We may be required to provide more training to our personnel than we currently anticipate. Further, labor is subject to external factors that are beyond our control, including our industry's highly competitive market for skilled workers and leaders, cost inflation, overall macroeconomics, and workforce participation rates. Should our competitors recruit our employees, our level of expertise and ability to execute our business plan would be negatively impacted. Moreover, many of the companies with which we compete for experienced personnel have greater resources than we have. Our competitors also may be successful in recruiting and hiring members of our management team, sales team, or other key employees, and it may be difficult for us to find suitable replacements on a timely basis, on competitive terms, or at all.

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In addition, job candidates and existing employees often consider the value of the equity awards and other compensation they receive in connection with their employment. If the perceived value of our compensatory package declines or is subject to significant value fluctuations, it may adversely affect our ability to attract and retain highly skilled employees. We may also change the composition of our compensation package to employees, including the amount or ratio of cash and equity compensation. Any increases to the amount of cash compensation will increase our cash expenditures, which may impact our business, operating results, financial condition, and future prospects. Further, our competitors may be successful in recruiting and hiring members of our management team or other key employees as well as directors, and it may be difficult for us to find suitable replacements on a timely basis, on competitive terms, or at all. In recent years, the increased availability of hybrid or remote working arrangements has expanded the pool of companies that can compete for our employees and employment candidates. If we fail to attract new personnel or fail to retain and motivate our current personnel, our business and future growth prospects would be severely harmed.

***Our senior management team has limited experience managing a public company, and regulatory compliance may divert our attention from the day-to-day management of our business.***

The individuals who constitute our senior management team have limited experience managing a publicly traded company and limited experience complying with the increasingly complex laws pertaining to public companies. Our senior management team may not successfully or efficiently manage a public company subject to significant regulatory oversight and reporting obligations under United States securities laws. In particular, these obligations require substantial attention from our senior management team and could divert their attention from the day-to-day management of our business.

***We believe that our corporate culture has contributed to our success, and if we cannot maintain this culture as we grow, we could lose the innovation, creativity, and teamwork fostered by our culture, and our business may be harmed.***

We believe that our corporate culture has been, and will continue to be, a key contributor to our success. If we do not continue to maintain our corporate culture, which includes our focus on our customers, as we grow and evolve, including as we continue to grow in headcount, it could harm our ability to foster the drive, innovation, inclusion, creativity, and teamwork that we believe is important to support our growth. As we implement more complex organizational structures, we may find it increasingly difficult to maintain the beneficial aspects of our corporate culture, which could negatively impact our future success.

**Risks Related to Our Intellectual Property** 

***Failure to obtain, maintain, protect, or enforce our intellectual property and proprietary rights could enable others to copy or use aspects of our platform without compensating us, which could harm our brand, business, operating results, financial condition, and future prospects.***

We rely on a combination of copyright, trade secret, unfair competition, and other related laws in the United States, as well as confidentiality agreements and contractual provisions with our customers, vendors, employees, and contractors to protect our technology and intellectual property rights. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our platform or obtain and use information that we regard as proprietary. In particular, protecting software-level innovations and process-oriented intellectual property presents inherent complexities. Unlike tangible assets, software and methodologies are often difficult to safeguard through traditional patent frameworks due to their intangible, dynamic, and iterative nature. We are unable to predict or assure that:

● our intellectual property rights will not lapse or be invalidated, circumvented, challenged, or, in the case of third-party intellectual property rights licensed to us, be licensed to others;

● our intellectual property rights will provide competitive advantages to us;

● rights previously granted by third parties to intellectual property licensed or assigned to us, including portfolio cross-licenses, will not hamper our ability to assert our intellectual property rights or hinder the settlement of currently pending or future disputes;

● any of our pending or future trademark applications will be issued or have the coverage originally sought;

● we will be able to enforce our intellectual property rights in certain jurisdictions where competition is intense or where legal protection may be weak; or

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● we have sufficient intellectual property rights to protect our solutions and services or our business.

We customarily enter into appropriate agreements with our employees, contractors, vendors, customers, and other partners, including but not limited to confidentiality and project-specific agreements, and we make significant efforts to protect and control access to our proprietary and other sensitive information. However, such agreements may not be enforceable in full or in part in all jurisdictions and any breach could negatively affect our business and our remedy for such breach may be limited. The contractual provisions that we enter into may not prevent unauthorized use or disclosure of our proprietary technology or intellectual property rights and may not provide an adequate remedy in the event of unauthorized use or disclosure of our proprietary technology or intellectual property rights. Lastly, the measures we employ to limit the access and distribution of our proprietary information may not prevent unauthorized use or disclosure of our proprietary technology or intellectual property. As such, we cannot guarantee that the steps taken by us will prevent infringement, violation, or misappropriation of our technology.

We pursue the registration of our trademarks, service marks, and domain names in the United States. These processes are expensive and may not be successful in all jurisdictions or for every such application, and we may not pursue such protections in all jurisdictions that may be relevant, for all our goods or services or in every class of goods and services in which we operate. As such, policing unauthorized use of our technology or platform is difficult. The loss of trade secret protection, for example, could make it easier for third parties to compete with our platform by copying functionality. Any changes in, or unexpected interpretations of, the trade secret and employment laws may compromise our ability to enforce our trade secret and intellectual property rights. The legal systems of certain countries do not favor the enforcement of trademarks trade secrets, and other intellectual property and proprietary protection, which could make it difficult for us to stop the infringement, misappropriation, dilution, or other violation of our intellectual property or marketing of competing platforms, solutions, or services in violation of our intellectual property rights generally. Any changes in, or unexpected interpretations of, intellectual property laws may compromise our ability to enforce our intellectual property rights. If we fail to maintain, protect and enhance our intellectual property rights, our business, operating results, financial condition, and future prospects may be harmed.

In addition, defending our intellectual property rights through litigation might entail significant expense. Such litigation could result in substantial costs and diversion of resources and could negatively affect our business, operating results, financial condition, and future prospects. If we are unable to protect our proprietary rights, we could find ourselves at a competitive disadvantage to others who need not incur the additional expense, time, and effort required to create our platform and other innovative offerings that have enabled us to be successful to date. Moreover, we may need to expend additional resources to defend our intellectual property rights in foreign countries, and our inability to do so could impair our business or adversely affect our international expansion.

***Third parties may claim that our platform infringes, misappropriates, or otherwise violates their intellectual property rights, and such claims could be time-consuming or costly to defend or settle, result in the loss of significant rights, or harm our relationships with our customers or reputation in the industry.***

Third parties may in the future claim that our current or future offerings infringe their intellectual property rights, and such claims may result in legal claims against us, our third-party partners, and our customers. These claims may be time consuming, costly to defend or settle, damage our brand and reputation, harm our customer relationships, and create liability for us. Contractually, we are expected to indemnify our partners and customers for these types of claims. We expect the number of such claims (whether warranted or not) to increase, particularly as a public company with an increased profile and visibility, as the level of competition in our market grows, as the functionality of our offerings overlap with that of other cloud infrastructure companies, and as the volume of issued hardware and software patents and patent applications continues to increase. We generally agree in our customer and partner contracts to indemnify customers for certain expenses or liabilities they incur as a result of third-party intellectual property infringement claims associated with our platform. To the extent that any claim arises as a result of third-party technology we have licensed for use in our platform, we may be unable to recover from the appropriate third party any expenses or other liabilities that we incur.

Companies in the cloud infrastructure and technology industries, including some of our current and potential competitors, may own large numbers of patents, copyrights, trademarks, and trade secrets and frequently enter into litigation based on allegations of infringement or other violations of intellectual property rights. In addition, many of these companies have the capability to dedicate substantially greater resources to enforce their intellectual property rights and to defend claims that may be brought against them. Furthermore, patent holding companies, non-practicing entities, and other adverse patent owners that are not deterred by our existing intellectual property protections have sought, and may in the future seek, to assert patent claims against us. From time to time, third parties, including certain of these leading companies, may invite us to license their patents and may, in the future, assert patent, copyright, trademark, or other intellectual property rights against us, our third-party partners, or our customers. We may in the future receive notices that claim we have misappropriated, misused, or infringed other parties' intellectual property rights, and, to the extent we gain greater market visibility, we face a higher risk of being the subject of intellectual property infringement claims.

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There may be third-party intellectual property rights that cover significant aspects of our technologies or business methods and assets. In the event that we engage software engineers or other personnel who were previously engaged by competitors or other third parties, we may be subject to claims that those personnel inadvertently or deliberately incorporate proprietary technology of third parties into our platform or have improperly used or disclosed trade secrets or other proprietary information. We may also in the future be subject to claims by our third-party manufacturing partners, employees, or contractors asserting an ownership right in our intellectual property as a result of the work they performed on our behalf. In addition, we may lose valuable intellectual property rights or personnel. A loss of key personnel or their work product could hamper or prevent our ability to develop, market, and support potential offerings and platform enhancements, which could severely harm our business.

Any intellectual property claims, with or without merit, could be very time-consuming, could be expensive to settle or litigate, and could divert our management's attention and other resources. These claims could also subject us to significant liability for damages, potentially including treble damages if we are found to have willfully infringed patents or copyrights, and may require us to indemnify our customers for liabilities they incur as a result of such claims. These claims could also result in our having to stop using technology found to be in violation of a third party's rights. We might be required to seek a license for the intellectual property, which may not be available on reasonable terms or at all. Even if a license were available, we could be required to pay significant royalties, which would increase our operating expenses. Alternatively, we could be required to develop alternative non-infringing technology, which could require significant time, effort, and expense, and may affect the performance or features of our platform. If we cannot license or develop alternative non-infringing substitutes for any infringing technology used in any aspect of our business, we would be forced to limit or stop sales of our platform and may be unable to compete effectively. Moreover, there could be public announcements of the results of hearings, motions or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock. Any of these results would adversely affect our business, operating results, financial condition, and future prospects.

***We license technology from third parties for the development of our solutions, and our inability to maintain those licenses could harm our business.***

We currently incorporate, and will in the future incorporate, technology that we license from third parties, including software, into our offerings. If we are unable to continue to use or license these technologies on reasonable terms, or if these technologies become unreliable, unavailable, or fail to operate properly, we may not be able to secure adequate alternatives in a timely manner or at all, and our ability to offer our solutions and remain competitive in our market would be harmed. Further, licensing technologies from third parties exposes us to increased risk of being the subject of intellectual property infringement and vulnerabilities due to, among other things, our lower level of visibility into the development process with respect to such technology and the care taken to safeguard against risks. We cannot be certain that our licensors do not or will not infringe on the intellectual property rights of third parties or that our licensors have or will have sufficient rights to the licensed intellectual property in all jurisdictions in which we may sell our platform. Some of our agreements with our licensors may be terminated by them for convenience, or otherwise provide for a limited term. If we are unable to continue to license technology because of intellectual property infringement claims brought by third parties against our licensors or against us, or if we are unable to continue our license agreements or enter into new licenses on commercially reasonable terms, our ability to develop and sell our platform containing or dependent on that technology would be limited, and our business, including our financial condition, cash flows, and operating results could be harmed.

Additionally, if we are unable to license technology from third parties, we may be forced to acquire or develop alternative technology, which we may be unable to do in a commercially feasible manner, or at all, and may require us to use alternative technology of lower quality or performance standards. This could limit or delay our ability to offer new or competitive offerings and increase our costs. Third-party software we rely on may be updated infrequently, unsupported, or subject to vulnerabilities that may not be resolved in a timely manner, any of which may expose our solutions to vulnerabilities. Any impairment of the technologies or of our relationship with these third parties could harm our business, operating results, financial condition, and future prospects.

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***Some of our technology stack incorporates*** "***open-source***" ***software, and failure to comply with the terms of the underlying open-source software licenses could adversely affect our business, results of operations, financial condition, and future prospects.***

We use open-source software in our solutions and services and may continue to do so in the future. In particular, we use open-source components in certain observability and deployment tools, such as Netbox, Observium, Zabbix, Ansible, Prometheus, and Docker. Certain open-source licenses contain requirements that we make available source code for modifications or derivative works we create. If we combine our proprietary software with open-source software in a certain manner, we could, under certain open-source licenses, be required to release the source code of our proprietary software to the public on unfavorable terms or at no cost. Any actual or claimed requirement to disclose our proprietary source code or pay damages for breach of contract may allow our competitors to create similar products with lower development effort and time and, ultimately, could result in a loss of sales for us.

The use and distribution of open-source software may entail greater risks than the use of third-party commercial software, as open-source licensors generally do not provide support, warranties, indemnification or other contractual protections regarding infringement claims or the quality of the code, which they are not typically required to maintain and update, and they can change the license terms on which they offer the open-source software. Although we believe that we have complied with our obligations under the applicable licenses for open-source software, it is possible that we may not be aware of all instances where open-source software has been incorporated into our proprietary software or used in connection with our solutions or our corresponding obligations under open-source. We take steps to monitor our use of open-source software in an effort both to comply with the terms of the applicable open-source licenses and to avoid subjecting our platform to conditions we do not intend, but there are risks associated with use of open-source software that cannot be eliminated and could negatively affect our business. We rely on multiple software programmers to design our proprietary software and, while we take steps to vet software before it is incorporated into our proprietary software and monitor the software incorporated into our proprietary software, we cannot be certain that our programmers have not incorporated open-source software into our proprietary software that we intend to maintain as confidential or that they will not do so in the future. In addition, the wide availability of source code used in our offerings could expose us to security vulnerabilities. Such use, under certain circumstances, could materially adversely affect our business, operating results, financial condition, and future prospects, as well as our reputation, including if we are required to take remedial action that may divert resources away from our development efforts.

On occasion, companies that use open-source software have faced claims challenging their use of open-source software or compliance with open-source license terms. There is evolving legal precedent for interpreting the terms of certain open-source licenses, including the determination of which works are subject to the terms of such licenses. The terms of many open-source licenses have not been interpreted by U.S. courts, and there is a risk that these licenses could be construed in ways that could impose unanticipated conditions or restrictions on our ability to commercialize any offerings incorporating such software. Moreover, we cannot ensure that our processes for controlling our use of open-source software in our platform will be effective. From time to time, we may face claims from third parties asserting ownership of, or demanding release of, the open-source software or derivative works that we developed using such software (which could include our proprietary source code), or otherwise seeking to enforce the terms of the applicable open-source license. These claims, regardless of validity, could result in time consuming and costly litigation, divert management's time and attention away from developing the business, expose us to customer indemnity claims, or force us to disclose source code. Litigation could be costly for us to defend, result in paying damages, entering into unfavorable licenses, have a negative effect on our business, operating results. financial condition, and future prospects, or cause delays by requiring us to devote additional research and development resources to change our solution.

**Risks Related to Legal and Regulatory Matters**

***We are subject to laws, regulations, and industry requirements related to data privacy, data protection and information security, and user protection across different markets where we conduct our business and such laws, regulations, and industry requirements are constantly evolving and changing. Any actual or perceived failure to comply with such laws, regulations, and industry requirements, or our privacy policies, could harm our business.***

Various local, state, federal, and international laws, directives, and regulations apply to our collection, use, retention, protection, disclosure, transfer, and processing of personal information. These data protection and privacy laws and regulations are subject to uncertainty and continue to evolve in ways that could adversely impact our business. These laws have a substantial impact on our operations and compliance with new and existing laws may result in significant costs due to implementation of new processes, which could ultimately hinder our ability to grow our business by extracting value from our data assets.

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In the United States, state and federal lawmakers and regulatory authorities have increased their attention on the collection and use of user data. For example, in California, the California Consumer Privacy Act of 2018 (as amended, the "CCPA") requires companies that hit certain broad revenue or data processing related thresholds to, among other things, provide new disclosures to California users, and affords such users new privacy rights such as the ability to opt-out of certain processing of personal information and expanded rights to access and require deletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is collected, used, and shared. The CCPA provides for civil penalties for violations, as well as a private right of action for security breaches that may increase security breach litigation. In addition, other states have enacted laws that contain obligations similar to the CCPA that have taken effect or will take effect in coming years and many others continue to propose similar laws, or are considering proposing similar laws. We cannot fully predict the impact of recently proposed or enacted laws or regulations on our business or operations, but compliance may require us to modify our data processing practices and policies incurring costs and expense. Further, to the extent multiple state-level laws are introduced with inconsistent or conflicting standards, it may require costly and difficult efforts to achieve compliance with such laws. Our failure or perceived failure to comply with state or federal privacy laws or regulations passed in the future could have a material adverse effect on our business, including how we use personal information, our business, operating results, financial condition, and future prospects and could expose us to regulatory investigations or possible fines.

Additionally, many foreign countries and governmental bodies, including the European Union, United Kingdom and Canada, have laws and regulations concerning the collection, use, processing, storage, and deletion of personal data obtained from their residents or by businesses operating within their jurisdiction. These laws and regulations often are more restrictive than those in the United States. Such laws and regulations may require companies to implement new privacy and security policies, permit individuals to access, correct, and delete personal information stored or maintained by such companies, inform individuals of security breaches that affect their personal information, require that certain types of data be retained on local servers within these jurisdictions, and, in some cases, obtain individuals' affirmative opt-in consent to collect and use personal information for certain purposes. The increased focus on data sovereignty and data localization requirements around the world could also impact our business model with respect to the storage, management, and transfer of data.

We may become subject to the European Union's General Data Protection Regulation and the United Kingdom's General Data Protection Regulation (collectively, the "GDPR"), which comprehensively regulate our use of personal data, including cross-border transfers of personal data out of the European Economic Area ("EEA") and the U.K. The GDPR imposes stringent privacy and data protection requirements and could increase the risk of non-compliance and the costs of providing our services in a compliant manner. A breach of the GDPR could result in regulatory investigations, reputational damage, fines and sanctions, orders to cease or change our processing of our data, enforcement notices, or assessment notices (for a compulsory audit).

Additionally, the European Union has recently adopted the EU AI Act, which establishes a comprehensive regulatory framework for the development, deployment, and use of artificial intelligence systems within the EU. Although the precise scope and requirements of the EU AI Act are still being clarified, it is expected to impose significant obligations on providers and users of AI systems, including risk assessments, transparency requirements, human oversight, and potential restrictions on certain high-risk AI applications. As we expand our operations or offer services to customers in the European Union, we may be required to comply with the EU AI Act and related regulations. Compliance may require us to implement new processes, invest in additional resources, or modify our AI-powered solutions, which could increase operational costs, delay product launches, or limit our ability to offer certain services in the EU. Failure to comply with the EU AI Act could result in substantial fines, regulatory investigations, and reputational harm.

We are also subject to evolving privacy laws governing cookies, tracking technologies, and e-marketing. In the United States, plaintiffs are increasingly making use of existing laws such as the California Invasion of Privacy Act to litigate use of tracking technologies. This could lead to substantial costs, require significant systems changes, limit the effectiveness of our marketing activities, divert the attention of our technology personnel, negatively impact our efforts to understand users, adversely affect our margins, increase costs, and subject us to additional liabilities.

There is a risk that as we expand, we may assume liabilities for breaches experienced by the companies we acquire. Additionally, there are potentially inconsistent world-wide government regulations pertaining to data protection and privacy. Despite our efforts to comply with applicable laws, regulations and other obligations relating to privacy, data protection, and information security, it is possible that our practices, offerings, or platform could fail, or be alleged to fail to meet applicable requirements. For instance, there are changes in the regulatory landscape relating to new and evolving technologies, such as generative AI. Changes to existing regulations, their interpretation or implementation, or new regulations could impede any potential use or development of AI Technologies, which could impair our competitive position and result in an adverse effect on our business, operating results, financial condition, and future prospects. Our failure, or the failure by our third-party providers or partners, to comply with applicable laws or regulations and to prevent unauthorized access to, or use or release of personal information, or the perception that any of the foregoing types of failure has occurred, even if unfounded, could subject us to audits, inquiries, whistleblower complaints, adverse media coverage, investigations, severe criminal, or civil sanctions, damage our reputation, or result in fines or proceedings by governmental agencies and private claims and litigation, any of which could adversely affect our business, operating results, financial condition, and future prospects.

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***Our business is subject to a wide range of laws and regulations, and our failure to comply with those laws and regulations could harm our business.***

Our business is subject to regulation by various federal, state, local, and foreign governmental agencies, including agencies responsible for monitoring and enforcing employment and labor laws, workplace safety and environmental laws, including those related to energy usage and energy efficiency requirements, privacy and data protection laws, AI, financial services laws, anti-bribery laws, sanctions, national security, import and export controls, anti-boycott, federal securities laws, and tax laws and regulations.

For example, governmental authorities have in the past sought to restrict data center development based on environmental considerations and have imposed moratoria on data center development, citing concerns about energy usage, requiring new data centers to meet energy efficiency requirements. We may face higher costs from any laws requiring enhanced energy efficiency measures, changes to cooling systems, caps on energy usage, land use restrictions, limitations on back-up power sources, or other environmental requirements.

***We are subject to laws and regulations, including governmental export and import controls, sanctions, and anti-corruption laws, that could impair our ability to compete in our markets and subject us to liability if we are not in full compliance with applicable laws.***

We are subject to laws and regulations, including governmental export and import controls, that could subject us to liability or impair our ability to compete in other markets. Our platform and related technology are subject to U.S. export controls, including the U.S. Department of Commerce's Export Administration Regulations (also known as "EAR"), and we and our employees, representatives, contractors, agents, intermediaries, and other third parties are also subject to various economic and trade sanctions regulations administered by the U.S. Treasury Department's Office of Foreign Assets Control and other U.S. government agencies. Changes to sanctions, tariffs, and other export or import restrictions in the jurisdictions in which we operate could further impact our ability to do business in certain parts of the world and to do business with certain persons and entities, which could adversely affect our business, operating results, financial condition, and future prospects. In particular, we are continuing to monitor recent and forthcoming developments in export controls with respect to the semiconductor industry and their impact on our sourcing of equipment for our computing infrastructure.

We are also subject to the United States Foreign Corrupt Practices Act of 1977, as amended ("FCPA"), and other anti-corruption, sanctions, anti-bribery, anti-money laundering, and similar laws. Anti-corruption and anti-bribery laws, which have been enforced aggressively and are interpreted broadly, prohibit companies and their employees, agents, intermediaries, and other third parties from promising, authorizing, making, or offering improper payments or other benefits to government officials and others in the public, and in certain cases, private sector. We cannot ensure that our policies and procedures to address compliance with FCPA and other anti-corruption, sanctions, anti-bribery, anti-money laundering, and similar laws, will be effective, or that all of our employees, representatives, contractors, partners, agents, intermediaries, or other third parties have not taken, or will not take actions, in violation of our policies and applicable law, for which we may be ultimately held responsible. Noncompliance with these laws could subject us to investigations, severe criminal or civil sanctions, settlements, prosecution, loss of export privileges, suspension or debarment from U.S. government contracts, other enforcement actions, disgorgement of profits, significant fines, damages, other civil and criminal penalties or injunctions, whistleblower complaints, adverse media coverage, and other consequences. Any investigations, actions, or sanctions could harm our reputation, business, operating results, financial condition, and future prospects.

***We may become involved in litigation that may adversely affect us.***

From time to time, we may be subject to claims, suits, and other proceedings. Regardless of the outcome, legal proceedings can have an adverse impact on us because of legal costs and diversion of management attention and resources, and could cause us to incur significant expenses or liability, adversely affect our brand recognition, or require us to change our business practices. The expense of litigation and the timing of this expense from period to period are difficult to estimate, subject to change, and could adversely affect our business, operating results, financial condition, and future prospects. It is possible that a resolution of one or more such proceedings could result in substantial damages, settlement costs, fines, and penalties that would adversely affect our business, consolidated financial condition, operating results, or cash flows in a particular period. These proceedings could also result in reputational harm, sanctions, consent decrees, or orders requiring a change in our business practices. Because of the potential risks, expenses, and uncertainties of litigation, we may, from time to time, settle disputes, even where we have meritorious claims or defenses, by agreeing to settlement agreements. Because litigation is inherently unpredictable, we cannot ensure that the results of any of these actions will not have a material adverse effect on our business, operating results, financial condition, and prospects. Any of these consequences could adversely affect our business, operating results, financial condition, and future prospects.

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**Risks Related to Financial and Accounting Matters**

***There is uncertainty regarding our ability to continue as a going concern.***

As discussed in Note 1 to our consolidated financial statements for the year ended December 31, 2025, losses since inception resulted in an accumulated deficit of $37,546,254 as of December 31, 2025. For the year ended December 31, 2025, we had operating cash outflows of $5,677,062 and had an operating loss of $10,259,177. Our operations have been funded partially through the issuance of debt. These factors raise substantial doubt about the Company's ability to continue as a going concern. Our plans in regard to these matters are also described in Note 1 to our consolidated financial statements, and these plans alleviate the substantial doubt about the Company's ability to continue as a going concern. However, in light of this uncertainty, there is increased risk that you could lose the entire amount of your investment in us. The financial statements included in this report do not include any adjustments that might result from the outcome of this uncertainty.

***We have identified material weaknesses in our internal control over financial reporting and cannot provide assurances that these weaknesses will be effectively remediated or that additional material weaknesses will not occur in the future.***

If our internal control over financial reporting or its disclosure controls and procedures are not effective, we may not be able to accurately report our financial results, which may cause investors to lose confidence in our reported financial information and, once listed, may lead to a decline in our stock price.

Management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of an evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

In connection with the audit of our consolidated financial statements for the fiscal years ended December 31, 2025 and December 31, 2024, we identified certain control deficiencies in the design and implementation of our internal control over financial reporting that constituted material weaknesses. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. We additionally identified significant deficiencies that did not amount to material weaknesses.

The material weaknesses we identified were (1) a lack of a formalized control environment and oversight of controls over financial reporting; (2) a lack of proper accounting for significant or non-recurring transactions, including in particular warrant evaluation and equity-related transactions; and (3) a lack of appropriate segregation of duties to permit appropriate review of accounting transactions and/or accounting treatment by multiple qualified individuals and to prevent one individual from being able to override the internal control environment by initiating, authorizing, and completing transactions. These material weaknesses, if not remediated, could result in a material misstatement of one or more disclosures in our annual or interim financial statements that would not be prevented or detected in a timely manner. In addition to the foregoing material weaknesses, we identified significant deficiencies in our accounting treatment of stock-based compensation expense and our lack of an enterprise resource planning system ("ERP").

Our management is implementing measures designed to improve our internal control over financial reporting to remediate the identified material weaknesses. The remediation actions we are taking, and expect to take, to correct the lack of a formalized control environment and oversight of controls over financial reporting include the following: (1) we hired Michael Maniscalco as our Chief Executive Officer, Ryan DiRocco as our Chief Technology Officer, and Stephen Hunton as our Chief Marketing Officer, and appointed Homaira Akbari, Stacy Kenworthy, Michael Mulica, David Rench and Barry Schwartz as independent directors of the Board to provide a foundation for a formal approval and control process; and (2) we implemented an ERP and an accounts payable payment platform effective February 2026. To correct the lack of proper accounting for significant or non-recurring transactions, we implemented Board approval on all warrant issuances and monthly recording of awards based on the latest 409(a) valuation, which policy will be updated once the direct listing is completed to instead be based on the Company's stock price as reported by Nasdaq. The remediation actions we are taking, and expect to take, to correct the lack of appropriate segregation of duties include the following: (1) in September 2025, we hired a Senior Vice President, Finance; (2) we implemented an ERP and an accounts payable platform effective February 2026; (3) we engaged outside consultants to review business process analysis and flow of data to the accounting software platform and financial reporting; and (4) we hired a corporate controller in January 2026 to oversee the Company and its subsidiaries. To resolve the significant deficiencies, in addition to the implementation of an ERP and an accounts payable platform, our Chief Financial Officer and Senior Vice President, Finance are reviewing option grants and stock-based compensation with the monthly close. We expect to incur approximately annual expenses of $675,000 to $825,000 in connection with all remediation activities.

While we are taking steps to remediate the material weaknesses and significant deficiencies, we cannot provide any assurance that such remedial measures, or any other remedial measures we take, will be effective. If we fail to maintain effective internal control over financial reporting, we may not be able to accurately report our financial results, which may, among other adverse consequences, cause investors to lose confidence in our reported financial information and lead to a decline in our stock price. In addition, a material weakness will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are designed and operating effectively.

***We will incur significant increased costs and management resources as a result of operating as a public company.***

As a public company, we will incur significant legal, accounting, compliance, and other expenses that we did not incur as a private company. Our management and other personnel will need to devote a substantial amount of time and incur significant expense in connection with compliance initiatives. For example, in anticipation of becoming a public company, we will adopt additional internal controls and disclosure controls and procedures, retain a transfer agent, and adopt an insider trading policy. As a public company, we will bear all of the internal and external costs of preparing and distributing periodic public reports in compliance with our obligations under the securities laws.

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In addition, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act, and the related rules and regulations implemented by the SEC have increased legal and financial compliance costs and will make some compliance activities more time-consuming. We intend to invest resources to comply with evolving laws, regulations, and standards, and this investment will result in increased general and administrative expenses and may divert management's time and attention from our other business activities. If our efforts to comply with new laws, regulations, and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice, regulatory authorities may initiate legal proceedings against us, and our business may be harmed. In connection with this offering, we intend to increase our directors' and officers' insurance coverage, which will increase our insurance cost. In the future, it may be more expensive or more difficult for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain and maintain the same or similar coverage. These factors would also make it more difficult for us to attract and retain qualified members of our Board, particularly to serve on our audit committee and compensation committee, and qualified executive officers.

***The unaudited pro forma financial information included in this prospectus is presented for illustrative purposes only and should not be viewed as a forecast of our financial condition or results of operations following our acquisition of The Cloud Minders, Inc.***

The unaudited pro forma financial information has been derived from the historical financial statements of the Company and TCM, and certain adjustments and assumptions have been made regarding the Company after giving effect to the acquisition. The information upon which these adjustments and assumptions have been made is preliminary, and these kinds of adjustments and assumptions are difficult to make with complete accuracy. Moreover, the unaudited pro forma financial information does not reflect all costs that may be incurred or savings to be achieved in connection with the acquisition. For example, neither the impact of any incremental costs incurred in integrating TCM's operations into the Company, nor any potential cost savings is reflected in the unaudited pro forma financial information. As a result, the actual financial condition and results of operations of the Company following the acquisition will likely not be consistent with, may not be evident from, and may differ materially from, the unaudited pro forma financial information. In addition, the assumptions used in preparing the unaudited pro forma financial information may not prove to be accurate, and other factors may affect our financial conditions or results of operations following the acquisition. Shareholders should not place undue reliance on the pro forma financial information. Please refer to the section entitled "*Unaudited Pro Forma Condensed Combined Financial Information*" for more information.

***We could be subject to additional tax liabilities, and United States federal and global income tax reform could adversely affect us.***

We are subject to U.S. federal, state, and local income taxes, sales, and other taxes in the United States. Significant judgment is required in evaluating our tax positions and our provision for income taxes. During the ordinary course of business, there are many activities and transactions for which the ultimate tax determination is uncertain. In addition, our future income tax obligations could be adversely affected by changes in, or interpretations of, tax laws in the United States or in other jurisdictions in which we may operate.

For example, the United States tax law legislation commonly referred to as the Tax Cuts and Jobs Act of 2017 (the "Tax Cuts and Jobs Act") significantly reformed the U.S. Internal Revenue Code of 1986, as amended (the "Code"), reducing U.S. federal tax rates, making sweeping changes to rules governing international business operations, and imposing significant additional limitations on tax benefits, including the deductibility of interest and the use of net operating loss ("NOL") carryforwards. Effective for taxable years beginning on or after January 1, 2022, the Tax Cuts and Jobs Act also required capitalization of research and certain software development expenses and amortization of such expenses over a period of five years if incurred in the United States and fifteen years if incurred outside the United States. On August 16, 2022, the Inflation Reduction Act of 2022 (the "IRA") was enacted into law. The IRA contains certain tax measures, including a corporate alternative minimum tax of 15% on some large corporations and an excise tax of 1% on certain corporate stock buy-backs taking place after December 31, 2022.

On July 4, 2025, the U.S. enacted a budget reconciliation package known as the One Big Beautiful Bill Act of 2025 ("OBBBA"). The OBBBA includes the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act described above, modifications to the international tax framework and the restoration and continuation of favorable tax treatment for certain business provisions, including immediate expensing for domestic research expenditures paid or incurred beginning January 1, 2025. Additionally, the OBBBA allows accelerated tax deductions for qualified property by making permanent the 100% first-year bonus depreciation deduction that previously existed for purchases of tangible personal property with a recovery period of 20 years or less and allowing a similar 100% deduction for certain "qualified production property" that did not previously qualify for an immediate deduction. The OBBBA introduces other legislative changes, including the restoration of deductible net business interest expense under Code Section 163(j) to 30% of earnings before interest, taxes, depreciation and amortization ("EBITDA") and again allowing an addback of depreciation and amortization in the calculation of the interest deduction limitation. The OBBBA also provides that certain capitalized interest will now be treated as a business interest expense subject to the Section 163(j) limitation. The OBBBA enacted the repeal or acceleration of the sunset of certain tax credits under the IRA and elimination of certain penalties for violations of certain regulatory credit programs. The OBBBA also makes significant changes to international tax provisions, including provisions addressing the global intangible low-taxed income ("GILTI"), foreign-derived intangible income ("FDII"), base erosion anti-abuse tax ("BEAT") and controlled foreign corporation ("CFC") rules. The Company is currently assessing the impact of the OBBBA on its consolidated financial statements. Changes in tax laws may affect recorded deferred tax assets and deferred tax liabilities and may increase our effective tax rate, increase the amount of taxes imposed on our business, and harm our financial position. Such changes may also apply retroactively to our historical operations and result in taxes greater than the amounts estimated and recorded in our financial statements.

***Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.***

As of December 31, 2025, we had aggregate U.S. federal and state NOL carryforwards of $8,148,363, which may be available to offset future taxable income for U.S. income tax purposes. All NOLs were generated after the enactment of the Tax Cuts and Jobs Act and, as such, are carried forward indefinitely but can only be utilized to offset up to 80% of taxable income in any given year. Realization of these net operating loss depends on our future taxable income.

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In addition, under Sections 382 and 383 of the Code, if a corporation undergoes an "ownership change," generally defined as a greater than 50% cumulative change (by value) in ownership by "5 percent shareholders" over a rolling three-year period, the corporation's ability to use its pre-change NOLs and other pre-change tax attributes, such as research and development credits, to offset its post-change income or taxes may be limited. We may experience ownership changes as a result of shifts in our stock ownership, including as a result of the offering. As a result, if we earn net taxable income, our ability to use our pre-change U.S. NOL carryforwards and other tax attributes to offset U.S. federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to us. Similar provisions of state tax law may also apply to limit our use of accumulated state tax NOLs. In addition, at the state level, there may be periods during which the use of NOLs is suspended or otherwise limited, which could accelerate or permanently increase our state income tax liabilities. As a result of the foregoing, even if we attain profitability, we may be unable to use all or a material portion of our NOLs and other tax attributes, which could adversely affect our future cash flows.

***We could be required to collect additional sales, use, value added, digital services, or other similar taxes or be subject to other liabilities with respect to past or future sales, that may increase the costs our customers would have to pay for our solutions and adversely affect our business, operating results, financial condition, and future prospects.***

We do not collect sales and use, value added, or similar taxes in all jurisdictions in which we have sales because we have determined in consultation with our advisors that our sales in certain jurisdictions are not subject to such taxes. Sales and use, value added, and similar tax laws and rates vary greatly by jurisdiction and the application of such laws is subject to uncertainty. Jurisdictions in which we do not collect such taxes may assert that such taxes apply to our sales and seek to impose incremental or new sales, use, value added, digital services, or assert other tax collection obligations on us, which could result in tax assessments, penalties, and interest, to us or our customers for past sales, and we may be required to collect such taxes in the future. If we are unsuccessful in collecting such taxes from our customers, we could be held liable for such costs, which may adversely affect our operating results.

Further, an increasing number of U.S. states have considered or adopted laws that attempt to impose tax collection obligations on out-of-state companies. A successful assertion by one or more U.S. states requiring us to collect taxes where we presently do not do so, or to collect more taxes in a jurisdiction in which we currently collect such taxes, could result in substantial liabilities, including taxes on past sales, as well as interest and penalties. Furthermore, certain foreign jurisdictions have enacted or proposed to enact a digital services tax, which is generally a tax on gross revenue generated from users or customers located in those jurisdictions, and other jurisdictions are considering enacting similar laws. A successful assertion by a U.S. state or local government or a foreign jurisdiction that we should have been or should be collecting additional sales, use, value added, digital services, or other similar taxes could, among other things, result in substantial tax payments, create significant administrative burdens for us, discourage potential customers from using our platform due to the incremental cost of any such sales or other related taxes, or otherwise harm our business.

***If our estimates or judgments relating to our critical accounting policies prove to be incorrect or financial reporting standards or interpretations change, our operating results could be adversely affected.***

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as discussed in the section titled "*Management*'*s Discussion and Analysis of Financial Condition and Results of Operations*—*Critical Accounting Estimates*." The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities and equity, and the amount of revenue and expenses that are not readily apparent from other sources. Significant assumptions and estimates used in preparing our consolidated financial statements include but are not limited to those related to the identification of performance obligations in revenue recognition, the valuation of stock-based awards, the valuation of derivatives and warrants, and accounting for leases, property and equipment, income taxes and variable interest entities. Our operating results may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our operating results to fall below the expectations of industry or financial analysts and investors, resulting in a potential decline in the market price of our common stock.

Additionally, we regularly monitor our compliance with applicable financial reporting standards and review new pronouncements and drafts thereof that are relevant to us. As a result of new standards, changes to existing standards, and changes in their interpretation, we might be required to change our accounting policies, alter our operational policies, and implement new or enhance existing systems so that they reflect new or amended financial reporting standards, or we may be required to restate our published financial statements. Such changes to existing standards or changes in their interpretation may have an adverse effect on our reputation, business, financial condition, and profit, or cause an adverse deviation from our revenue and operating profit target, which may adversely affect our financial results.

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**Risks Related to Our Indebtedness**

***Our substantial indebtedness could materially adversely affect our financial condition, our ability to raise additional capital to fund our operations, our ability to operate our business, our ability to react to changes in the economy or our industry, our ability to meet our obligations under our outstanding indebtedness and could divert our cash flow from operations for debt payments, and we may still incur substantially more indebtedness in the future.***

We have a substantial amount of debt, which requires significant interest and principal payments. As of December 31, 2025, our total indebtedness, excluding warrant liabilities, was $25,059,407. In addition to our substantial debt, we lease all of our data centers and certain equipment under lease agreements, some of which are accounted for as operating leases. As of December 31, 2025, we recorded operating lease liabilities of $1,595,012, which represents our obligation to make lease payments under those lease arrangements. We may be able to incur substantial additional debt from time to time to finance working capital, capital expenditures, investments or acquisitions, or for other purposes. If we do so, the risks related to our high level of debt could increase. Specifically, our high level of debt could have important consequences, including the following:

● it may be difficult for us to satisfy our obligations, including debt service requirements under our outstanding debt;

● our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions, or other general corporate purposes may be impaired;

● a substantial portion of cash flow from operations are required to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our ability to use our cash flow to fund our operations, capital expenditures, future business opportunities, and other purposes;

● we could be more vulnerable to economic downturns and adverse industry conditions and our flexibility to plan for, or react to, changes in our business or industry is more limited;

● our ability to capitalize on business opportunities and to react to competitive pressures, as compared to our competitors, may be compromised due to our high level of debt and the restrictive covenants in the agreements that govern our indebtedness;

● our ability to borrow additional funds or to refinance debt may be limited; and

● it may cause potential or existing customers to not contract with us due to concerns over our ability to meet our financial obligations under such contracts.

Our ability to make scheduled payments on and to refinance our indebtedness depends on and is subject to our financial and operating performance, which in turn is affected by general and regional economic, financial, competitive, business and other factors, all of which are beyond our control, including the availability of financing in the banking and capital markets. We cannot ensure that our business will generate sufficient cash flow from operations or that future borrowings will be available to us in an amount sufficient to enable us to service our debt, to refinance our debt or to fund our other liquidity needs. If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to dispose of material assets or operations, seek additional debt or equity capital or restructure or refinance our indebtedness. Further, any refinancing or restructuring of our indebtedness could be at higher interest rates, may cause us to incur debt extinguishment costs, and may require us to comply with more onerous covenants that could further restrict our business operations. Moreover, in the event of a default, the holders of our indebtedness could elect to declare such indebtedness be due and payable. Financing through debt has historically been an important source of additional capital for us, and we may require additional financing to sustain our operations in the future, without which we may not be able to continue operations, and the terms of subsequent financings may adversely impact our shareholders.

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 ***Our facility with ATW AI Opportunities LLC may adversely impact our business and future operations and cause our shareholders to experience dilution, and the security interest granted thereunder may prevent shareholders from recovering their capital if the Company liquidates.***

On March 26, 2026, we entered into a securities purchase agreement with ATW AI Opportunities LLC, pursuant to which we agreed to issue and sell senior secured convertible notes in an aggregate principal amount of up to $45,000,000 (the "ATW Notes"). As described in the section entitled "*Management's Discussion and Analysis of Financial Condition and Results of Operations – Recent Developments*," the notes are being issued in multiple tranches, with the first senior secured convertible note in an aggregate principal amount of $15,000,000 sold to ATW AI Opportunities LLC on March 26, 2026 (the "Initial ATW Note"). The Initial ATW Note will mature on March 26, 2028, subject to certain conditions; provided that if the public listing of our common stock has not occurred by the agreed upon deadline, ATW AI Opportunities LLC may redeem any outstanding ATW Notes, or we may elect to repay in full all outstanding ATW Notes. Any such redemption or repayment may constrain our capital resources and adversely impact our business and future operations.

Additionally, the ATW Notes are convertible into shares of our common stock. For 24 months following the closing, ATW AI Opportunities LLC also has the right to co-invest for at least 15% of any of our future financing transactions on the same terms as other investors. Upon conversion of the ATW Notes or upon further investment by ATW AI Opportunities LLC pursuant to its right to co-invest, other shareholders may suffer significant dilution.

Finally, the ATW Notes are secured by a senior security interest in the collateral granted by us under the security documents, including a first-priority perfected lien on our personal property and a pledge of the ownership interests of our three direct wholly owned subsidiaries, but not a direct lien on the assets of those subsidiaries except as provided in the transaction documents. In the case of a liquidation event, ATW AI Opportunities LLC would receive proceeds pursuant to its security interest before any distributions are made to the shareholders, which may have the effect of preventing shareholders from recovering their capital.

***Our indebtedness may impose significant operating and financial restrictions on us and our subsidiaries, which may prevent us from capitalizing on business opportunities.***

Our debt arrangements impose significant operating and financial restrictions on us, and future debt arrangements we may enter into may include similar restrictions. These restrictions may limit our ability and/or the ability of our subsidiaries to, among other things, sell, offer to sell or otherwise transfer collateral without the lender's prior written consent; pledge, mortgage, encumber or otherwise permit collateral to be subject to any lien, security interest, encumbrance or charge; or engage in any transactions that would constitute a change of control. These restrictions may prevent us from engaging in and capitalizing on business opportunities that may arise from time to time.

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

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

This is not an initial public offering of common stock conducted on a firm-commitment underwritten basis. This listing of our common stock on the Nasdaq Global Market tier of the Nasdaq Stock Market ("Nasdaq") differs from a firm-commitment underwritten initial public offering in several significant ways, which include, but are not limited to, the following:

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

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

● Other than our directors, officers and greater than 10% shareholders, none of our Registered Shareholders or other existing shareholders have entered into contractual lock-up agreements or other contractual restrictions on transfer that are applicable to the Direct Listing. Our directors, named executive officers and certain other shareholders are additionally subject to restrictions as to the number of shares of common stock each may dispose of in any given period. In a firm-commitment underwritten initial public offering, it is customary for an issuer's officers, directors, and most of its other shareholders to enter into a 180-day contractual lock-up arrangement with the underwriters to help promote orderly trading immediately after listing. Consequently, any of our shareholders, with the exception of our directors, officers and greater than 10% shareholders, may sell any or all of their common stock at any time (subject to any restrictions under applicable law), including immediately upon listing. The shares being registered herein may be freely sold in market transactions following the listing and upon effectiveness of this registration statement, shares issued upon the exercise of the warrants may be freely sold upon effectiveness of a subsequent registration statement covering such shares, such shares may be freely sold in reliance on an exemption from registration subject to Rule 144 ("Rule 144") under the Securities Act of 1933, as amended (the "Securities Act"). All the shares of common stock subject to stock options outstanding and reserved for issuance under the Global Digital Holdings, Inc. 2022 Option Plan (as amended, the "2022 Plan") and the QumulusAI, Inc. 2026 Equity Incentive Plan (the "2026 Plan") are expected to be registered on Form S-8 under the Securities Act and such shares are eligible for sale in the public markets, subject to the limitations applicable to affiliates under Rule 144. If such sales were to occur in significant quantities, it may result in an oversupply of our common stock in the market, which could adversely impact the public price of our common stock. See "*Our shares of common stock currently have no public market. An active trading market may not develop or continue to be liquid and the market price of our shares of common stock may be volatile*." None of our shareholders are party to any contractual lock-up agreement or other contractual restrictions on transfer. Sales of substantial amounts of our common stock in the public markets by our founders, affiliates, or non-affiliates, or the perception that such sales might occur, could reduce the price that our common stock might otherwise attain and may dilute your voting power and your ownership interest in us.

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● We will not conduct a traditional "roadshow" with underwriters prior to the opening of trading on Nasdaq. Instead, we may host an investor day, as well as engage in certain other investor education meetings. In advance of the investor day, we will announce the date for such day over financial news outlets in a manner consistent with typical corporate outreach to investors. We will prepare an electronic presentation for this investor day, which will have content similar to a traditional roadshow presentation, and make one version of the presentation publicly available, without restriction, on a website. There can be no guarantees that the investor day and other investor education meetings will have the same impact on investor education as a traditional "roadshow" conducted in connection with a firm-commitment underwritten initial public offering. As a result, there may not be efficient price discovery with respect to our common stock or sufficient demand among investors immediately after our listing, which could result in a more volatile public price of our common stock.

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

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

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

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

***Limitations on investors***' ***ability to trace their shares to this registration statement may preclude claims under Sections 11 and 12 of the Securities Act, potentially reducing our liability exposure and limiting investors***' ***remedies.***

Historically, shareholders who purchase securities pursuant, or "traceable," to a registration statement filed in connection with an underwritten public offering have had standing to assert claims against the issuer and others under the Securities Act. However, due to the different structure and mechanics of a direct listing, investors may be unable to "trace" their shares to this registration statement, which may preclude claims under Sections 11 and 12 of the Securities Act. The U.S. Court of Appeals for the Ninth Circuit ruled in *Pirani v. Slack Technologies, Inc.*, No. 20-16418 (9th Cir. 2021) (the "Slack Standing Case") that investors in a direct listing do have standing to sue under the Securities Act, rejecting the contrary argument that investors cannot trace their securities to the registration in a direct listing and thus lack standing to bring claims under the Securities Act. Thereafter, the U.S. Supreme Court heard an appeal of the Slack Standing Case, and issued its opinion on June 1, 2023 in *Slack Technologies LLC, FKA Slack Technologies, Inc. v. Pirani, et al.*, Case No. 22-200. The U.S. Supreme Court held that Section 11 of the Securities Act "requires a plaintiff to plead and prove that he purchased shares traceable to the allegedly defective registration statement," as opposed to unregistered shares. The U.S. Supreme Court then remanded the case to the U.S. Court of Appeals for the Ninth Circuit to decide whether the plaintiff's pleadings satisfy Section 11(a) of the Securities Act. The Supreme Court also declined to resolve the parties' dispute regarding the viability of claims under Section 12 of the Securities Act. The U.S. Court of Appeals for the Ninth Circuit, in its 2025 opinion on remand, confirmed that the tracing requirement applies in the context of direct listings and that tracing shares to a registration statement is particularly difficult where registered and unregistered shares begin trading at the same time. Accordingly, if you purchase our common stock in the open market following this direct listing, you may not be able to assert claims under Section 11 or Section 12(a)(2) of the Securities Act for any material misstatements or omissions in this registration statement or related prospectus. This limitation may reduce the potential remedies available to investors, limit recovery in the event of a violation of the federal securities laws, and adversely affect the market price of our common stock. Moreover, because our potential liability under the Securities Act may be reduced as compared to a traditional initial public offering, investors may face greater risk in the event of inaccurate or incomplete disclosures.

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

We expect our shares of common stock to be listed and traded on Nasdaq. Neither we nor the Registered Shareholders (except Chardan) will be involved in the price setting process. Additionally, the price of our shares in prior private transactions may have little or no relation to the opening price and subsequent public price of our stock on Nasdaq. We have engaged a third-party firm to conduct a valuation pursuant to Nasdaq's listing qualification rules and requirements. Prior to the listing on Nasdaq, there has not been a public market for our shares of common stock, and an active market for our shares of common stock may not develop or be sustained after the listing, which could depress the market price of our shares of common stock and could affect the ability of our shareholders to sell our shares of common stock. In the absence of an active public trading market, investors may not be able to liquidate their investments in our shares of common stock. An inactive market may also impair our ability to raise capital by selling our shares of common stock, our ability to motivate our employees through equity incentive awards and our ability to acquire other companies, products or technologies by using our shares of common stock as consideration.

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

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

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

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

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

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

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

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

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

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

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

● any major change in our Board, management, or key personnel;

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

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

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

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

● lawsuits threatened or filed against us;

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

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

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

***Sales of substantial amounts of our common stock in the public markets by our directors, officers and substantial shareholders, or the perception that such sales might occur, could reduce the price that our common stock might otherwise attain.***

Sales of substantial amounts of our common stock in the public market by our directors, officers and substantial shareholders following our listing, or the perception that such sales may occur, could adversely affect the public price of our common stock and may make it more difficult for you to sell your common stock at a time and price that you deem appropriate. As of April 30, 2026, we had 31,551,319 shares of common stock outstanding, all of which are "restricted securities" as that term is defined under Rule 144 of the Securities Act. Our directors, officers and greater than 10% shareholders have entered into contractual lock-up agreements with respect to an aggregate of 12,678,323 shares of common stock, plus 610,376 shares of common stock underlying options and warrants. Pursuant to the lock-up agreements, signatories irrevocably agree that, from the date thereof until 180 days following the date the common stock is first listed for trading on the Nasdaq Global Market in connection with the direct listing, the signatory will not offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of any common stock or securities convertible, exchangeable or exercisable into shares of common stock beneficially owned, held or acquired by the signatory. Substantially all of the remaining shares may be immediately sold either by the Registered Shareholders pursuant to this prospectus or by our other existing shareholders under Rule 144 since such common stock will have been beneficially owned by non-affiliates who beneficially owned such common stock for at least one year. Moreover, once we have been a reporting company subject to the reporting requirements of Section 13 or Section 15(d) of the Exchange Act for 90 days and assuming the availability of certain public information about us, (i) a non-affiliate who has beneficially owned common stock for at least six months may rely on Rule 144 to sell their common stock, and (ii) an affiliate who has beneficially owned common stock for at least six months, including certain of the common stock covered by this prospectus to the extent not sold hereunder, would be entitled to sell within any three-month period a number of shares of common stock that does not exceed the greater of either of the following: (a) 1% of the number of common stock then outstanding, and (b) the average weekly reported volume of trading of our common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.

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***Our issuance of additional capital stock in connection with financings, acquisitions, investments, our equity incentive plans or otherwise will dilute all other shareholders.***

We expect to issue additional capital stock in the future that will result in dilution to all other shareholders. We expect to grant equity awards to employees, directors and consultants under the QumulusAI, Inc. 2026 Equity Incentive Plan. We may also raise capital through equity or convertible debt financings in the future. As part of our business strategy, we may acquire or make investments in companies, products or technologies and issue equity securities to pay for any such acquisition or investment. Any such issuances of additional capital stock may cause shareholders to experience significant dilution of their ownership interests and the per share value of our common stock to decline.

***We do not intend to pay dividends for the foreseeable future and, as a result, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.***

We do not intend to pay any cash dividends in the foreseeable future. Any determination to pay dividends in the future will be at the discretion of the Board. Accordingly, you may need to rely on sales of our common stock after price appreciation, which may never occur, as the only way to realize any future gains on your investment.

***In making your investment decision, you should understand that we and our advisors have not authorized any other party to provide you with information concerning us or this offering, and you should not rely on information in public media that is published by third parties, and you should rely only on statements made in this prospectus in determining whether to purchase our common stock following our listing.***

You should carefully evaluate all of the information in this prospectus. We may receive media coverage, including coverage that is not directly attributable to statements made by our officers and employees, that incorrectly reports on statements made by our officers or employees, or that is misleading as a result of omitting information provided by us, our officers or employees. We cannot confirm the accuracy of such coverage. We and our advisors have not authorized any other party to provide you with information concerning us or this offering. As a result, you should carefully evaluate all of the information in this prospectus and rely only on the information contained in this prospectus in determining whether to purchase our common stock following our listing.

***If securities or industry analysts do not publish research or reports about our business, or if they downgrade their recommendations regarding our common stock, our stock price and trading volume could decline.***

The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. If any of the analysts who cover us downgrade our common stock or publish inaccurate or unfavorable research about our business, our common stock price may decline. If analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our common stock price or trading volume to decline and our common stock to be less liquid.

***We are an emerging growth company within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements.***

As a company with less than $1.235 billion in revenue for our last fiscal year, we qualify as an "emerging growth company" pursuant to the JOBS Act. Therefore, we may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act in the assessment of the emerging growth company's internal control over financial reporting and permission to delay adopting new or revised accounting standards until such time as those standards apply to private companies. As a result, if we elect not to comply with such reporting and other requirements, in particular the auditor attestation requirements, our investors may not have access to certain information they may deem important.

**General Risk Factors**

***Adverse global macroeconomic conditions, geopolitical risks, or reduced spending on AI and machine learning or on cloud infrastructure could adversely affect our business, operating results, financial condition, and future prospects.***

Our business depends on the overall demand for and adoption of AI and machine learning and cloud infrastructure and on the economic health of our current and prospective customers. In addition, the purchase of our platform is often discretionary and may involve a significant commitment of capital and other resources. Weak global and regional economic conditions, including United States and global macroeconomic issues, actual or perceived global banking and finance related issues, labor shortages, supply chain disruptions, rising interest rates and inflation, trade restrictions such as tariffs, spending environments, geopolitical instability, warfare and uncertainty, including the effects of the conflicts in the Middle East and Ukraine, and tensions between China and Taiwan, weak economic conditions in certain regions or a reduction in business spending, including spending on developing AI and machine learning capabilities and on cloud infrastructure, regardless of macroeconomic conditions, could adversely affect our business, operating results, financial condition, and future prospects, including resulting in longer sales cycles, a negative impact on our ability to attract and retain new customers, increase sales of our platform, or sell additional solutions and services to our existing customers, lower prices for our solutions and services, and slower or declining growth. Deterioration in economic conditions in any of the countries in which we do business could also cause slower or impaired collections on accounts receivable, which may adversely impact our business, operating results, financial condition, and future prospects.

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Geopolitical risks, including those arising from trade tension and/or the imposition of trade tariffs, terrorist activity, or acts of civil or international hostility, are increasing and may adversely affect our business, operating results, financial condition, and future prospects. The war in Iran may cause subsea cable and connectivity disruption, which could impact international clients and platforms as well as marketplaces that support international customers. Similarly, the potential for military conflict between China and Taiwan could have negative impacts on the global economy, including by affecting the supply of semiconductors from Taiwan, contributing to higher energy prices and creating uncertainty in the global capital markets. While we do not currently have employees or direct operations in Taiwan, our suppliers rely heavily on semiconductors supplied by Taiwan which are an important component of our platform and any reduction in that supply could materially disrupt our operations.

***We may be adversely affected by natural disasters, pandemics, and other catastrophic events, and by man-made problems such as war and regional geopolitical conflicts around the world, that could disrupt our business operations, and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster.***

Natural disasters or other catastrophic events may cause damage or disruption to our operations, international commerce, and the global economy, and thus could have an adverse effect on us. Our business operations are also subject to interruption by fire, power shortages, flooding, and other events beyond our control. In addition, our global operations expose us to risks associated with public health crises, such as pandemics and epidemics, which could harm our business and cause our operating results to suffer. Further, acts of war, armed conflict, terrorism and other geopolitical unrest, such as the conflicts in the Middle East and Ukraine and tensions between China and Taiwan, could cause disruptions in our business or the businesses of our partners or the economy as a whole.

In the event of a natural disaster, including a major earthquake, blizzard, or hurricane, or a catastrophic event such as a fire, power loss, cyberattack, or telecommunications failure, we may be unable to continue our operations and may endure system interruptions, reputational harm, delays in development of our platform, lengthy interruptions in service, breaches of data security, and loss of critical data, all of which could have an adverse effect on our future operating results. Climate change could result in an increase in the frequency or severity of such natural disasters. Moreover, any of our office locations or data centers may be vulnerable to the adverse effects of climate change. These events can, in turn, have impacts on inflation risk, food security, water security, and on our employees' health and well-being. Additionally, all the aforementioned risks will be further increased if we do not implement an effective disaster recovery plan or our partners' disaster recovery plans prove to be inadequate.

***Investors***' ***expectations of our performance relating to environmental, social, and governance factors may impose additional costs and expose us to new risks.***

There is an increasing focus from certain regulators, investors, employees, users, and other stakeholders concerning corporate responsibility, specifically related to environmental, social, and governance ("ESG") matters. Some investors may use these non-financial performance factors to guide their investment strategies and, in some cases, may choose not to invest in us if they believe our policies and actions relating to corporate responsibility are inadequate. Further, there is particular focus on concerns relating to AI and its impact on the environment, including the power-intensive nature of the industry, high consumption of water, and reliance on critical minerals and rare elements, and we are focused on sustainability goals and initiatives to mitigate the environmental impacts of our operations. We may experience heightened scrutiny from our stakeholders and potential investors around these issues. We may also face reputational damage in the event that we do not meet the ESG standards set by various constituencies or fail, or are perceived to fail, in our achievement of our sustainability goals, initiatives, or commitments. Additionally, different stakeholder groups have divergent views on ESG matters, which increases the risk that any action or lack thereof with respect to ESG matters may be perceived negatively by at least some stakeholders and adversely impact our reputation and business.

Our sustainability initiatives, goals, or commitments could be difficult to achieve or costly to implement. If our competitors' corporate social responsibility performance is perceived to be better than ours, potential, or current investors may elect to invest with our competitors instead. Our business may face increased scrutiny related to these activities and our related disclosures, including from the investment community, and our failure to achieve progress or manage the dynamic public sentiment and legal landscape in these areas on a timely basis, or at all, could adversely affect our reputation, business, and financial performance.

***We could be subject to securities class action litigation.***

In the past, securities class action litigation has often been instituted against companies following periods of volatility in the market price of a company's securities. This type of litigation, if instituted, could result in substantial costs and a diversion of management's attention and resources, which could adversely affect our business, operating results, or financial condition. Additionally, the dramatic increase in the cost of directors' and officers' liability insurance may cause us to opt for lower overall policy limits and coverage or to forgo insurance that we may otherwise rely on to cover significant defense costs, settlements, and damages awarded to plaintiffs, or incur substantially higher costs to maintain the same or similar coverage. These factors could make it more difficult for us to attract and retain qualified executive officers and members of our Board.

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**USE OF PROCEEDS**

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

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**DIVIDEND POLICY**

Since our inception, we have not paid any dividends on our common stock, and we currently expect that, for the foreseeable future, all earnings, if any, will be retained for use in the development and operation of our business. In the future, our Board may decide, at its discretion, whether dividends may be declared and paid to holders of our common stock.

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**CAPITALIZATION**

The following table sets forth our cash and cash equivalents and capitalization as of December 31, 2025.

This table should be read in conjunction with, and is qualified in its entirety by, reference to "*Summary Historical Financial and Other Data*," "*Management*'*s Discussion and Analysis of Financial Condition and Results of Operations*" and our financial statements and related notes appearing elsewhere in this prospectus.

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|:---|:---|
|  | **As of December**<br> **2025** |
|  | **Actual** |
| Cash and cash equivalents | $11712493 |
| **Shareholders**' **equity:** |  |
| Common stock - no par value; 500,000,000 shares authorized, 31,365,090 shares issued and outstanding as of December 31, 2025 | 93400180 |
| Additional paid-in capital | 6318290 |
| Accumulated deficit | (37546254) |
| **Total shareholders**' **equity attributable to QumulusAI stockholders** | 62172216 |
| **Total capitalization** | $62172216 |

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The number of shares of our common stock set forth in the table above excludes:

● 763,558 shares of common stock issuable upon the exercise of warrants as of December 31, 2025, with a weighted average exercise price of $4.20 per share;

● 1,182,034 shares of common stock issuable upon the exercise of stock options under the 2022 Plan as of December 31, 2025, with a weighted average exercise price of $1.93 per share; and

● 1,461,307 shares of common stock reserved for issuance under the 2022 Plan as of December 31, 2025.

All the shares of common stock subject to stock options outstanding under the 2022 Plan are expected to be registered on Form S-8 under the Securities Act, and such shares are eligible for sale in the public markets, subject to Rule 144 under the Securities Act limitations applicable to affiliates.

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**UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION**

**Summary of Transaction**

On April 1, 2025 (the "Effective Date"), the Company entered into Contribution and Exchange Agreements, as amended (together, the "Acquisition Agreement"), with shareholders of The Cloud Minders, Inc. ("TCM"), pursuant to which each TCM shareholder contributed all outstanding equity securities in TCM to the Company in exchange for equity securities of the Company. As a result, TCM became a wholly owned subsidiary of the Company, with 75% of the Company's capital stock held by Company shareholders and 25% of the Company's capital stock held by former TCM shareholders (the "Acquisition"). The Acquisition formally closed on the Effective Date.

**Pro Forma Information**

The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2025 combine the historical consolidated statements of operations of the Company and TCM, giving effect to the Acquisition as if it had occurred on January 1, 2025.

The following unaudited pro forma condensed combined financial information presents the combination of the financial information of the Company and TCM adjusted to give effect to the Acquisition. The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by Release No. 33-10786, "*Amendments to Financial Disclosures about Acquired and Disposed Businesses*."

The historical financial information of the Company was derived from the audited financial statements of the Company for the year ended December 31, 2025 included in this prospectus. The historical financial information of TCM was derived from the unaudited financial statements for the period ended March 31, 2025, included in this prospectus. This information should be read together with the Company's and TCM's financial statements and related notes and other financial information included elsewhere in this registration statement.

The Acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with Accounting Standards Codification ("ASC") Topic 805, "Business Combinations" ("ASC 805"). The pro forma information has been prepared using the acquisition method of accounting in accordance with accounting principles generally accepted in the United States of America. The acquisition method of accounting is dependent upon certain valuations that are based on the assumptions. The Company has finalized the acquisition accounting.

The unaudited pro forma condensed combined financial information does not give effect to the potential impact of current financial conditions, regulatory matters, operating efficiencies or other savings or expenses that may be associated with the integration of the two companies, if any. The unaudited pro forma condensed combined financial information is preliminary and has been prepared for informational purposes only and is not necessarily indicative of the financial position or results of operations in future periods or the results that actually would have been realized had the Company and TCM been a combined company during the specified period.

The pro forma information should be read in conjunction with the accompanying notes to the pro forma information. The pro forma information is not necessarily indicative of what the financial position or results of operations would have been had the Acquisition occurred as of the dates indicated nor does it project the future financial position or operating results of the combined company.

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UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2025

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|:---|:---|:---|:---|:---|
|  | **Qumulus** | **TCM** <br> **(through**<br> **March 31,** <br> **2025)** | **Pro Forma** <br> **Adjustments** | **Pro Forma** <br> **Condensed** <br> **Combined**  |
| Revenue | $11845870 | $1312479 | $— | $13158349 |
| Costs and expenses: |  |  |  |  |
| Cost of revenue | 6421207 | 282569 |  | 6703776 |
| General and administrative expenses | 10001385 | 1437631 |  | 11439016 |
| Depreciation and amortization expense | 5682455 | 509201 **B**  | 44241 | 6235897 |
| Total costs and expenses | 22105047 | 2229401 | 44241 | 24378689 |
| Operating loss | (10259177) | (916922) | (44241) | (11220340) |
| Other income (expenses) |  |  |  |  |
| Income from equity method investments | 1355374 | — **A**  | 562143 | 1917517 |
| Gain on remeasurement of investment in TCM | 14549536 |  |  | 14549536 |
| Change in fair value of warrant liability | (5536816) |  |  | (5536816) |
| Change in fair value of digital assets | 81919 |  |  | 81919 |
| Gain on disposal of property and equipment | 462 |  |  | 462 |
| Loss on settlement of lease liability | (1206067) |  |  | (1206067) |
| Loss on extinguishment of debt | (1037501) |  |  | (1037501) |
| Other income (expense), net | (54373) | (390387) |  | (444760) |
| Interest expense, net | (1929855) |  |  | (1929855) |
| Total other income (expenses), net | 6222679 | (390387) | 562143 | 6394435 |
| Income (loss) before income tax expense | (4036498) | (1307309) | 517902 | (4825905) |
| Income tax expense | 423381 |  |  | 423381 |
| Net income (loss) | (4459879) | (1307309) | 517902 | (5249286) |
| Net loss in non-controlling interests | (170498) |  |  | (170498) |
| Less deemed dividend on conversion of preferred stock | 89386947 |  |  | 89386947 |
| Net loss attributable to common stockholders | $(93676328) | $(1307309) | $517902 | $(94636233) |
| Net loss per share attributable to common stockholders, basis and diluted | $(4.63) |  |  | $(4.49) |

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**NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION**

**Note 1. Description of Transaction**

On April 1, 2025, the Company entered into the Acquisition Agreement with shareholders of TCM, pursuant to which each TCM shareholder contributed all outstanding equity securities in TCM to the Company in exchange for equity securities of the Company. As a result, TCM became a wholly owned subsidiary of the Company, with 75% of the Company's capital stock held by Company shareholders and 25% of the Company's capital stock held by former TCM shareholders. The Acquisition formally closed on the Effective Date. The Company expects TCM's operations to diversify the Company's revenue base beyond bitcoin mining and hosting. The addition of GPU-based infrastructure is anticipated to generate more stable, recurring revenue streams aligned with demand for high-performance computing resources across AI, machine learning, and data analytics sectors.

**Note 2. Basis of Presentation**

*Pro Forma Presentation*

The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2025 combine the historical consolidated statements of operations of the Company and TCM, giving effect to the Acquisition as if it had occurred on January 1, 2025.

The unaudited pro forma condensed combined financial information ("pro forma information") is based on, and should be read in conjunction with, the Company's historical audited consolidated financial statements for the year ended December 31, 2025. TCM's operating expenses have been disaggregated in the unaudited pro forma condensed combined statements of operations to be consistent with the presentation of the historical consolidated statements of operations of the combined company.

The historical consolidated financial information has been adjusted in the pro forma information to give effect to pro forma events that are directly attributable to the Acquisition, factually supportable, and with respect to the unaudited pro forma condensed combined statements of operations, expected to have a continuing impact on the results of operations of the combined company of more than one year.

The Acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with ASC 805. The pro forma information has been prepared using the acquisition method of accounting in accordance with accounting principles generally accepted in the United States of America. Under the acquisition method of accounting, the Acquisition is accounted for by recognizing the acquired assets, including separately identifiable intangible assets, and assumed liabilities at their acquisition-date fair values. Any excess of the purchase consideration over the acquisition-date fair values of these identifiable assets and liabilities is recognized as goodwill.

The unaudited pro forma condensed combined financial information does not give effect to the potential impact of current financial conditions, regulatory matters, operating efficiencies or other savings or expenses that may be associated with the integration of the two companies, if any. The unaudited pro forma condensed combined financial information is preliminary and has been prepared for informational purposes only and is not necessarily indicative of the financial position or results of operations in future periods or the results that actually would have been realized had the Company and TCM been a combined company during the specified period.

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*Accounting policies*

As part of preparing these unaudited pro forma condensed combined financial statements, certain reclassifications were made to align the Company and TCM's financial statement presentation. Upon consummation of the Transaction, management performed a comprehensive review of the two entities' accounting policies and concluded that the differences between the accounting policies of the two companies are not material. The accounting policies used in the presentation of the pro forma information are those disclosed in the Company's audited consolidated financial statements for the year ended December 31, 2025.

**Note 3. Estimated Fair Value of Assets Acquired and Liabilities Assumed**

The unaudited pro forma condensed combined financial information includes various assumptions, including those related to the preliminary purchase price allocation of the assets acquired and liabilities assumed from TCM based on management's best estimates of fair value. The final purchase price allocation may vary based on final valuations and analyses of the fair value of the acquired assets and assumed liabilities. Accordingly, the pro forma adjustments are preliminary.

The following table shows the preliminary allocation of the purchase price for TCM to the acquired identifiable assets, assumed liabilities and pro forma goodwill.

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| | |
|:---|:---|
| **Description** | **Fair Value** |
| Total purchase price | $39350572 |
| Estimated fair value of assets acquired: |  |
| Cash | $2449036 |
| Prepaid expenses | 96029 |
| Property and equipment | 7136180 |
| Customer relationships | 411700 |
| Trade name | 148080 |
| In-process research & development ("IPR&D") | 6777020 |
| Finance right-of-use assets, net | 5820225 |
| Total assets acquired | $22838270 |
| Estimated fair value of liabilities assumed: |  |
| Accounts payable | 172255 |
| Current portion of convertible note payable | 1716657 |
| Current portion of notes payable - related party | 104713 |
| Accrued expenses and other current liabilities | 555888 |
| Finance lease liabilities | 6078929 |
| Long-term notes payable, net of current portion | 6268321 |
| Total liabilities assumed | 14896763 |
| Goodwill | $31409066 |

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The pro forma condensed combined financial information does not include estimates of the impact of income taxes on net deferred tax assets or any related impacts to the Company's valuation allowance. The pro forma combined provision for income taxes does not necessarily reflect the amounts that would have resulted had the combined company filed consolidated income tax returns during the periods presented.

**Note 4. Adjustments to Unaudited Pro Forma Condensed Combined Financial Information**

The pro forma adjustments were based on the preliminary information available at the time of the preparation of the unaudited pro forma condensed combined financial information. The unaudited pro forma condensed combined financial information, including the notes thereto, are qualified in their entirety by reference to, and should be read in conjunction with, the separate historical audited and unaudited financial statements of QumulusAI and TCM, as filed with the SEC and included elsewhere in this prospectus.

The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X. The unaudited pro forma condensed combined financial information has been prepared to illustrate the effect of the Acquisition and has been prepared for informational purposes only. The Company includes transaction accounting adjustments in the unaudited pro forma condensed combined statements of operations as if they had occurred as of the earliest period presented, January 1, 2025.

***Adjustments to Unaudited Pro Forma Condensed Combined Statements of Operations***

The pro forma adjustments included in the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2025 are as follows:

**A** Adjustments to remove the Company's share of TCM's net loss of $562,143 included in the Company's statement of operations during the year ended December 31, 2025.

**B** Adjustments for the amortization of intangible assets of $44,241.

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**Note 5. Net Loss per Share**

The components of basic and diluted earnings per share were as follows:

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| | |
|:---|:---|
|  | <br> **For The Year Ended** <br> **December 31, 2025 (1)** |
| *Numerator:* | |
| Pro forma net loss attributable to common stockholders | $(94636233) |
| *Denominator:* | |
| Weighted average shares outstanding - basic and diluted | 21098183 |
| *Net loss per share:* | |
| Pro forma net loss per share - basic and diluted | $(4.49) |

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*(1) Pro forma net loss attributable to common stockholders includes the related pro forma adjustments as referred to within the section* "*Unaudited Pro Forma Condensed Combined Financial Information.*"<br>

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

**Forward-Looking Statements**

*The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the notes to those statements that are included elsewhere in this prospectus. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors. We use words such as anticipate, estimate, plan, project, continuing, ongoing, expect, believe, intend, may, will, should, could, and similar expressions to identify forward-looking statements. See* "*Cautionary Note Regarding Forward-Looking Statements.*"

**Overview**

QumulusAI is a cloud infrastructure company specializing in rapid deployment of graphics processing unit ("GPU")-powered solutions for artificial intelligence ("AI") applications, serving a critical market that is often overlooked by large-scale cloud providers ("hyperscalers"), which operate massive, standardized computing infrastructures primarily serving the largest enterprises. Our platform delivers flexible, competitively priced, and customizable solutions for underserved small and mid-market customers—including machine learning teams, AI infrastructure startups, and research institutions—while also supporting the scale and complexity requirements of large enterprises, such as long-term deployments or supplemental on-demand compute capacity.

Originally established as a crypto-focused data center and power infrastructure company, we have evolved into a full-stack platform purpose-built for high-throughput, enterprise-grade compute. Leveraging our operational heritage in constructing and managing over 100 megawatts ("MW") of high-density data center capacity, we are repurposing infrastructure previously used for cryptocurrency mining to meet accelerating AI demand while continuing to operate managed services for crypto mining infrastructure as a complementary, revenue-generating load management capability.

QumulusAI is headquartered in Marietta, Georgia. Here, we operate more than 1,120 GPUs across three colocation data centers in Marietta, Georgia, Kansas City, Missouri, and Philadelphia, Pennsylvania. We have secured rights of first refusal for 30 MW of information technology ("IT") load capacity space for our GPU equipment and we are actively planning for expansion exceeding 120 MW of total IT load across our platform with potential to support over 90,000 NVIDIA B200/B300 GPUs (among the latest generation GPUs purpose-built for foundation model training), or as many as 1,500,000 GPUs optimized for AI inference at scale.

Additionally, in the aggregate, we operate approximately 12 MW of grid power with immediate access to more than 40 MW of additional grid power in Watonga, Oklahoma and Denton, Texas where we manage blockchain assets. These sites serve as foundational assets for power-intensive compute deployments and provide strategic flexibility for future infrastructure repurposing.

QumulusAI's competitive edge lies in its end-to-end control of the infrastructure stack, encompassing:

● High-Performance Computing ("HPC") Cloud Services

● Data Center Infrastructure and Hosting

● Power and Energy Integration

This vertically integrated model enables greater reliability, tighter cost control, and superior performance—advantages not easily matched by traditional providers that rely on fragmented supply chains.

The Company serves a broad range of customers, including enterprise machine learning teams, AI infrastructure startups, and research institutions. Use cases span training of foundation models, deployment of inference application programming interfaces ("APIs"), and long-horizon experimentation requiring predictable performance at scale.

QumulusAI reaches customers through a dual-channel approach. Marketplace provider partners (RunPod Inc. ("RunPod"), for example) manage orchestration and customer acquisition in exchange for a share of the total transaction value. When we sell through RunPod, we recognize 80% of the total transaction value as revenue and RunPod retains 20% under their standard service terms. Additionally, QumulusAI's direct sales team engages enterprise clients through a self-service portal and technical onboarding support. This hybrid model optimizes utilization and enables both rapid scale and deep customer relationships.

**Full-Stack AI Infrastructure**

QumulusAI operates a fully integrated infrastructure platform designed to deliver efficient, scalable compute services with long-term cost predictability. Its three-layer model includes:

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***HPC Cloud Services***

Unlike traditional providers that rent cloud capacity or depend on hyperscale backends, QumulusAI retains complete control over its compute stack. This allows for faster provisioning, more consistent performance, and enterprise-grade security. Marketplace partnerships drive high-volume usage, while the direct channel caters to technically advanced clients seeking custom infrastructure solutions.

***Data Center Infrastructure & Hosting***

QumulusAI's infrastructure spans both long-term leased facilities and strategic co-location agreements. Our co-location agreements are with providers such as CoreSite, H5, and NOCIX. This hybrid deployment strategy supports geographic flexibility, rapid scale-up, and localized latency control.

In addition to powering its own HPC platform, QumulusAI generates recurring revenue by offering crypto-focused hosting services through its strategic holdover blockchain business. This diversified workload mix strengthens the Company's revenue base and provides insulation from sector-specific volatility.

***Power & Energy Integration***

Energy strategy is central to QumulusAI's model. Rather than relying on third-party utilities, the company integrates power procurement directly into its operations through power purchase agreements and dedicated infrastructure projects.

This approach enhances margin stability, ensures energy availability for high-density workloads, and supports uptime across its sites. As ESG concerns and sustainability metrics grow in importance, QumulusAI's energy-layer control positions it to meet the evolving standards of enterprise clients.

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**History and Timeline**

Our businesses began in 2019 under WAHA Technologies, Inc. and WAHA, Inc. (renamed SPRE Commercial Group, Inc.) with the activation of 1 MW of data center hosting in Georgia. In 2020, our business expanded to 10 MW of data center infrastructure and hosting and secured our first round of venture funding. In 2021, we acquired our HPC business and expanded to 40 MW of data center infrastructure and hosting. In 2022, we raised $50 million in debt and equity funding, expanded to 86 MW, sold a facility to CleanSpark Inc. (Nasdaq: CLSK), and launched HPC solutions for AI, machine learning, blockchain, and other applications. In 2022, we completed a corporate roll-up to consolidate all shareholders under a single cap table, forming Global Digital Holdings, Inc. (which was renamed QumulusAI, Inc. on August 18, 2025).

Since its founding in December 2022, QumulusAI has undergone a purposeful transformation—from a regional hosting and power operator into a vertically integrated AI infrastructure platform. In 2023, we developed 30 MW of new data centers in North Carolina and Oklahoma, invested over $10 million into HPC-as-a-service, and listed with Runpod, the leading GPU-as-a-service marketplace. In 2024, we activated over 200 HPC GPUs, added sales channel partners, expanded to 60 MW of infrastructure, and sold a 12 MW data center. In 2025, we have been working to develop a 20 MW data center in Texas, have ordered approximately 1,100 GPUs in a phased activation. Each milestone marks a strategic step in that journey: from scaling data center capacity and beginning GPU deployment, to launching AI services via both marketplace and enterprise channels. We most recently sold our T20 facility in Tulsa, Oklahoma, representing approximately 50 MW.

As of 2026, the Company operates across multiple U.S. regions with over 12 MW of active capacity and a growing fleet of GPUs. With new infrastructure builds and energy integration projects underway, QumulusAI is focused and well positioned to deliver scalable, cost-efficient compute to meet the accelerating demands of AI workloads through 2026 and beyond.

**Recent Developments**

 ***Master Lease Agreement***

On April 10, 2026, the Company entered into a Master Lease Agreement with a third party to lease servers and related equipment. The individual equipment leases commence on the delivery of the equipment and have terms of three years with an option to purchase the equipment at the end of the lease term. Total fixed payments for the leases that have been entered into as of May 1, 2026 are approximately $26 million, payable over the lease term of three years.

***$45 Million Senior Secured Convertible Notes Facility***

On March 26, 2026 (the "Initial Closing Date"), we entered into a securities purchase agreement (the "Securities Purchase Agreement") with ATW AI Opportunities LLC (the "Investor"), pursuant to which we agreed to issue and sell to the Investor senior secured convertible notes (the "ATW Notes") in an aggregate principal amount of up to $45,000,000 (the "Facility"). The ATW Notes are being issued in multiple tranches as described below. The Facility consists of an initial tranche in the principal amount of $15,000,000 (the "Initial Tranche", and such ATW Note sold to the Investor, the "Initial ATW Note"), which was funded on the closing date, and subsequent tranches in an aggregate principal amount of up to $30,000,000 (collectively, the "Subsequent Tranches" or "Green Shoe"), which are callable by us subject to certain funding conditions. Subsequent Tranches may also be funded at such other times as may be agreed by the parties in accordance with the transaction documents.

We intend to use the net proceeds from the sale of the ATW Notes for working capital and general corporate purposes. The ATW Notes bear interest at a rate of 7% per annum, with interest accruing prior to the public listing date of our common stock (the "Public Listing Date") capitalized into the outstanding principal balance and, thereafter, payable in accordance with the terms of the ATW Notes, including in cash on a quarterly basis or upon conversion. The ATW Notes were issued with an original issue discount of 4%, payable from the funding proceeds. The Initial ATW Note will mature on March 26, 2028; provided that, upon the Public Listing Date, so long as no event of default then exists, the maturity date shall automatically extend to the second anniversary of the Public Listing Date. If the Public Listing Date has not occurred by the public listing deadline agreed to by the parties, the Investor may redeem any outstanding ATW Notes, or we may elect to repay in full all outstanding ATW Notes.

The ATW Notes are convertible into shares of our common stock at the election of the Investor at an initial fixed conversion price of $11.50 per share (the "Fixed Conversion Price"), subject to adjustment. The Fixed Conversion Price is subject to a price match if we issue equity at a lower price in the future. Notwithstanding the foregoing, with respect to the Green Shoe portion of the Facility, the Fixed Conversion Price shall be $17.00 per share. Beginning on the Public Listing Date, we will make equal monthly redemptions of the balance of the initial principal amount together with accrued interest in shares, subject to equity conditions, or in cash at our option at no premium. If monthly redemptions are made in shares, the conversion price shall be the lower of (i) the Fixed Conversion Price and (ii) 93% of the lowest daily volume-weighted average price ("VWAP") during the eight trading days prior to each conversion. The Investor has the right to accelerate up to four payments, in whole or in part, in shares at any time per month. Any accelerated redemption payments or conversions shall apply to the furthest monthly redemption.

The Investor has agreed to limit the sale of shares received from such monthly redemptions to the higher of (i) 15% of the daily trading volume or (ii) $350,000 per trading day. The timing and amount of each conversion shall be determined by the Investor. If we elect to pay for a monthly redemption in shares and/or the Investor accelerates any payments, the Investor may convert the payment at any time following a monthly redemption date, on one or more conversion notices, in an amount or amounts selected by the Investor.

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The ATW Notes contain a beneficial ownership limitation that prohibits the Investor from converting the ATW Notes to the extent that such conversion would result in the Investor beneficially owning more than 4.99% of our outstanding common stock.

The ATW Notes are secured by a senior security interest in the collateral granted by us under the security documents, including a first-priority perfected lien on our personal property and a pledge of the ownership interests of our three direct wholly owned subsidiaries, but not a direct lien on the assets of those subsidiaries except as provided in the transaction documents.

Upon the closing of the Initial Tranche, we deposited $10,250,000 into a fully FDIC-insured cash sweep segregated account established at CommerceOne Bank, our current banking institution, held for the benefit of the Investor pursuant to a blocked deposit account control agreement (the "Controlled Account"). Upon the Public Listing Date, the Controlled Account shall be cancelled and the cash shall be released to an account designated by us.

The Securities Purchase Agreement and the ATW Notes contain customary representations and warranties, affirmative covenants, negative covenants (including restrictions on additional senior or secured indebtedness and variable rate transactions), financial covenants (including minimum liquidity requirements), closing conditions, equity conditions, events of default, and default terms. Notwithstanding any restrictions in the Securities Purchase Agreement or the ATW Notes, we and/or our subsidiaries or special purpose vehicles ("SPVs") are permitted to consummate up to $75,000,000 of financing prior to the Public Listing Date at the subsidiary or SPV level, including structures that may otherwise require an upstream payment guaranty from us, provided that a minimum 25% equity cushion is established within 30 days following the shipment of applicable equipment. Such 25% equity cushion may be satisfied through one or more of the following: (i) equity capital contributed by us, (ii) customer deposits retained within the SPV account, and/or (iii) equity capital raised directly by the subsidiary or SPV.

For 24 months following the closing, the Investor has the right to co-invest for at least 15% of any of our future financing transactions on the same terms as other investors. Pursuant to the Securities Purchase Agreement, we have agreed to indemnify and hold the Investor harmless from and against any and all claims, liabilities, costs, and expenses (including reasonable attorneys' fees) of any kind relating to or arising from a claim by any person that such person acted on our behalf in connection with the transactions contemplated by the Securities Purchase Agreement. We have agreed to reimburse the Investor for all of its documented out-of-pocket legal and diligence fees and expenses incurred in connection with the Facility up to $150,000.

In addition, we have agreed to pay an administrative expense reimbursement of $50,000 on the Initial Closing Date and on each additional closing date to StructureCo Opportunities LLC for expenses related to the commitment of internal resources to administer this transaction. Such reimbursement is due at each closing and is payable only from the disbursement of funds in connection with the funding of a tranche.

***Entry into License and Service Agreement***

On January 14, 2026, the Company entered into a License and Service Agreement with Connected Nation Internet Exchange Points, LLC ("Connected Nation") pursuant to which Connected Nation granted to the Company a license to access and use certain facilities and pursuant to which Connected Nation will provide certain services to the Company for the term of the agreement. Through this agreement, Moonshot Energy, a manufacturer of critical and modular infrastructure for AI, and QAI Moon (as defined below) will design and deploy a nationally distributed, fully integrated platform with IXP.us that pairs carrier-neutral Internet Exchange Points with modular AI pods at approximately 25 initial sites and expanding over time to as many as 125 locations. By situating compute at Internet Exchange Points where networks already meet and exchange traffic, this model reduces the number of routing steps required for data to travel between users and processing resources, creating a more direct and efficient path. The result is significantly lower latency and more predictable performance, which allows compute to be delivered as a proximity-based service rather than simply as capacity.

***Sale of Joint Venture Interest***

On January 12, 2026, SPRE TULSA OK, LLC, an indirect wholly owned subsidiary of the Company and party to the T20 joint venture, entered into a Limited Liability Company Interest Purchase Agreement, as amended on February 12, 2026, to sell its 40% interest in the T20 joint venture to a third party. This transaction closed on February 13, 2026, providing a $16.5 million cash injection to our balance sheet. The Company intends to use this capital to accelerate the development and scale of its HPC business.

***Formation of Joint Venture***

TCM and Me Luna Qumulus LLC ("Moonshot") entered into a joint venture entity named QAI Moon, LLC ("QAI Moon"), effective October 1, 2025, wherein (i) TCM is a member holding a 51% interest, and (ii) Moonshot is a member holding a 49% interest.

QAI Moon, TCM and DAC Consulting LLC ("DAC") entered into a joint venture entity named SPRE NKC MO, LLC, effective October 1, 2025, wherein (i) QAI Moon is a member holding a 30% interest, (ii) TCM is a member holding a 35% interest, and (iii) DAC is a member holding a 35% interest. QAI Moon is the manager of the joint venture and owns all of the voting shares. TCM contributed $3,000,000 to SPRE NKC MO, LLC on October 1, 2025. QAI Moon additionally wholly owns SPRE Brooklyn NY, LLC.

The Company consolidates QAI Moon, SPRE NKC MO, LLC, and SPRE Brooklyn NY, LLC; however, they are not wholly owned subsidiaries.

***Reverse Stock Split***

Our Board of Directors and our shareholders each approved the conversion of all outstanding series of preferred stock into common stock (the "Conversion") and a 1-for-3 reverse stock split of our common stock issued and outstanding thereafter (the "Reverse Stock Split"). On September 30, 2025, we filed amended and restated articles of incorporation with the State of Georgia to immediately effect the Reverse Stock Split. All share and per share information in this "*Management*'*s Discussion and Analysis of Financial Statements and Results of Operations*" is presented on a post-Conversion and post-Reverse Stock Split basis.

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***Credit Facility***

On September 19, 2025, we entered into a credit facility with a third party on behalf of the USD.AI Protocol ("USD.AI"), an on-chain, decentralized finance protocol that treats GPUs as a financeable commodity. Pursuant to this arrangement, USD.AI will provide a $500 million guidance facility to the Company to support the scalable deployment of GPU infrastructure. The facility is structured as a programmatic series of 70% loan-to-cost, non-recourse financings, with each individual GPU deployment subject to the third party's underwriting and approval process. Accordingly, the Company will be able to borrow stablecoins against up to 70% of its approved GPU deployments. The Company is under no obligation to draw financing, and USD.AI has no obligation to provide financing other than through its standard per deployment underwriting process. Each GPU deployment at an approved data center will be treated as a separate financing under the facility. After each deployment, the Company will issue a warehouse receipt for the GPUs and ancillary networking equipment, in exchange for which the third party will issue GPU Warehouse Receipt Tokens, which will subsequently be posted as collateral for borrowing stablecoin-based credit on the USD.AI protocol. Upon completion of this process, funding is distributed to the Company immediately. On February 13, 2026, the Company completed its first $4.3 million deployment under this facility. On April 17, 2026, the Company completed an additional $16.4 million deployment under this facility.

***Acquisition of The Cloud Minders, Inc. (***"***TCM***"***)***

On April 1, 2025, the Company entered into Contribution and Exchange Agreements, as amended, with shareholders of TCM, pursuant to which each TCM shareholder contributed all outstanding equity securities in TCM to the Company in exchange for equity securities of the Company. As a result, TCM became a wholly owned subsidiary of the Company, with 75% of the Company's capital stock held by Company shareholders and 25% of the Company's capital stock held by former TCM shareholders. The total acquisition consideration was $39,350,572, which was comprised of 2,574,718 shares of the Company's common stock and 1,432,182 shares of the Company's Series D Preferred Stock (with a total fair value of $20,250,013), options to purchase 668,392 shares of the Company's common stock to replace TCM options (with a total fair value of $1,883,995), and the fair value of the Company's prior investment in TCM (with a total fair value of $17,216,604). Management expects TCM's operations to diversify the Company's revenue base beyond bitcoin mining and hosting. The addition of GPU-based infrastructure is anticipated to generate more stable, recurring revenue streams aligned with demand for high-performance computing resources across AI, machine learning, and data analytics sectors. Please refer to the section entitled "*Unaudited Pro Forma Condensed Combined Financial Information*" for more information.

***Expansion of GPU-Based Infrastructure***

In connection with the expansion of its GPU-based infrastructure, the Company entered into a license agreement with hosted.ai to provide software that manages and coordinates how GPU resources are allocated, scheduled, scaled, and accessed across multiple users, applications, or workloads in cloud and multi-tenant environments.

**Financial Operations Overview**

The following discussion sets forth certain components of the Company's statements of operations as well as factors that impact those items.

***Revenues***

Revenues are derived from bitcoin mining, mining hosting services, and compute power. The Company participates in a third-party operated mining pool. As a participant in the third-party operated mining pool, the Company earns revenue by providing computing power to the mining pool. The Company's enforceable right to compensation begins when, and lasts as long as, the Company provides computing power to the mining pool operator.

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In addition to mining for its own account, the Company also hosts mining equipment owned by third parties across its operational sites. This hosting model allows the Company to generate more stable, recurring income by leveraging its existing infrastructure. The Company also generates revenue from providing compute power to a marketplace, but in some instances provides power directly to end users. The compute power is maintained by the Company and made available to customers for large-scale cloud processing.

During 2024 and through December 31, 2025, the Company strategically shifted its revenue mix by expanding its hosting services. As a result, self-mining declined from 52% of total revenue for the year ended December 31, 2024 to approximately 7% for the year ended December 31, 2025, with the remainder coming from hosting and compute power activities.

The Company evaluates the performance of its bitcoin mining operations through a combination of operational and market-based metrics that directly influence revenue. These include the number of bitcoin earned per day, the efficiency and uptime of deployed miners as measured by terahash performance, the total number of active miners, bitcoin network difficulty, and the market price of bitcoin. Together, these metrics determine the Company's mining yield, operating efficiency, and overall revenue potential during a given period.

*Key Definitions*

Bitcoin Mining: The process by which new bitcoin are created and transactions are validated on the Bitcoin Network. Miners compete to solve complex cryptographic problems, and the first to solve each block earns a reward in bitcoin (the "block reward") plus transaction fees. The probability of earning rewards depends on a miner's computational power, or hashrate, relative to the total network hashrate.

Hashrate (TH/s): A measure of computational speed, representing the number of trillions of cryptographic calculations ("hashes") performed per second. Higher hashrate increases the likelihood of earning bitcoin rewards.

Network Difficulty: A measure of how hard it is to find a valid block. Difficulty automatically adjusts roughly every two weeks to keep global block times near ten minutes. When difficulty rises, more hashrate is required to maintain the same level of bitcoin output.

Block Reward and Halving: The block reward is the amount of bitcoin awarded for successfully mining a block. Approximately every four years, this reward is cut in half in an event known as the halving, reducing the rate of new bitcoin entering circulation and directly impacting miner economics.

***Cost of Revenues***

Cost of revenues reflect direct costs associated with the delivery of the Company's products and services to its customers. These costs primarily include electricity and infrastructure expenses associated with operating the Company's mining facilities. Additionally, as a result of the acquisition of TCM, which occurred during the year ended December 31, 2025, cost of revenues also includes colocation and hosting costs related to GPU-based high-performance computing data centers, as well as lease payments for TCM's GPU assets.

***General and administrative expenses***

General and administrative expenses include salaries, benefits and other costs of departments serving administrative functions, such as executives, finance and accounting, and human resources. In addition, general and administrative expense includes non-personnel costs, such as professional fees, legal fees, accounting and finance advisory fees and other supporting corporate expenses not allocated to cost of revenues, product and development or sales and marketing.

***Depreciation and amortization expense***

Depreciation and amortization relates to long-lived assets and intangible assets used in the Company's business. Depreciation expense relates primarily to buildings and improvements, miners, and mining related equipment. Amortization expense relates primarily to right-of-use assets, customer relationships and trade names.

***Other income (expense), net***

Other income (expense), net consists of non-operating income and expenses not directly related to our core operations. This includes income (expense) from non-consolidating joint ventures, warrant liabilities, digital assets held at fair value, interest earned and paid, loss on extinguishment of debt, and gain on remeasurement on investment in TCM during the year ended December 31, 2025. It also includes amortization of certain non-revenue-generating assets.

***Joint Ventures***

Joint ventures include infrastructure projects in which QumulusAI participates in the operational and financial results. These arrangements typically involve large-scale hosting or mining facilities that are jointly developed and operated with strategic partners. For joint ventures in which we hold non-controlling ownership, we account for these investments using the equity method of accounting and recognize our proportionate share of net income or loss within the consolidated financial statements. For joint ventures in which we hold a controlling ownership, we consolidate the entities for financial reporting purposes. Joint ventures allow QumulusAI to expand its infrastructure footprint while maintaining capital efficiency and operational flexibility.

***Change in Fair Value of Warrant Liability***

Change in fair value of warrant liability represents periodic unrealized gains or losses resulting from the remeasurement of outstanding warrant instruments classified as liabilities. These changes reflect fluctuations in the estimated fair value of warrants due to factors such as the Company's equity valuation, time to maturity, and volatility assumptions. Adjustments are recorded in the consolidated statements of operations and do not impact cash flow.

***Conversion of note payable***

Conversion of note payable reflects the settlement of outstanding debt through the issuance of equity. When the fair value of the equity issued is less than the carrying amount of the debt, the Company records a non-cash loss on extinguishment of debt in the consolidated statements of operations.

------

***Change in Fair Value of Digital Assets***

Change in fair value of digital assets represents periodic adjustments to the carrying value of bitcoin and other digital assets held by the Company, based on changes in market price relative to the value recorded at the time of acquisition or mining. These unrealized gains or losses are recognized to reflect the fair value of digital assets as of the reporting date. This adjustment impacts reported earnings but does not result in realized gains or losses unless the assets are sold.

***Loss on Disposals, Loans, and Other Investments***

Loss on disposals, loans, and other investments includes realized losses related to the sale, abandonment, or write-off of equipment or other long-lived assets, as well as losses associated with uncollectible loans and impairments of non-core investments. These items are recognized when it becomes evident that the carrying value of an asset or receivable is not recoverable and are reported outside of operating income due to their non-recurring and non-operational nature.

***Gain on Sale of Equity Method Investments***

Gain on sale of investments includes realized gains related to the sale of equity method investments. When the carrying value of the Company's investment is less than the consideration received for the sale, the Company records a non-cash gain on sale of equity method investments in the consolidated statements of operations.

***Loss on Extinguishment of Debt***

Loss on extinguishment of debt reflects the partial settlement of outstanding debt through the issuance of equity. When the fair value of the equity issued is more than the carrying amount of the debt, the Company records a non-cash loss in the consolidated statements of operations.

***Gain on Remeasurement of Investment in TCM***

Gain on remeasurement of investment in TCM represents the difference in the carrying value of TCM immediately prior to the date the Company acquired the remaining interest in TCM, and TCM's fair value as of that date, which is April 1, 2025.

***Interest Expense, Net***

Interest expense, net includes interest incurred on finance leases, loans, and other debt arrangements, as well as the amortization of original issue discounts, debt issuance costs, and undrawn commitment fees. This amount is presented net of capitalized interest associated with qualifying assets under construction.

------

**Results of Operations for the Fiscal Years Ended December 31, 2025, and 2024**

The following table summarizes the results of operations for the periods indicated:

**Results of Operations for the Years Ended December 31, 2025, and 2024**

The following table summarizes the results of operations for the periods indicated:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2025** | **2024** | **$ Change** | **% Change** |
| Revenue | $11845870 | $8095672 | $3750198 | 46% |
| Cost of revenue | 6421207 | 5371049 | 1050158 | 20% |
| General and administrative expenses | 10001385 | 3346547 | 6654838 | 199% |
| Depreciation and amortization expense | 5682455 | 7164034 | (1481579) | (21)% |
| Total costs and expenses | 22105047 | 15881630 | 6223417 | 39% |
| Operating Loss | (10259177) | (7785958) | (2473219) | 32% |
| Income (loss) from equity method investments | 1355374 | (274270) | 1629644 | (594)% |
| Gain on sale of equity method investments |  | 835046 | (835046) | (100)% |
| Gain on sale of investment in joint venture |  | 155286 | (155286) | (100)% |
| Gain on remeasurement of investment in TCM | 14549536 |  | 14549536 | —% |
| Change in fair value of warrant liability | (5536816) | (2566552) | (2970264) | 116% |
| Change in fair value of digital assets | 81919 | 188682 | (106763) | (57)% |
| Gain (loss) on disposal of property and equipment | 462 | (2525408) | 2525870 | (100)% |
| Loss on settlement of lease liability | (1206067) |  | (1206067) | —% |
| Loss on extinguishment of debt | (1037501) | (83757) | (953744) | 1139% |
| Interest expense, net | (1929855) | (1119496) | (810359) | 72% |
| Other income (expense), net | (54373) | (7947) | (46426) | 584% |
| Total other income (expenses), net | 6222679 | (5398416) | 11621095 | (215)% |
| Loss before income tax expense | (4036498) | (13184374) | 9147876 | 69% |
| Income tax expense | 423381 |  | 423381 | —% |
| Net loss | $(4459879) | $(13184374) | $8724495 | 66% |

---

**Comparison of Years Ended December 31, 2025 and 2024**

***Revenue***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2025** | **2024** | **$ Change** | **% Change** |
| Revenue from cryptocurrency mining | $816195 | $4184239 | $(3368044) | (80)% |
| Revenue from mining hosting services | 6090970 | 3911433 | 2179537 | 56% |
| Revenue from compute power | 4938705 |  | 4938705 | —% |
|  | $11845870 | $8095672 | $3750198 | 46% |

---

------

Revenue for the year ended December 31, 2025 was $11,845,870, representing an increase of $3,750,198, or approximately 46%, as compared to $8,095,672 for the year ended December 31, 2024. The increase was primarily driven by the acquisition of TCM and the revenue from compute power which contributed $4,938,705 from April 1, 2025 to December 31, 2025, or approximately 41.7% of gross revenue. Mining hosting services in 2025 represented 51.4% of gross revenue, an increase of 3.1% compared to 2024, attributed to the Company's shift in 2024 from self-mining to hosting services. By the end of 2025, the Company had three hosting clients under contract representing 24 MWs combined. Self-mining contributed $816,195 for the year ended December 31, 2025 as compared to $4,184,239 for the year ended December 31, 2024, further illustrating the shift to hosting services.

During the year ended December 31, 2025, the Company's bitcoin mining operations were influenced by changes in network difficulty, fleet utilization, and overall market pricing compared to the year ended December 31, 2024. Average bitcoin per day declined from 0.20 bitcoin to 0.02 bitcoin, average terahash decreased from 91.65 TH/s to 71.36 TH/s, active miners decreased from 1,941 to 475, and revenue decreased from $4,184,239 to $816,195, while average bitcoin price increased from $65,776 to $101,724 and network difficulty rose from 87 trillion to 128 trillion during the year ended December 31, 2025 compared to the year ended December 31, 2024.

Management attributes the decrease in bitcoin mined primarily to higher network difficulty, which reduced yield per unit of hashrate, and continues to emphasize fleet efficiency, power optimization, and uptime performance. Additionally, the April 2024 bitcoin halving, which reduced the block reward from 6.25 BTC to 3.125 BTC per block, further constrained industry-wide mining output and contributed to reduced production volumes

***Cost of Revenue***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2025** | **2024** | **$ Change** | **% Change** |
| Cost of revenue |  |  |  |  |
| Hosting expenses | $690542 | $3063949 | $(2373407) | (77)% |
| Electricity | 3865573 | 2026022 | 1839551 | 91% |
| Contract labor | 1865092 | 125484 | 1739608 | 1386% |
| Shipping and postage |  | 155594 | (155594) | (100)% |
| Total cost of revenue | $6421207 | $5371049 | $1050158 | 20% |

---

Cost of revenue for the year ended December 31, 2025 was $6,421,207, representing an increase of $1,050,158, or 20%, as compared to $5,371,049 for the year ended December 31, 2024. Prior to the Company's acquisition of power sources such as T20, FCNC Venture, LLC ("FCNC"), and SPRE Watonga, OK, LLC, the Company operated as a hosted client under third-party providers to activate its mining fleet. These hosted arrangements carried significantly higher power cost margins, resulting in elevated cost of revenues. In 2024, the Company transitioned to utilizing its owned infrastructure, significantly reducing reliance on third-party providers, and improving cost efficiency. April 2024 was the last month that the Company utilized third-party providers to host miners. April 2024 was also the start of the shift to reduce self-mining and increase hosted services. Totals for the year ended December 31, 2025 represents the full nine months of electricity costs at the Watonga site, whereas it was only partially operational for two months in the first half of 2024 (May and June 2024). For the year ended December 31, 2025, the increase in contract labor costs was driven by the inclusion of nine months of TCM's costs of revenues.

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***General and Administrative Expenses***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2025** | **2024** | **$ Change** | **% Change** |
| Stock-based compensation | $922740 | $313640 | $609100 | 194% |
| Wages and salaries | 3280030 | 627657 | 2652373 | 423% |
| Taxes and other expenses | 164159 | 90408 | 73751 | 82% |
| Utilities | 47997 | 13446 | 34551 | 257% |
| Rent and lease expense | 289219 | 261341 | 27878 | 11% |
| Professional fees | 3671060 | 1202456 | 2468604 | 205% |
| Insurance | 481298 | 320388 | 160910 | 50% |
| Travel, meals, and entertainment | 217311 | 33442 | 183869 | 550% |
| Supplies and software | 272128 | 149686 | 122442 | 82% |
| Other general and administrative expenses | 655443 | 334083 | 321360 | 96% |
| Total general and administrative expenses | $10001385 | $3346547 | $6654838 | 199% |

---

General and administrative expenses for the year ended December 31, 2025 were $10,001,385, an increase of $6,654,838, or 199%, as compared to $3,346,547 for the year ended December 31, 2024. The increase was primarily due to the acquisition of TCM, consulting costs associated with public readiness, and growth in anticipation of rapid scaling in HPC and compute services. Professional fees increased $2,468,604 which represents audit, legal, and consulting costs related to public readiness. Wages and salaries increased $2,652,373 in 2025 compared to 2024 of which $283,000 was due to the TCM acquisition and the remaining $2,369,373 reflects increases in personnel.

***Depreciation and Amortization Expense***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2025** | **2024** | **$ Change** | **% Change** |
| Depreciation and amortization expense | $5682455 | $7164034 | $(1481579) | (21)% |

---

Depreciation and amortization expense for the year ended December 31, 2025 was $5,682,455, a decrease of $1,481,579, or 21%, as compared to $7,164,034 for the year ended December 31, 2024. The decrease was primarily due to the contribution of miners to the T20 expansion and the subsequent reduction in depreciation expense associated with the transfer of fixed assets to T20, offset by the amortization of intangible assets including right-of-use leased assets acquired in the TCM acquisition.

***Joint Ventures***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2025** | **2024** | **$ Change** | **% Change** |
| Income (loss) from equity method investments | $1355374 | $(274270) | $1629644 | (594)% |
| Gain on sale of equity method investments |  | 835046 | (835046) | (100)% |
| Gain on sale of investment in joint venture | $— | 155286 | (155286) | (100)% |
| Total other income: JV Investments | $1355374 | $716062 | $639312 | 89% |

---

Joint venture other income consists of the Company's non-controlling equity interests in TCM (prior to April 1, 2025), T20, and FCNC. Joint venture other income for the year ended December 31, 2025 was $1,355,374, an increase of $639,312, or 89%, as compared to $716,062 for the year ended December 31, 2024. In 2024 the sale of a 10% interest in T20 resulted in a one-time gain of $835,046. During the year ended December 31, 2025 the 29 MW expansion of T20 resulted in a $1,629,644 increase in investment income as compared to the year ended December 31, 2024.

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***Change in Fair Value of Warrant Liability***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2025** | **2024** | **$ Change** | **% Change** |
| Change in fair value of warrant liability | $(5536816) | $(2566552) | $(2970264) | 116% |

---

Change in fair value of warrant liability for the year ended December 31, 2025 resulted in a loss of $5,536,816, an increase of $2,970,264, or 116%, as compared to the $2,566,552 loss resulting from the change in fair value of warrant liability for the year ended December 31, 2024. The amount represents the increase in fair value of type 1 warrants from 2024 to 2025 due to the increased market price of the Company's stock per its 409A valuation.

***Change in Fair Value of Digital Assets***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2025** | **2024** | **$ Change** | **% Change** |
| Change in fair value of digital assets | $81919 | $188682 | $(106763) | (57)% |

---

Change in fair value of digital assets for the year ended December 31, 2025 was $81,919, a decrease of $106,763, or 57%, as compared to the $188,682 gain resulting from the change in fair value of digital assets for the year ended December 31, 2024. The decrease is driven by the decrease in market value for bitcoin at each of the defined period close dates. The Company held 0 and 5.39 bitcoin on December 31, 2025 and 2024, respectively.

***Gain on Remeasurement of Investment in TCM***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2025** | **2024** | **$ Change** | **% Change** |
| Gain on remeasurement of investment in TCM | $14549536 | $— | $14549536 | —% |

---

Gain on remeasurement of investment in TCM for the year ended December 31, 2025 was $14,549,536, compared to $0 for the year ended December 31, 2024. The expense is the difference in the carrying value of TCM immediately prior to the date the Company acquired the remaining interest in TCM, and TCM's fair value as of that date recorded in connection with acquisition of TCM, which was April 1, 2025.

***Loss on Extinguishment of Debt***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2025** | **2024** | **$ Change** | **% Change** |
| Loss on extinguishment of debt | $(1037501) | $(83757) | $(953744) | 1139% |

---

Loss on extinguishment of debt for the year ended December 31, 2025 was $1,037,501, an increase of $953,744, or 1,139%, as compared to a loss of $83,757 for the year ended December 31, 2024. The expense is primarily driven by the retirement of a convertible note immediately prior to the TCM acquisition and the issuance of preferred stock for the partial conversion of TCM's convertible note in May and September 2025.

***Loss on Settlement of Lease Liability***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2025** | **2024** | **$ Change** | **% Change** |
| Loss on settlement of lease liability | $(1206067) | $— | $(1206067) | —% |

---

Loss on settlement of lease liability for the year ended December 31, 2025 was $1,206,067, an increase of $1,206,067 as compared to $0 for the year ended December 31, 2024. The expense is primarily driven by termination of certain finance leases.

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***Interest Expense, Net***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2025** | **2024** | **$ Change** | **% Change** |
| Interest expense, net | $(1929855) | $(1119496) | $(810359) | 72% |

---

Interest expense, net for the year ended December 31, 2025 was $1,929,855, an increase of $810,359 as compared to $1,119,496 for the year ended December 31, 2024. The increase is driven by an overall increase in Notes Payable to $11,775,417 as of December 31, 2025, as compared to $5,068,999 as of December 31, 2024.

 **Segment Results of Operations**

We operate our business as two operating and reportable segments: Bitcoin and HPC. For additional information about our segments, see Note 22 "Segment Reporting" in the notes to our consolidated financial statements.

The following tables summarize our segment results of operations for the years ended December 31, 2025 and 2024:

 ***Revenue***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2025** | **2024** | **$ Change** | **% Change** |
| Bitcoin  | $6907165 | $8095672 | $(1188507) | (15)% |
| HPC  | 4938705 |  | 4938705 | —% |
|  | $11845870 | $8095672 | $3750198 | 46% |

---

Bitcoin revenue for the year ended December 31, 2025 was $6,907,165, a decrease of $1,188,507 as compared to $8,095,672 for the year ended December 31, 2024. The decrease is driven by the acquisition of TCM and the pivot to focus on the HPC business.

HPC revenue for the year ended December 31, 2025 was $4,938,705, an increase of $4,938,705 as compared to $0 for the year ended December 31, 2024. The increase is driven by the acquisition of TCM.

***Cost of Revenue***

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2025** | **2024** | **$ Change** | **% Change** |
| Bitcoin  | $4723646 | $5371049 | $(647403) | (12)% |
| HPC  | 1697561 |  | 1697561 | —% |
| &nbsp;&nbsp;&nbsp;&nbsp;Bitcoin net loss for the year ended December 31, 2025 was $314,468, a decrease of $8,258,470 as compared to | $6421207 | $5371049 | $1050158 | 20% |

---

Bitcoin cost of revenue for the year ended December 31, 2025 was $4,723,646, a decrease of $647,403 as compared to $5,371,049 for the year ended December 31, 2024. The decrease is driven by the acquisition of TCM and the pivot to focus on the HPC business.

HPC cost of revenue for the year ended December 31, 2025 was $1,697,561, an increase of $1,697,561 as compared to $0 for the year ended December 31, 2024. The increase is driven by the acquisition of TCM.

 ***Operating Expenses***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2025** | **2024** | **$ Change** | **% Change** |
| Bitcoin  | $3868949 | $9047961 | $(5179012) | (57)% |
| HPC  | 7111668 |  | 7111668 | —% |
| Other  | 4703223 | 1462620 | 3240603 | 220% |
|  | $15683840 | $10510581 | $5173259 | 49% |

---

Bitcoin operating expenses for the year ended December 31, 2025 were $3,868,949, a decrease of $5,179,012 as compared to $9,047,961 for the year ended December 31, 2024. The decrease is driven by the acquisition of TCM and the pivot to focus on the HPC business.

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HPC operating expenses for the year ended December 31, 2025 was $7,111,668, an increase of $7,111,668 as compared to $0 for the year ended December 31, 2024. The increase is driven by the acquisition of TCM.

 ***Net Loss***

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2025** | **2024** | **$ Change** | **% Change** |
| Bitcoin  | $314468 | $(7944002) | $8258470 | (104)% |
| HPC  | 8910802 |  | 8910802 | —% |
| Other  | (13685149) | (5240372) | (8444777) | 161% |
|  | $(4459879) | $(13184374) | $8724495 | (66)% |

---

Bitcoin net loss for the year ended December 31, 2025 was $314,468, a decrease of $8,258,470 as compared to a loss of $7,944,002 for the year ended December 31, 2024. The decrease is driven by the acquisition of TCM and the pivot to focus on the HPC business.

HPC net income for the year ended December 31, 2025 was $8,910,802, an increase of $8,910,802 as compared to $0 for the year ended December 31, 2024. The increase is driven by the acquisition of TCM.

**Non-GAAP Financial Measures**

In this registration statement, we have provided a non-GAAP measure, which we define as financial information that has not been prepared in accordance with U.S. GAAP. The non-GAAP financial measure provided herein is earnings before interest, taxes, non-cash and other items ("Adjusted EBITDA"). Adjusted EBITDA should be viewed as supplemental to, and not as an alternative for, net income or loss calculated in accordance with U.S. GAAP (referred to below as "Net loss").

We believe that the presentation of Adjusted EBITDA is useful to investors in their analysis of our results because it helps facilitate investor understanding of decisions made by management in light of the performance metrics used in making those decisions. In addition, as more fully described below, we believe that providing Adjusted EBITDA, together with a reconciliation of net loss to Adjusted EBITDA, helps investors make comparisons between our Company and other companies that may have different capital structures, different effective income tax rates and tax attributes, different capitalized asset values, and/or different forms of employee compensation. However, Adjusted EBITDA is not intended as a substitute for comparisons based on net loss. In making any comparisons to other companies, investors need to be aware that companies use different non-GAAP measures to evaluate their financial performance. Investors should pay close attention to the specific definition being used and to the reconciliation between such measures and the corresponding U.S. GAAP measures provided by each company under applicable SEC rules.

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***Limitations on the use of non-GAAP financial measures***

There are limitations to using non-GAAP financial measures because non-GAAP financial measures are not prepared in accordance with U.S. GAAP and may be different from non-GAAP financial measures provided by other companies.

The non-GAAP financial measures are limited in value because they exclude certain items that may have a material impact upon our reported financial results. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management about which items are adjusted to calculate our non-GAAP financial measures. We compensate for these limitations by analyzing current and future results on a U.S. GAAP basis as well as a non-GAAP basis and also by providing U.S. GAAP measures in our public disclosures.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP. We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure to evaluate our business and to view our non-GAAP financial measures in conjunction with the most directly comparable U.S. GAAP financial measures.

The following table reconciles the specific items excluded from U.S. GAAP metrics in the calculation of non-GAAP metrics for the periods shown below:

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| | | |
|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2025** | **2024** |
| Revenue | $11845870 | $8095672 |
| **Net Income (loss)** | (4459879) | (13184374) |
| Depreciation and amortization (inclusive of ROU amortization) | 5682455 | 7164034 |
| Interest expense, net | 1929855 | 1119496 |
| Income tax expense | 423381 |  |
| Stock based compensation | 922740 | 313640 |
| Change in fair value of warrant liability | 5536816 | 2566552 |
| Change in fair value of digital assets | (81919) | (188682) |
| Gain on sale of equity method investments |  | (835046) |
| Gain on sale of investment in joint venture |  | (155286) |
| (Gain) loss on disposal of property and equipment | (462) | 2525408 |
| Loss on settlement of lease liability | 1206067 |  |
| Loss on extinguishment of debt | 1037501 | 83757 |
| Gain on remeasurement of investment in TCM | (14549536) |  |
| **Adjusted EBITDA** | $(2352981) | $(590501) |

---

Adjusted EBITDA for the year ended December 31, 2025 was a loss of $2,352,981 as compared to a loss of $590,501 for the year ended December 31, 2024, a decline of $1,762,480. The decline is driven by the increased operating costs associated with public readiness and personnel, net of increased revenues.

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**Going Concern, Liquidity and Capital Resources**

The Company has incurred recurring losses since inception resulting in an accumulated deficit of $37,546,254 as of December 31, 2025. For the year ended December 31, 2025, the Company had operating cash outflows of $5,677,062 and had an operating loss of $10,259,177. The Company's operations have been funded partially through the issuance of debt. These factors raise substantial doubt about the Company's ability to continue as a going concern for a period of one year from the issuance of these consolidated financial statements.

In assessing the Company's ability to continue as a going concern, the Company monitors and analyzes its cash and its ability to generate sufficient cash flow in the future to support its operating and capital expenditure commitments. At December 31, 2025, the Company had cash of $11,712,493. The Company's plans to alleviate the substantial doubt include drawing on its $500,000,000 credit facility and receiving net proceeds from a convertible note of $14,000,000. Management concluded these plans will alleviate the substantial doubt about the Company's ability to continue as a going concern for the one-year period extending from the date of issuance of these financial statements.

**Cash Flows for the Years Ended December 31, 2025 and 2024**

The following table sets forth a summary of cash flows for the years presented:

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| | | |
|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2025** | **2024** |
| Net cash used in operating activities | $(5677062) | $(2021408) |
| Net cash used in investing activities | (8594008) | (1871322) |
| Net cash provided by financing activities | 22013097 | 7231852 |
| Net increase in cash | $7742027 | $3339122 |

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***Net Cash Used In Operating Activities***

Net cash used in operating activities of $5,677,062 increased by $3,655,654 for the year ended December 31, 2025 as compared to cash used in operating activities of $2,021,408 for the year ended December 31, 2024. The increase was driven by costs incurred with public readiness and increased personnel costs associated with the Company's growth.

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***Net Cash Used In Investing Activities***

Net cash used in investing activities of $8,594,008 increased by $6,722,686 for the year ended December 31, 2025 as compared to cash used in investing activities of $1,871,322 for the year ended December 31, 2024. This is primarily due to $3,933,522 used to purchase property and equipment and $10,659,328 used to place deposits on power equipment, net of $2,441,275 of cash acquired on April 1, 2025 as part of our acquisition of TCM and an increase of $1,984,000 in distributions from T20, an equity method investment.

***Net Cash Provided By Financing Activities***

Net cash provided by financing activities of $22,013,097 increased by $14,781,245 for the year ended December 31, 2025 as compared to cash provided by financing activities of $7,231,852 for the year ended December 31, 2024. This is primarily due to proceeds from sale of common stock of $28,011,386, offset by repayments on debt of $6,876,261 and repayments on finance lease obligations of $2,022,552.

**Seasonality**

We believe there is some seasonality in our business. In January and February, when temperatures are cooler, miners are more efficient. We typically generate more revenue during this period. On the other hand, in July and August, when the power grid is operating at full capacity due to peak power demand, we occasionally shut down certain operations for short durations (typically a few hours) to sell power back to the grid. Our revenue is typically lower during this period. Similarly, we typically see a slight decline in HPC utilization rates in the summer months and over holidays.

**Critical Accounting Estimates**

Management's discussion and analysis of the Company's financial condition and results of operations are based upon the Company's Consolidated Financial Statements that have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.

On an on-going basis, the Company evaluates its estimates, including those related to revenues, stock-based compensation, income taxes, contingencies, and litigation.

The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The Company believes the following critical accounting estimates used in the preparation of its Consolidated Financial Statements affect its more significant judgments and estimates.

***Business Combinations***

The Company accounts for business acquisitions using the acquisition method of accounting, in accordance with ASC 805, under which assets acquired and liabilities assumed are recorded at their respective fair values at the acquisition date. The fair value of the consideration paid is assigned to the assets acquired and liabilities assumed based on their respective fair values. Goodwill represents the excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed.

The Company's management exercises significant judgments in determining the fair value of assets acquired and liabilities assumed, as well as intangibles and their estimated useful lives. Fair value and useful life determinations are based on, among other factors, estimates of future expected cash flows and appropriate discount rates used in computing present values. These judgments may materially impact the estimates used in allocating acquisition date fair values to assets acquired and liabilities assumed, as well as the Company's current and future operating results. Actual results may vary from these estimates which may result in adjustments to goodwill and acquisition date fair values of assets and liabilities during a measurement period or upon a final determination of asset and liability fair values, whichever occurs first. Adjustments to the fair value of assets and liabilities made after the end of the measurement period are recorded within the Company's operating results.

***Revenue***

The Company utilizes judgment to determine whether performance obligations in a contract are distinct and whether they are delivered at a point in time or over time. Judgment is also necessary to assess revenue recognized under variable revenue arrangements.

***Revenue from Cryptocurrency Mining***

The Company participates in a third-party operated mining pool. As of April 2025, the pool operator is Luxor Technology Corporation. Prior to April 2025, the pool operator was Fortitude Mining LLC (formerly Foundry Digital). As a result of the change in pool operator, the Company updated its accounting policy to change the end of its contract period from 16:00:00 coordinated universal time ("UTC") to 23:59:59 UTC. As a participant in the third-party operated mining pool, the Company provides a service to provide computing power to the third-party operated mining pool. The Company's enforceable right to compensation begins when, and lasts as long as, the Company provides computing power to the mining pool operator.

**Step 1**: The Company has identified the third-party mining pool operator as its customer. The Company enters into a contract with the customer to provide its computing power to the customer's mining pool. The contracts are terminable without penalty at any time by either party, and thus the contract term is shorter than a 24-hour period and the contracts are continuously renewed.

Applying the criteria per Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 606-10-25-1, the contract arises at the point that the Company provides computing power to the customer's mining pool, which is considered contract inception, because customer consumption is in tandem with delivery of the computing power.

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**Step 2**: In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606's definition of a "distinct" good or service (or bundle of goods or services) if both of the following criteria are met:

● 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 (i.e., the good or service is capable of being distinct); and

● The entity's promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract).

Based on these criteria, the Company has identified a single performance obligation of providing computing power to the mining pool operator. The continuous renewal options do not represent material rights because they do not provide the customer with the right to purchase additional goods or services at a discount. Specifically, the contract is renewed at the same terms, conditions, and rate as the current contract which is consistent with market rates, and there are no upfront or incremental fees in the initial contract.

**Step 3**: The Company receives non-cash consideration in the form of bitcoin, the fair value of which the Company measures at 23:59:59 UTC and 16:00:00 UTC on the date of contract inception using the Company's principal market for bitcoin, Bitcoin Reference Rate, when the pool operator is Luxor and Foundry, respectively. The contract renews continuously throughout the day, and thus the value of the consideration should be assessed continuously throughout the day, and the Company has concluded to use the 23:59:59 UTC and 16:00:00 UTC bitcoin price each day when the pool operator is Luxor and Foundry, respectively. Revenue is recognized on the same day that control of the services transfers to the customer, which is the same day as contract inception. According to the customer contract, daily settlements are made to the Company by the customer based on the computing power provided over the contract periods occurring over a 24-hour period and the payout is made the following day. There are no other forms of variable considerations, such as discounts, rebates, refunds, credits, price concessions, incentives, performance bonuses, penalties, or other similar items.

The Company earns non-cash consideration based on the Full-Pay-Per-Share ("FPPS") payout method set forth by the customer in the form of bitcoin. The amount of bitcoin the Company is entitled to for providing hash calculations to the customer's mining pool under the FPPS payout method is made up of block rewards and transaction fees less mining pool fees determined as follows:

● The non-cash consideration calculated as a block reward over the continuously renewed contract periods is based on the total blocks expected to be generated on the Bitcoin Network for the daily 24-hour period beginning 00:00:00 UTC and 16:00:01 UTC and ending 23:59:59 UTC and 16:00:00 UTC when the pool operator is Luxor and Foundry, respectively, in accordance with the following formula: the computing power that the Company provides to the customer as a percent of the Bitcoin Network's total computing power, multiplied by the total Bitcoin Network block rewards expected to be generated for the same period.

● The non-cash consideration calculated as transaction fees paid by transaction requestors is based on the share of total actual fees paid over the continuously renewed contract periods beginning 00:00:00 UTC and 16:00:01 UTC and ending 23:59:59 UTC and 16:00:00 UTC when the pool operator is Luxor and Foundry, respectively, in accordance with the following formula: total actual transaction fees generated on the Bitcoin Network during the contract period as a percent of total block rewards the Bitcoin Network actually generated during the same period, multiplied by the block rewards the Company earned for the same period noted above.

● The sum of the block reward and transaction fees earned by the Company is reduced by mining pool fees charged by the customer for operating the mining pool based on a rate schedule per the mining pool contract. The fee charged during the years ended December 31, 2025 and 2024 was 0.348% and 0.43%, respectively. The mining pool fee is only incurred to the extent the Company provides computing power and generates revenue in accordance with the customer's payout formula during the continuously renewed contract periods beginning 00:00:00 UTC and 16:00:01 UTC and ending 23:59:59 UTC and 16:00:00 UTC daily, when the pool operator is Luxor and Foundry, respectively.

**Step 4**: There is a single performance obligation (i.e., to provide computing power to the customer) for the contract; therefore, all consideration from the customer is allocated to this single performance obligation.

**Step 5**: The Company's performance is completed over time as the customer obtains control of the computing power. The performance obligation of computing power is fulfilled over time, as opposed to a point in time, because the Company provides the computing power throughout the contract period and the customer simultaneously obtains control of the service and uses it to produce bitcoin.

There is no deferred revenue or other liability obligations recorded by the Company since there are no payments in advance of the performance, and there are no remaining performance obligations after providing computing power.

***Revenue from Mining Hosting Services***

The Company has also entered into hosting contracts where it operates mining equipment owned by third parties within its facilities in exchange for a fee or reimbursement of electricity cost including a markup.

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**Step 1**: The Company has identified the third-party mining equipment owners as its customer. The Company enters into a contract with the customer to host its miners on the Company's network. The contracts are terminable without penalty at any time if the termination is agreed upon by both parties, and thus the contract term is the stated term.

**Step 2**: In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606's definition of a "distinct" good or service (or bundle of goods or services) if both of the following criteria are met:

● 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 (i.e., the good or service is capable of being distinct); and

● The entity's promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract).

Based on these criteria, the Company has identified one performance obligation of hosting the mining equipment. The service the Company provides also includes monitoring, active troubleshooting, and various maintenance levels for the mining equipment.

**Step 3**: The Company receives non-cash consideration in the form of US Digital Coin ("USDC"). The Company uses a spot rate on of the date of payment from the customer to convert USDC to U.S. dollars.

The Company's hosting contracts can contain service level agreement clauses, which guarantee a certain percentage of time the power will be available to its customer. In the rare case that the Company may incur penalties under these clauses, the Company recognizes the payment as variable consideration and a reduction of the transaction price and, therefore, of revenue, when not in exchange for a good or service from the customer.

Customer contracts can include advance payment terms in the form of monthly cash prepayments and/or upfront cash payments at contract inception. Advance payments are recorded as deferred revenue and recognized over time (generally, the month of hosting service to which they relate) as the customer simultaneously receives and consumes the benefits of the Company's performance. There is no significant financing component in these transactions due to the short-term nature of the payments.

**Step 4**: No allocation of transaction price is required as there is only one performance obligation in each contract.

**Step 5**: The Company recognizes variable hosting revenue each month as the uncertainty related to the consideration is resolved, hosting services are provided to its customer, and its customer utilizes the hosting service (the customer simultaneously receives and consumes the benefits of the Company's performance). The Company's performance obligation related to these services is satisfied over time.

***Revenue from Compute Power***

The Company generates revenue primarily from providing compute power to a marketplace, but in some instances provides compute power directly to end users. Our largest sale channel by revenue, RunPod operates as a third-party marketplace and sales channel through which the Company makes its deployed compute power capacity available to end users. Under these arrangements, RunPod contracts directly with the end users, sets end-user pricing, and is responsible for customer onboarding, billing, and collections. The Company does not have a direct contractual relationship with end users accessing compute services through the RunPod platform. Instead, RunPod purchases compute capacity from the Company and resells access to that capacity to its customers, retaining approximately 20% of end-user revenue as a marketplace fee under its standard service terms. Accordingly, RunPod is the Company's direct customer in these marketplace compute power arrangements. This structure is generally consistent with the manner in which the Company utilizes other third-party marketplaces as sales and distribution channels The compute power is maintained by the Company and made available to customers for large-scale cloud processing.

Marketplace provider partners (RunPod, for example) manage orchestration and customer acquisition in exchange for a revenue share. In RunPod's case, currently 80% of revenue is shared to the Company and 20% is retained by RunPod under RunPod's standard service terms.

**Step 1**: In arrangements with a marketplace provider partner, the Company has identified the marketplace as its customer. In arrangements entered into directly with end users, the end user is the customer.

The Company has entered into agreements which are structured around ongoing service delivery, with compute power provided on a usage basis. The contract is enforceable and includes defined terms for service levels, pricing, and revenue sharing. The contract is continuously active and renewed, with no penalties for termination, and services are delivered daily based on actual usage.

Applying the criteria per ASC 606-10-25-1, the contract arises at the point the Company begins providing compute power through its bare metal servers. This marks contract inception, as the customer's consumption of compute power is simultaneous with the Company's delivery of the service. The contract supports continuous usage-based billing, and the Company's enforceable right to compensation begins and continues as long as compute power hours are delivered and consumed by customers.

**Step 2**: In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606's definition of a "distinct" good or service (or bundle of goods or services) if both of the following criteria are met:

● 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 (i.e., the good or service is capable of being distinct); and

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● The entity's promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract).

Based on these criteria, the Company has identified a single performance obligation to provide compute power to customers. The continuous renewal options do not represent material rights because they do not provide the customer with the right to purchase additional goods or services at a discount. Specifically, the contract is renewed at the same terms, conditions, and rate as the current contract, which is consistent with market rates, and there are no upfront or incremental fees in the initial contract.

**Step 3**: In arrangements with a marketplace provider partner, the transaction price is based on net revenue shared by the marketplace to the Company. In arrangements entered into directly with end users, the transaction price is based on revenue received directly from end users for compute power. There is no non-cash consideration involved, and all payments are made in U.S. dollars. The contract does not include other forms of variable consideration such as rebates, penalties, or bonuses, except for service credits tied to uptime performance, which are treated as variable consideration and reduce the transaction price when applicable.

**Step 4**: There is a single performance obligation (i.e., to provide compute power) for the contract; therefore, all consideration from the customer is allocated to this single performance obligation.

**Step 5**: The Company's performance is completed over time as compute power is delivered and consumed. The performance obligation of computing power is fulfilled over time, as opposed to a point in time, because the Company provides the compute power throughout the contract period and the customer simultaneously obtains control of the service and integrates it into its platform offerings.

There are no deferred revenues or remaining obligations once compute power is delivered.

***Stock-based compensation***

Under the fair value recognition provision, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the requisite service period. The Company makes certain assumptions to value and expense its various share-based payment awards. The fair value is determined using an option pricing model. The cost of awards of equity instruments is recognized on a straight-line basis over the vesting period, which is the requisite service period, and is recorded as stock-based compensation expense.

***Income Taxes***

The Company utilizes judgment and estimates in assessing the need for the valuation allowance related to deferred tax assets, including net operating loss carry-forwards. In the event the Company were to determine that it would not be able to realize all or part of its net deferred tax assets, an adjustment to the deferred tax assets would be charged to income in the period such determination was made.

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***Recently Issued Accounting Pronouncements*** – ***Adopted***

In August 2023, the FASB issued Accounting Standards Update ("ASU") 2023-05, *Business Combinations*—*Joint Venture Formations (Topic 805): Recognition and Initial Measurement.* This standard addresses the accounting for contributions made to a joint venture, upon formation, in a joint venture's separate financial statements. The new requirements are effective for all joint ventures within the ASU's scope that are formed on or after January 1, 2025. The Company adopted this standard on January 1, 2025. The adoption of this standard is reflected in the Company's consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, *Improvements to Income Tax Disclosures*, a final standard on improvements to income tax disclosures. The standard requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. The standard applies to all entities subject to income taxes and is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. For public business entities, the new requirements will be effective for annual periods beginning after December 15, 2024. The Company adopted this standard on January 1, 2025. The adoption of this standard is reflected in the Company's consolidated financial statements.

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

In November 2024, the FASB issued ASU 2024-03, *Income Statement*—*Reporting Comprehensive Income*—*Expense Disaggregation Disclosures (Topic 220): Disaggregation of Income Statement Expenses*. This guidance requires additional disclosure of certain amounts included in the expense captions presented on the statement of operations as well as disclosures about selling expenses. The ASU is effective on a prospective basis, with the option for retrospective application, for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted for annual financial statements that have not yet been issued. The Company is currently evaluating the impact of ASU 2024-03 on its condensed consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-04, *Debt*—*Debt with Conversion and Other Options (Topic 470).* This guidance clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The ASU is effective on a prospective basis, with the option for retrospective application, for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities that have adopted the amendments in ASU 2020-06. The Company is currently evaluating the impact of ASU 2024-04 on its condensed consolidated financial statements and related disclosures.

In July 2025, the FASB issued ASU 2025-05, *Financial Instruments*—*Credit Losses (Topic 326).* This guidance contains amendments that provide decision-useful information to investors and other financial statement users while reducing the time and effort necessary to analyze and estimate credit losses for current accounts receivable and current contract assets. The amendments will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. The Company is currently evaluating the impact of ASU 2025-05 on its condensed consolidated financial statements and related disclosures.

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**BUSINESS**

**Overview**

QumulusAI is a cloud infrastructure company specializing in rapid deployment of graphics processing unit ("GPU")-powered solutions for artificial intelligence ("AI") applications, serving a critical market that is often overlooked by hyperscale providers focused on the largest enterprises. Our platform delivers flexible, competitively priced, and customizable solutions for underserved small and mid-market customers—including machine learning teams, AI infrastructure startups, and research institutions—while also supporting the scale and complexity requirements of large enterprises, such as long-term deployments or supplemental on-demand compute capacity.

Today, we distinguish ourselves by deploying, activating and producing revenue from GPU infrastructure within approximately 90 days. We do so across a distributed network of sales channel and platform partners and the strategic use of stranded colocation facilities, enabling us to connect with thousands of developer clients with an expedited path from procurement to revenue generation. Traditional infrastructure providers, by comparison, can take 12 to 24 months to activate new capacity.

QumulusAI is headquartered in Marietta, Georgia. Here, we operate more than 1,120 GPUs across three colocation data centers in Marietta, Georgia, Kansas City, Missouri, and Philadelphia, Pennsylvania. We have secured rights of first refusal for 30 MW of information technology ("IT") load capacity space for our GPU equipment and we are actively planning for expansion exceeding 120MW of total IT load across our platform with potential to support over 90,000 NVIDIA B200s (among the latest generation GPUs purpose-built for foundation model training), or as many as 1,500,000 GPUs optimized for AI inference at scale.

The majority of our revenue derives from flexible consumption models that align with evolving customer needs. According to an International Data Corporation report, 43% of enterprises now split their compute usage between on-demand and reserved/commitment-based instances—highlighting that less than half of workloads are committed long-term (*AI Computing Resources Rental Market Report*. PW Consulting Information & Electronics Research Center. Published 05/13/2025. https://pmarketresearch.com/it/ai-computing-resources-rental-market/).

In 2023, a S&S Insider report found 69% of GPU as a Service revenue came from pay-per-use (on demand) pricing models, demonstrating a strong preference for flexibility over reserved pricing (*GPU As A Service Market Size, Share & Segmentation By Pricing Model (Pay-per-use, Subscription-based Plans), By Deployment Model, By Enterprise Type, By Application, By Region, And Global Forecast 2024-2032,* S&S Insider, February 2025. https://www.snsinsider.com/reports/gpu-as-a-service-market-5782). Our platform capitalizes on this market preference by offering multiple engagement models—from pay-as-you-go to reserved instances—enabling us to capture premium pricing while maintaining high utilization across our infrastructure.

Our QumulusAI cloud compute ecosystem combines proprietary software and cloud services, developed in collaboration with technology partners, to optimize AI workflows at scale. This ecosystem approach enables us to deliver comprehensive solutions that extend beyond raw compute power, incorporating orchestration, automation, and monitoring capabilities that reduce operational complexity for our customers. Our platform currently powers varied AI use cases and is trusted by leading AI and high-performance computing ("HPC") infrastructure platforms and marketplaces, including RunPod Inc., Shadeform, Hydra Host, Inc., and Vast.ai Inc.

We are in the process of establishing collaborations and relationships across the AI ecosystem—including with leading chipmakers, original equipment manufacturers, value-added resellers, and software vendors—enabling rapid procurement and deployment of critical infrastructure components. To date, we have formalized our relationship with hosted.ai. The exclusive partnership enables us to build a next-generation multi-tenant inference cloud. hosted.ai software-defined GPU technology allows for elastic resource provisioning and GPU overcommitment capabilities, meaning we can serve more customers per GPU while maintaining optimal performance.

Industry research indicates that, in conventional environments where customers are granted exclusive access to specific GPUs, effective hardware-level utilization is often materially below theoretical capacity due to workload intermittency, scheduling inefficiencies, and software and system-level constraints. For example, SemiAnalysis has noted that, "In practice, Nvidia GPUs typically achieve only about a small portion of their theoretical peak once communication overhead, memory stalls, power limits, and other system effects are factored in. A good rule of thumb for training is ~30%… with utilization varying heavily by workload" (*TPUv7: Google Takes a Swing at the Inference Market, SemiAnalysis*. 11/28/2025. https://newsletter.semianalysis.com/p/tpuv7-google-takes-a-swing-at-the). Even when all available GPU hours are sold, these factors can result in meaningful portions of deployed hardware capacity remaining idle or underutilized.

Through our collaboration with hosted.ai, whose software platform is currently in an early (alpha) stage of development, we intend to deploy a software abstraction and orchestration layer designed to enable dynamic workload placement, elastic resource provisioning, and the sharing of GPU capacity across multiple customers over time. Rather than assigning exclusive access to specific physical GPUs, this approach is intended to allow workloads to be scheduled across available capacity, enabling physical GPU resources to support multiple customers depending on demand.

Our agreement with hosted.ai establishes a strategic collaboration to jointly commercialize an integrated AI compute and GPU-as-a-Service offering. Under the arrangement, hosted.ai licenses its software stack to us for deployment on our infrastructure, subject to agreed-upon governance, licensing, exclusivity, revenue-sharing, and intellectual property provisions. While we believe this architecture has the potential to increase sustained fleet-level GPU utilization under certain operating conditions compared to traditional deployment approaches, actual utilization levels will depend on customer demand, workload characteristics, system maturity, and execution, and may vary materially over time. There can be no assurance that any particular utilization level will be achieved.

Additionally, through our largest channel partner, RunPod Inc. ("RunPod"), we have access to a customer base of over 10,000 AI developers and organizations utilizing the RunPod marketplace. Our servers deployed on the RunPod platform host up to approximately 2,000 monthly active users ("MAUs"), based on information provided to us by RunPod. For purposes of this estimate, RunPod defines an MAU as a unique, billable end-user account or system account that consumes compute resources on the RunPod platform during a given calendar month. RunPod operates as a third-party marketplace and sales channel and maintains the direct contractual relationship with end users accessing compute services through its platform. Under the operational and contractual parameters of the RunPod marketplace, RunPod controls user authentication, account creation, billing, and usage monitoring. The Company does not have direct access to end-user-level data and does not independently determine or verify user uniqueness using identifiers such as IP addresses, know-your-customer ("KYC") processes, or other attribution mechanisms. Accordingly, the Company relies on aggregated usage and activity information reported by RunPod.

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As a result, the reported MAU figure represents an estimate and may be subject to significant variability from day to day and month to month, depending on customer demand, workload patterns, and how end users utilize and scale their workloads on the platform. The Company does not make representations regarding the precision of this estimate beyond the information provided by RunPod.

Revenue generated from compute services accessed through the RunPod marketplace is shared on an 80% QumulusAI / 20% RunPod basis under RunPod's standard service terms, as described below under "—*Our Customers*." Because the Company's contractual relationship is with RunPod rather than individual end users, the Company does not have visibility into whether any individual end user or entity accounts for a material portion of the activity reflected in the MAU estimate. Any concentration of usage or revenue at the end-user level is therefore not directly observable by the Company.

These marketplace users rely on QumulusAI to provision, operate, and maintain the underlying compute infrastructure, while RunPod provides the marketplace and performs customer acquisition, sales, billing, and related customer management functions.

Our historical operations include the construction and management of over 100 MW of data center capacity, supporting some of the largest participants in the blockchain ecosystem. This experience provides us with proven capabilities in power procurement, data center operations, and infrastructure scaling that directly translate to our AI-focused offerings. As we strategically taper our blockchain offerings and repurpose our power portfolio for HPC workloads, we are uniquely positioned to address the growth in demand for AI infrastructure against the backdrop of constrained power availability and rising electricity costs.

Our strategic holdover business—managed services for crypto mining infrastructure—serves as both a valuable revenue generator and a critical component of our infrastructure strategy. We currently participate in all Demand Response and Curtailment programs offered by the utility providers. This enables us to turn our power off safely within minutes to support power needed by the grid, thus creating additional revenue. Unlike passive battery storage systems that provide no economic value until discharged, our managed crypto mining infrastructure generates continuous revenue while offering the same grid-balancing capabilities. We can scale power consumption to near-capacity within minutes or instantly curtail operations to return energy to the grid during peak demand periods, generating additional operating profits. This dynamic load flexibility enables us to secure large blocks of low-cost base power capacity and positions our strategic holdover business to function as both an active revenue generator and a scalable energy asset. Demand Response and Curtailment revenue and credits for the period of November 2024 through December 2025 were $388,599 at our Watonga facility and $2.7 million for the period of February 2024 through December 2025 at T20, which we sold on February 13, 2026. The revenue and credits were applied against the facility power costs and resulted in a $0.004 and $0.006 reduction in dollars per kilowatt hours at Watonga and T20, respectively.

We currently receive bitcoin from mining and liquidate it daily. We have liquidated our reserves and currently do not hold any other digital assets. In the future, we may additionally hold USDC to satisfy the payment of loans pursuant to our guidance facility with Permian Labs described under "*Management*'*s Discussion and Analysis of Financial Condition and Results of Operations* – *Recent Developments*," which requires payments to be made in USDC.

**Company History**

***Early Operations (2019***–***2021)***

The Company traces its origins to WAHA Technologies, Inc. ("WAHA") and WAHA, Inc. (renamed SPRE Commercial Group, Inc., or "SPRE"), both incorporated in 2019. SPRE focused on data center assets and operations, while WAHA specialized in blockchain managed services. In December 2022, the two entities completed a corporate roll-up to form Global Digital Holdings, Inc. and remain wholly owned subsidiaries of the Company. In April 2025 (after a substantial minority investment in October 2023), Global Digital Holdings, Inc., acquired The Cloud Minders, Inc. (a company focused on GPU-as-a-Service ("GPUaaS") assets and operations), now a wholly owned subsidiary, and rebranded the combined operations as QumulusAI. See "*Unaudited Pro Forma Condensed Combined Financial Information*" and "*Management*'*s Discussion and Analysis of Financial Condition and Results of Operations* – *Recent Developments*" for additional information regarding our acquisition of The Cloud Minders, Inc. On August 18, 2025, Global Digital Holdings, Inc. changed its name to QumulusAI, Inc.

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***Formation of Global Digital Holdings and Data Center Expansion (2022***–***2024)***

In December 2022, WAHA Technologies and SPRE completed a corporate roll-up to consolidate all shareholders under a single cap table, forming Global Digital Holdings, Inc. ("GDH"). In August 2022, SPRE sold the original Washington, Georgia facility, and WAHA Technologies sold 10 MW of ASIC miners to Cleanspark. GDH activated its next 12 MW facility in March 2023 in Forest City, North Carolina, under FCNC Venture, LLC, and sold this facility in December 2024. In March 2023, GDH formed a joint venture, T20 Mining Group, LLC, in Tulsa, Oklahoma, activating 20 MW in August 2023 and an additional approximately 25 MW in January 2025, both currently operational. In June 2024, GDH created SPRE Watonga, OK LLC, activating approximately 12 MW in Watonga, Oklahoma, which remains active. In August 2023, GDH formed SPRE Denton TX, LLC and won a RFP with Denton Municipal Electric ("DME") for up to 20 MW, with plans to permit in the second quarter of 2026 and activate in the third quarter of 2026.

***Acquisition of The Cloud Minders and Rebranding as QumulusAI (2025)***

In October 2023, GDH acquired a 49% interest in The Cloud Minders, Inc. ("TCM"), a provider of GPUaaS infrastructure for artificial intelligence and high-performance computing workloads. GDH completed the acquisition of the remaining 51% of TCM in April 2025, as described under "*Management*'*s Discussion and Analysis of Financial Condition and Results of Operations* – *Recent Developments*." Following this transaction, the combined operations were officially rebranded as QumulusAI, Inc. on August 18, 2025 and now operate as an integrated platform primarily focused on AI/HPC infrastructure, with blockchain managed services and data center assets as secondary operations. Our platform powers some of the most compute-intensive projects underway today, and we've experienced rapid growth since the launch of our GPUaaS business line, all of which is generated through TCM. GPUaaS revenue grew from approximately $1.0 million in 2023 to $2.7 million in 2024, an increase of over 170%, driven largely by marketplace demand from partners such as RunPod Inc. (our relationship with which is managed by TCM). During the year ended December 31, 2025, GPUaaS generated an estimated $4.94 million in revenue.

***Formation of Joint Venture***

TCM and Me Luna Qumulus LLC ("Moonshot") entered into a joint venture entity named QAI Moon, LLC ("QAI Moon"), effective October 1, 2025, wherein (i) TCM is a member holding a 51% interest, and (ii) Moonshot is a member holding a 49% interest.

QAI Moon, TCM and DAC Consulting LLC ("DAC") entered into a joint venture entity named SPRE NKC MO, LLC, effective October 1, 2025, wherein (i) QAI Moon is a member holding a 30% interest, (ii) TCM is a member holding a 35% interest, and (iii) DAC is a member holding a 35% interest. QAI Moon is the manager of the joint venture and owns all of the voting shares. TCM contributed $3,000,000 to SPRE NKC MO, LLC on October 1, 2025. QAI Moon additionally wholly owns SPRE Brooklyn NY, LLC and QAI Moon NKC SPV 1 LLC and owns SPRE PHL PA, LLC together with TCM.

***Sale of Joint Venture Interest***

On January 12, 2026, SPRE TULSA OK, LLC, an indirect wholly owned subsidiary of the Company and party to the T20 joint venture, entered into a Limited Liability Company Interest Purchase Agreement, as amended on February 12, 2026, to sell its 40% interest in the T20 joint venture to a third party. This transaction, which closed on February 13, 2026, providing a $16.5 million cash injection to our balance sheet. The Company intends to use this capital to accelerate the development and scale of its HPC business.

***Operating and Financial Performance History***

GDH revenue decreased from approximately $8.1 million in 2024 to $6.9 million in 2025, reflecting the deliberate transition away from self-mining toward hosting services. While this shift provided greater revenue stability and reduced exposure to bitcoin price volatility, hosting carries lower margins than self-mining during favorable market conditions. The decline also reflects the company's strategic reallocation of capital and operational focus toward expanding and scaling its HPC infrastructure.

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During this period of continued growth and infrastructure expansion, we made significant investments in both our HPC business, TCM—in which we held a 49% ownership interest prior to the April 2025 acquisition—and our digital asset data center and hosting platform. TCM scaled operations significantly in 2024 resulting in a net loss of approximately $2.9 million. GDH, which carries the majority of our fixed infrastructure and power-related expenses, reported net losses of approximately $13.2 million in 2024. GDH acquired TCM in April of 2025 and the consolidated entity reported net losses of approximately $4.5 million in 2025.

On August 18, 2025, Global Digital Holdings, Inc. changed its name to QumulusAI, Inc.

![chartb.jpg](chartb.jpg)

**Industry Background**

Over the last fifty years, technology has undergone several fundamental shifts that have dramatically boosted productivity across industries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. During the 1960s, the advent of mainframe computers introduced large-scale computing and data storage capabilities to numerous organizations, enabling innovations like high-volume transaction processing in the banking sector.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The 1980s saw the rise of client-server architecture, which significantly lowered computing costs and sparked the personal computer revolution—making personal computers ("PCs") widely accessible and driving major productivity improvements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. In the 1990s, the internet reshaped how people worked, communicated, shopped, and learned, altering daily life and business practices.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The following decades, spanning the 2000s and 2010s, were defined by the rapid adoption of mobile technologies and cloud computing. This introduced unparalleled flexibility in computing resources and unlocked new experiences for customers and developers alike, giving rise to millions of innovative digital products and services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Beginning in 2009, blockchain technology introduced decentralized computing and cryptographic verification methods, enabling digital assets and distributed applications. From 2010 through 2020, advances in AI—driven by breakthroughs in algorithms, large-scale datasets, and high-performance compute—expanded adoption across industries.

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Building on this historical trajectory, AI has emerged as the next transformative wave in technology, with the potential to exceed the impact of previous revolutions. Generative AI is being adopted faster than any major technology in recent history. Research shows that within two years of ChatGPT's launch, 39.4% of working-age Americans had adopted generative AI—approximately twice the adoption rate of personal computers or the internet at similar stages in their development (Bick, A., Blandin, A., & Deming, D. "The Rapid Adoption of Generative AI." NBER Working Paper 32966, September 2024). Looking ahead, Gartner forecasts that by 2026, more than 80% of enterprises will have used generative AI APIs, models, or deployed AI-enabled applications in production environments—up from less than 5% in 2023 (Gartner, "Gartner Says More Than 80% of Enterprises Will Have Used Generative AI APIs or Deployed Generative AI-Enabled Applications by 2026," Published 10/11/23. https://www.gartner.com/en/newsroom/press-releases/2023-10-11-gartner-says-more-than-80-percent-of-enterprises-will-have-used-generative-ai-apis-or-deployed-generative-ai-enabled-applications-by-2026). Moreover, since 2012, the computational power deployed for leading AI model training has been growing at an exponential rate, roughly doubling every three to four months (*AI and compute*. OpenAI. Published 05/16/2018. https://openai.com/index/ai-and-compute/). This surge in computing capability "may prove almost as transformative to the economy as the Industrial Revolution" say many industry analysts—with AI expected to foster productivity gains, enable new products, influence traditional industries, and enable organizations to operate more efficiently (*Does the Rise of AI Compare to the Industrial Revolution?* '*Almost,*' *Research Suggests*. Columbia Business School Research in Brief. Published 04/16/2024. https://business.columbia.edu/research-brief/research-brief/ai-industrial-revolution).

Artificial intelligence represents a pivotal driver of technological progress, with recent research substantially increasing economic impact projections. McKinsey's 2024 analysis projects that AI software and services could generate total economic potential of $15.5 trillion to $22.9 trillion annually by 2040, with generative AI alone contributing $2.6 trillion to $4.4 trillion annually (*AI Could Generate Up To $23 Trillion Annually by 2040*. McKinsey. Published 11/05/24. https://www.marketingaiinstitute.com/blog/mckinsey-ai-economic-impact; *Generative AI can add up to $4.4 trillion in productivity annually*. Consultancy.eu. Published October 9, 2023. https://www.consultancy.eu/news/9358/generative-ai-can-add-up-to-44-trillion-in-productivity-annually). According to industry analysts, global spending on AI infrastructure, including training and inference systems, workload orchestration, high-performance storage, and networking, is projected to approach $337 billion in 2025 and rise to $749 billion by 2028 (*CIOs to spend ambitiously on AI in 2025* — *and beyond*. CIO. Published 11/24/2025. https://www.cio.com/article/3601606/cios-to-spend-ambitiously-on-ai-in-2025-and-beyond.html).

**Demand- and Supply-Side Factors Enabling AI**

We believe that a combination of demand and supply side factors is enabling the massive and unprecedented growth of AI and powering the new industrial revolution.

***Demand-Side Drivers***

● *AI Capabilities Have Evolved Rapidly* 

The field of AI has seen substantial advancement, enabling a wide range of new applications. What began as systems built on simple predictions and pattern recognition has now evolved into large-scale foundational models capable of complex reasoning and decision-making. Beyond generative AI—focused on content generation—we're now entering the era of agentic AI, which may proactively assist, advise, and take actions across a broad spectrum of tasks and industries.

● *AI Delivers Tangible Value to Individuals and Enterprises* 

AI is transforming how people and businesses interact with technology in a variety of sectors, including pharmaceuticals, education, software development, and customer engagement. Furthermore, AI is addressing productivity challenges in high-skill fields by automating routine functions and amplifying human expertise. McKinsey research characterizes AI as a transformative technology that amplifies human capabilities, with the potential to automate activities involving expertise increasing by 34 percentage points, fundamentally changing knowledge work across professions (*Superagency in the workplace: Empowering people to unlock AI*'*s full potential*. McKinsey. Published 01/18/25. https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/superagency-in-the-workplace-empowering-people-to-unlock-ais-full-potential-at-work). .

● *AI is Becoming Part of Enterprise Strategy* 

Organizations are increasingly viewing AI not just as a tool but as a driver of competitive advantage. Leadership teams are fundamentally reshaping IT budgets and strategic plans to prioritize AI. PwC reports that 49% of technology leaders have fully integrated AI into their core business strategy (*2025 AI Business Predictions*. PWC. https://www.pwc.com/us/en/tech-effect/ai-analytics/ai-predictions.html). We believe the integration of AI into business models and workflows is becoming increasingly important for maintaining relevance and gaining market share in a rapidly evolving technological landscape.

***Supply-Side Drivers***

● *Widespread Sophistication of Foundational Models* 

We believe the boom in both proprietary and open-source foundational models has opened the door for more organizations to build and deploy AI-driven tools. These models have gained strength through scale and investment, yet they depend heavily on efficient, high-performance cloud infrastructure to unlock their full potential.

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● *Data Volume Is Exploding* 

AI's growth is sustained by a massive and growing data pool—from proprietary enterprise data to public repositories and rapidly emerging synthetic datasets. Harnessing that data for practical AI applications demands extensive compute power and storage infrastructure.

● *AI-Specific Infrastructure Is Rapidly Improving* 

Infrastructure systems have evolved dramatically to match the needs of modern AI workloads. For instance, analysis of GPU performance shows that floating-point operations ("FLOPS") for machine learning-specific workloads have doubled every 2.3 years (*The computational performance of machine learning hardware has doubled every 2.3 years.* Epoch AI. Published 10/23/2024. https://epoch.ai/data-insights/peak-performance-hardware-on-different-precisions). These sustained improvements in cost-efficiency and speed are lowering barriers to entry and fueling innovation.

**Returns Beyond ROI**

While return on investment ("ROI") is often used as the primary lens for evaluating AI adoption, industry observers note that organizations frequently pursue AI initiatives for reasons that extend well beyond short-term profitability. These motivations—spanning competitive dynamics, capability development, and geopolitical strategy—underscore the multifaceted nature of AI's strategic value. As summarized by GenInnov (The Strategic Calculus of AI: Returns Beyond ROI. GenInnov. Published 08/20/2025. https://www.geninnov.ai/blog/the-strategic-calculus-of-ai-returns-beyond-roi), motivations include:

***Survival Against Disruption***: Established firms invest in AI to avoid being displaced by AI-native competitors who can deliver the same functions more efficiently and at lower cost.

***Geopolitical Competition and Sovereignty***: Nations and industries invest in AI infrastructure to maintain global influence, protect economic security, and ensure relevance in the emerging technology race—particularly where reliance on foreign technology is viewed as a strategic vulnerability.

***Attracting and Retaining Talent***: Cutting-edge AI projects act as magnets for top technical talent, creating long-term innovation advantages even if near-term returns are uncertain.

***Building Internal Capabilities***: Even projects that fail to deliver immediate ROI contribute by developing infrastructure, processes, and expertise that strengthen future efforts.

***High-Risk, High-Reward Investment***: Many organizations treat AI investment like venture capital: broad experimentation may yield losses, but a single breakthrough can create transformative value.

***Strategic Ecosystem Leverage***: Companies may offer AI tools at low or negative margins if doing so drives adoption of other profitable products or locks users into their broader ecosystems.

***Data Advantage***: AI deployments can generate proprietary datasets that compound in value over time, creating barriers to entry that competitors cannot easily replicate.

***Reducing Vendor Dependence***: Developing in-house AI capabilities can reduce reliance on external providers that may later raise prices or control critical infrastructure.

***Strategic Positioning Risk***: Organizations often invest in AI simply to avoid being perceived as falling behind competitors—where missing a critical partnership or breakthrough could risk long-term irrelevance.

***Economic and Social Development***: Governments and public entities support AI development to stimulate broader economic growth and create downstream private-sector opportunities.

***Influencing Industry Standards***: Defining or shaping technical standards can generate long-lasting lock-in effects and secure competitive advantage for years.

***Signaling Future Value***: Announcing AI initiatives can enhance investor confidence and perceived enterprise value, even before measurable financial results are realized.

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These dynamics illustrate that the rationale for AI investment often extends beyond direct financial return, encompassing competitive positioning, long-term capability development, and geopolitical considerations. Such factors may influence the pace of AI adoption and, consequently, demand for specialized infrastructure such as ours.

**Infrastructure as the Foundation of AI Advancement**

We believe the future of AI depends on progress in three key areas: model design, data accessibility, and scalable, high-performance computing infrastructure tailored to AI workloads.

Purpose-built compute infrastructure allows organizations to train AI models, run inference at scale, and shorten development timelines. Better model outcomes are linked to robust computing resources—including FLOPs, training cycles, and inference runtimes. Over the past few years, leading-edge models from companies like OpenAI, Anthropic, Google DeepMind, and Meta have required dramatically increasing computing power relative to earlier generations to unlock performance breakthroughs. For example, an expanded AI model database from Epoch AI reveals that training compute for frontier models has grown by 4–5x per year between 2010 and 2024. (*Training compute of frontier AI models grows 4-5x per year*. Epoch AI. Published 05/28/2024. https://epoch.ai/blog/training-compute-of-frontier-ai-models-grows-by-4-5x-per-year).

As foundational models grow more sophisticated, we anticipate that the demand for computational power will continue to surge. Research on AI scaling laws, such as the findings in Scaling Laws for Neural Language Models, supports the idea that increased compute power correlates with better performance—during both model training and inference (*Scaling Laws for Neural Language Models.* Cornell University. Published 01/23/2020. https://arxiv.org/abs/2001.08361).

For AI-driven companies to stay competitive, they must invest in infrastructure that delivers not just power, but efficiency and reliability, ensuring maximum utilization of every component in the system. One important measure of efficiency is Power Usage Effectiveness ("PUE"), which reflects how much of a facility's total power consumption goes directly to computing versus non-revenue-generating functions like cooling and other operations. QumulusAI targets a low PUE, with certain co-location sites allowing a substantial proportion of total power to be used for compute workloads.

**Building High-Performance AI Infrastructure Is Exceptionally Difficult**

Building AI infrastructure at scale requires fundamentally different architectural approaches than traditional cloud workloads, but achieving hyperscale AI infrastructure demands even more specialized capabilities. While general-purpose cloud platforms excel at distributed applications, AI training and inference require sustained, tightly-coupled compute with microsecond-level synchronization across thousands of accelerators. At larger scales—where clusters span tens of thousands of GPUs—this architectural complexity intensifies exponentially. For instance, a GPU cluster with 16,384 units can require over 7,000 meters of fiber optic cabling and tens of thousands of fiber connections, spanning multiple network layers to support high-bandwidth, low-latency communication essential for training large-scale AI models.

Assembling this level of infrastructure involves navigating complex supply chains and deploying components in data centers built specifically for high-density computing. These facilities must include specialized features like liquid cooling, heat exchangers, and structural designs to accommodate high-power racks—highlighting the level of engineering sophistication required just to operate at baseline functionality.

**Specialized Software Unlocks Infrastructure Potential**

AI supercomputers are intricate and require tailored software to manage and optimize performance. From initial validation of hardware components to provisioning and runtime orchestration, the software stack is critical to reducing downtime and maximizing throughput. Complex AI jobs often necessitate multiple orchestration systems and significant engineering oversight to ensure stable performance.

Once operational, the infrastructure faces enormous strain—AI workloads are resource-intensive and prone to causing system failures. These disruptions can halt training entirely or severely impact inference accuracy, especially in foundational model development where one failed component can jeopardize the entire cluster. Monitoring and mitigating these risks is crucial to maintaining high uptime and cost efficiency. We believe that this creates significant barriers to entry and opportunities for purpose-built AI infrastructure providers to capture premium pricing through superior performance and efficiency.

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**Closing the Efficiency Gap: The MFU Challenge**

Managing large-scale AI infrastructure involves not only building and maintaining it, but also optimizing how workloads are scheduled and resources are used. A major challenge is improving the "Model FLOP Utilization" ("MFU"), which measures actual compute performance relative to the theoretical peak. In practice, a significant portion of GPU capacity goes underused—studies suggest real-world MFU hovers between 35% and 45% (*Wanted: A handy metric for gauging if GPUs are being used optimally*. The Register. Published 05/20/2025. https://www.theregister.com/2025/05/20/gpu_metric/).

Bridging this gap to approach 100% utilization represents a major opportunity for improving the cost-effectiveness and performance of AI systems. However, as GPU clusters grow larger and more complex, maximizing MFU becomes increasingly difficult. Ensuring high utilization rates at scale requires highly specialized operational expertise and intelligent infrastructure design—factors that directly influence the quality and capabilities of AI models.

**Deep Technical Partnerships**

We pursue a collaborative partnership approach designed to expand our technical capabilities by aligning with companies that share our commitment to accelerating innovation across the AI landscape. These strategic alliances are integral to the way we develop and deliver our products and services. By working closely with partners, we're able to tap into advanced functionalities higher up the technology stack and broaden our access to end users who ultimately operate on our infrastructure. These collaborations have enabled meaningful advancements in areas like automated server management, resource optimization, real-time monitoring, alerts, data validation and verification pipelines, and the creation of tailored data solutions. Our strategy also includes close coordination with high-volume-value-added-resellers and key hardware vendors such as Super Micro Computer, Inc., Dell Technologies Inc., Hewlett Packard Enterprise Company, Lenovo Group Limited, and Gigabyte Technology Co., Ltd., whose systems integrate GPUs from NVIDIA with optimized efficiency and performance. Additionally, we work together with data center operators like Coresite, H5, and Nocix to deploy AI-ready infrastructure that incorporates cutting-edge thermal and architectural designs tailored to the unique demands of machine learning workloads.

**Customer Experience**

We are actively expanding and strengthening our Customer Experience teams to support our AI-driven solutions with increasing depth and expertise. Continuously evolving and refining these capabilities is central to who we are. We remain committed to building a customer-focused organization that understands the complexities of AI compute, networking, and storage, and that grows alongside our clients' evolving needs.

Our evolving Customer Experience structure includes:

● **Customer Success and Support Engineering**: Dedicated specialists in this area work closely with customers to facilitate deployment, scaling, and optimization of workloads. By providing personalized guidance and 24/7 technical support, this team is designed to empower customers to fully leverage our solutions and achieve their goals efficiently.

● **Infrastructure Operations Team**: This team focuses on the health and resilience of large-scale compute and network environments, ensuring smooth performance across our customer deployments. The team operates with a focus on proactive monitoring and a goal of rapid issue resolution to maintain robust and reliable infrastructure.

● **Technical Enablement and Documentation**: Complementing the support teams, this group develops and maintains comprehensive technical resources and documentation, designed to equip customers, sales, and marketing teams with the knowledge they need.

***Solutions Architects***

Our solutions architects collaborate closely with engineering teams to optimize customer infrastructure, with a goal of ensuring it operates at its highest potential. They play a vital role throughout the customer journey—engaging early in pre-sales activities such as proof-of-concept demonstrations and architecture planning, and continuing their support post-sale during implementation, transitions to updated systems, and ongoing deployment management. Their focus is to help customers fully leverage our platform's capabilities and assist with performance tuning to achieve optimal results.

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***Security Commitment***

Security is embedded into every layer of our platform to safeguard system stability, availability, and data confidentiality. We maintain a rigorous, ongoing program to identify and address potential security risks, leveraging automated vulnerability assessments alongside dedicated teams focused on penetration testing, vulnerability management, and securing our applications. Additionally, our Security Operations center provides round-the-clock monitoring of security events, enabling proactive detection and rapid response to threats at any time.

**Owned and Colocation Data Center Infrastructure** 

Our data center strategy leverages both owned facilities and strategic colocation partnerships to deliver GPU infrastructure rapidly and at scale. By utilizing existing colocation facilities, we can deploy HPC servers significantly faster than building purpose-built data centers for each deployment. We work closely with our colocation partners to ensure these facilities meet our high operational and security standards for AI workloads.

Our diversified footprint includes over one MW of colocation capacity across Marietta, Georgia, Kansas City, Missouri, and Philadelphia, Pennsylvania with 150 additional colocation megawatts available across the U.S. This is complemented by legacy blockchain facilities in Watonga, Oklahoma (10MW active, 9 MW available), and Denton, Texas (activating up to 20 MW third quarter of 2026), which we operate under long-term land leases and where we control the site operations. Currently, the power available to us exceeds our computing resources.

All of our HPC facilities utilize designs focused on maximizing performance for AI workloads, with cooling systems engineered for high thermal densities and power delivery architectures that support continuous operation. This combined approach of owned and colocation assets provides operational flexibility, rapid scalability, and the foundation customers need to run demanding AI workloads across multiple regions.

**Tailored Infrastructure Solutions**

![hpc01.jpg](hpc01.jpg)

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At the core of our approach is a commitment to delivering customized and optimally sized infrastructure solutions that align precisely with each customer's unique requirements and budget. Rather than relying on a one-size-fits-all model, we continuously evaluate and integrate the most suitable hardware, networking, and cooling technologies to create cost-effective, high-performance environments specifically engineered for AI workloads.

Our data centers are designed with adaptability and efficiency in mind. We carefully select components and configurations that maximize compute density and operational efficiency without compromising reliability or scalability. By leveraging advanced cooling techniques, including but not limited to liquid cooling systems, we reduce power utilization and our physical footprint, enabling denser compute clusters that can handle power-intensive tasks more efficiently. This holistic design philosophy extends to the physical layout and infrastructure, ensuring each facility is optimized to support the chosen technology stack and customer needs.

Our geographically distributed network of data centers is strategically placed near major hubs to reduce latency and improve access for users. This footprint allows us to offer flexible capacity that can rapidly scale up or down in response to fluctuating demand, supported by high-speed interconnectivity between locations. The agility of this network empowers customers to burst workloads seamlessly across regions, delivering the performance and scalability required for complex AI applications.

Security is an integral part of our infrastructure strategy. We uphold rigorous standards, and a zero-trust framework, to protect data integrity, availability, and privacy. Physical and cyber security protocols are continually refined to address evolving threats, ensuring a resilient and trustworthy platform for our customers.

Beyond physical infrastructure, we invest in innovative software and operational tools that simplify management and maximize resource utilization. This enables customers to focus on their AI workloads without the burden of infrastructure oversight.

As of March 31, 2026, our active power capacity is, in the aggregate, approximately 12 megawatts of grid power with immediate access to more than 40 megawatts of additional grid power across more than six data centers in the United States, with additional expansions underway. This capacity supports both large-scale deployments and modular growth, giving customers the flexibility to scale their infrastructure in line with business objectives.

**Our Customers**

We serve a broad spectrum of organizations—from large AI-driven enterprises to fast-growing venture-backed startups. These include model builders, platform enablers, and businesses embedding AI into their core products or internal systems. A significant portion of our current GPUaaS revenue is generated through customers reached via our largest channel partner, RunPod Inc.

In 2024, our significant hosting clients were Fortitude Mining LLC (formerly Foundry Digital), MegaDM, LLC, and Cerberus Digital, LLC. In 2025, our significant HPC clients were RunPod, Hydra Host, Inc., and Procon Analytics, LLC, and our significant hosting clients were MegaDM 1, LLC (terminated October 2025), Cerberus Digital, LLC, and Fortitude Mining LLC.

Our relationship with RunPod is managed by our wholly owned subsidiary, TCM. We are subject to RunPod's standard terms of service, pursuant to which we may receive service on an ongoing basis, and pursuant to which RunPod may terminate such terms or access to the service at any time without cause upon notice. Revenue is shared on an 80% QumulusAI / 20% RunPod basis under RunPod's standard terms of service. There are no minimum purchase requirements under this arrangement.

Our amended and restated hosting services agreement with Cerberus Digital, LLC, dated April 24, 2024, terminates on August 1, 2026. The agreement may be renewed by Cerberus Digital, LLC for one additional term of two years or terminated upon not less than 60 days' notice to us. The agreement may be terminated by Cerberus Digital, LLC for cause in the event utilization is below 95%. The parties may additionally terminate the agreements for cause or without cause through a writing executed by both parties. The agreement provides that Cerberus Digital, LLC will make a $600,000 equity investment in QumulusAI, which will include 10% warrant coverage.

Our miner hosting agreement with MegaDM 1, LLC was in effect for an initial term of two years from August 30, 2023 to August 30, 2025. The agreement terminated in accordance with its terms when MegaDM 1, LLC provided a notice of non-renewal and contained no minimum purchase requirements.

Our marketplace agreement with Hydra Host, Inc., dated May 9, 2025, provides for an initial term of 12 months and automatically renews on an annual basis unless either party notifies the other of the intention not to renew at least 30 days prior to expiration. Either party may terminate the agreement for cause if the other party terminates its business operations, materially breaches the agreement, or has a default by insolvency. Revenue is shared on a 97% QumulusAI / 3% Hydra Host, Inc. basis. There are no minimum purchase requirements under this agreement.

Our customer agreement with Procon Analytics, LLC, dated May 7, 2025, operates on a month-to-month basis and continues until Procon Analytics, LLC provides 30 days' notice of intent not to renew. Either party may terminate the agreement for cause if the other party terminates its business operations, materially breaches the agreement, or has a default by insolvency. Procon Analytics, LLC pays a monthly service fee for all hours available on the servers used during each monthly term.

Our miner hosting agreements with Fortitude Mining LLC (formerly Foundry Digital), were originally entered into on April 17, 2024 and August 19, 2024, respectively. The April 17, 2024 agreement has an initial term of one year, and the August 19, 2024 agreement has an initial term of two years. The initial term of each agreement may be renewed by Fortitude Mining LLC, and each agreement may be terminated by Fortitude Mining LLC for cause in the event utilization is below 95%. The parties may additionally terminate the agreements for cause or without cause upon providing proper notice. The agreements contain no minimum purchase requirements. The agreements were both amended and restated on February 4, 2026, and all material terms remained the same.

We also continue to serve certain cryptocurrency-focused customers from our legacy digital asset operations. What unites these customers is a need for high-performance infrastructure, fast deployment timelines, and reduced operational complexity.

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Our competitive edge comes from providing highly specialized AI compute infrastructure that is production-ready within an accelerated timeframe. This enables our customers to optimize time-to-value, reduce total cost of ownership, and offload the operational burden of infrastructure management. As a result, our users can focus on building and refining models, serving inference workloads, or innovating their products—rather than worrying about managing GPUs, cooling, and capacity planning.

**Flexible & Tailored Compute Engagements**

We offer a diverse range of usage plans to meet our customers where they are—whether through pay-as-you-go, on-demand, or short reserved terms (one, three, and six months, with one-year and multi-year contracts available when appropriate). The majority of current customer agreements are for terms of three months or less, with customers typically continuing on an on-demand basis after the initial term, paying based on actual infrastructure usage. These options are mostly delivered through our global sales channel partnerships, including platforms like RunPod Inc., Hydra Host, Inc., and Vast.ai Inc. We've intentionally designed this pricing model to optimize flexibility and cost efficiency for a large, distributed customer base while retaining the opportunity to extend commitments as customer workloads mature.

Short-term contractual commitments yield a meaningful revenue premium relative to multi-year agreements. This premium more than offsets the potential downside associated with roll risk and market-based pricing compression over time. Our diversified customer base—comprising thousands of end users with varying and often unpredictable compute demands—enables us to effectively distribute this risk across a broad portfolio. Moreover, the relatively smaller average deployment size per customer allows us to efficiently manage onboarding and offboarding activities with minimal disruption to overall platform utilization, ensuring sustained levels of billable compute capacity. Our model enables customers to spin up compute on their own timelines, experiment with new workloads, and scale quickly—without being locked into rigid, multi-year commitments.

This flexibility is particularly important to small and midsize businesses and emerging AI teams, which often operate under quarterly or discretionary operational expenditure budgets. These customers typically can't justify long-term infrastructure commitments—especially when a project's success is uncertain or when budgeting cycles don't align with multi-year contract obligations.

**Market Behavior: Why Most Customers Avoid Long-Term Commitments**

There is increasing evidence that organizations across industries face significant cloud cost management challenges. Flexera's 2025 State of the Cloud Report found that 84% of organizations cite managing cloud spend as their top challenge, with cloud budgets exceeding limits by an average of 17% (*New Flexera Report Finds that 84% of Organizations Struggle to Manage Cloud Spend*. Flexera. Published 03/19/2025. https://www.flexera.com/about-us/press-center/new-flexera-report-finds-84-percent-of-organizations-struggle-to-manage-cloud-spend). Additionally, organizations continue to waste approximately 27% of cloud spend, driving increased adoption of financial operations teams and managed service providers to regain control over spending (*State of the Cloud Report*. Flexera. Published March 2025. https://info.flexera.com/CM-REPORT-State-of-the-Cloud?lead_source=Organic+Search).

Simultaneously, there's increasing evidence that organizations across industries are deliberately avoiding long-term cloud infrastructure contracts due to budget constraints, operational unpredictability, and concerns about return on investment. Industry benchmarks show that organizations waste approximately 30% of cloud compute spending—highlighting systemic inefficiencies in how cloud resources are provisioned and managed (*How to Identify and Reduce Cloud Waste. ProsperOps*. Updated March 2025. https://www.prosperops.com/blog/how-to-identify-and-prevent-cloud-waste). This underlines the importance of optimizing both usage and rate—particularly when considering the value of long-duration commitment discounts, which can be misaligned with actual workload needs.

These dual pressures—overspending on budgets and underutilizing commitments—are driving teams toward just-in-time infrastructure, autoscaling, serverless, and more dynamic resource management strategies. At the same time, data security concerns add another layer of hesitation, particularly when customers fear their proprietary information could be repurposed by large model-training providers.

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We believe that the following factors play a key role:

● **Project Uncertainty**: Many AI projects begin as experiments, pilots, or proofs of concept. We have found that committing to one- to four-year contracts without clarity on scale or longevity is financially impractical for companies.

● **Budget Structures**: Operational expenditure budgets are often planned on a quarterly basis, especially for startups and midsize companies. Long-term contracts introduce capital expenditure-style friction that clashes with how teams manage cost centers.

● **Overcommitment Risk**: According to a16z, many companies deliberately under commit their cloud spend—often reserving capacity equivalent to only their baseline workloads—to avoid the financial risk of overcommitting. This typically results in committed spend being approximately 20% lower than actual usage, with some companies reporting an additional spending of up to two times their committed spend. This suggests some firms prefer to maintain flexibility through elastic, short-term resources (*The Cost of Cloud, a Trillion Dollar Paradox*. Andreessen Horowitz. Published 03/27/2021. https://a16z.com/the-cost-of-cloud-a-trillion-dollar-paradox).

**Designed for Agility and Growth**

Our pricing structure and platform architecture reflect a deep understanding of these customer realities. By prioritizing short terms, dynamic scaling options, and modular pricing, we align directly with the way modern organizations adopt and consume compute. This model empowers both large and small teams to move faster, make smarter infrastructure decisions, and extract more value from their AI initiatives—while maintaining financial and operational agility.

**Go-to-Market Strategy**

***Overview***

Our go-to-market organization consists of sales, marketing, partnerships, and customer experience teams operating as a lean, disciplined organization with a clear vision of AI market trajectory, ideal customer profiles, and growth drivers. This approach enables us to maintain operational agility while executing an effective multi-channel distribution strategy that has established brand recognition within an industry historically dominated by large-scale competitors. Our go-to-market strategy has evolved to address the diverse needs of AI workloads through three complementary channels: Provider Partners, Developer Partners, and direct offerings. This channel segmentation enables us to serve customers across the entire AI development lifecycle—from initial experimentation to production-scale deployment—while maintaining operational efficiency and preventing channel conflicts.

***Multi-Channel Distribution Strategy***

*Provider Partners:*

Our Provider Partners consist of strategic relationships with leading GPU marketplaces and brokers, including RunPod Inc., Cudo Compute, Hydra Host, Inc., and Vast.ai Inc. Under these arrangements, the partner manages orchestration, customer acquisition, and billing for workloads running on QumulusAI infrastructure, and we receive a contracted share of the revenue generated from those workloads. These agreements are generally structured under standard service terms, with most customer usage occurring on short-term or on-demand commitments. Our services reach over 10,000 end customers via our Provider Partners. We believe these partnerships position QumulusAI as a trusted infrastructure provider powering premium marketplace offerings while generating higher per-GPU revenue compared to traditional long-term agreements.

*Preferred Provider Program:* 

QumulusAI is developing a Preferred Provider Program designed to offer enhanced partnerships for select Provider Partners who engage more deeply with our platform. Under the proposed program, Preferred Provider Partners could receive priority access to new GPU models, inclusion in hardware roadmap discussions, dedicated infrastructure allocations, and co-marketing opportunities. In return, participating partners could commit to structured contract terms (such as minimum utilization thresholds and margin-sharing arrangements), creating mutually beneficial relationships intended to maximize utilization. While we are actively pursuing this strategy, we have not yet entered into Preferred Provider Program agreements with any partners.

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*Developer Partner Program:*

Our Developer Partner Program targets AI consultancies and machine learning operations platforms that build solutions on QumulusAI infrastructure. These partners co-market and sell QumulusAI HPC cloud infrastructure alongside their custom solutions to their clients, providing us with consistent capacity utilization and market validation.

Developer Partners receive joint marketing opportunities, dedicated infrastructure allocations with guaranteed capacity, priority technical support, product roadmap influence, and custom service-level agreement development. This program creates deep technical partnerships that extend beyond transactional relationships to strategic technical collaboration, while helping us maintain optimal resource utilization across our platform ecosystem.

**Competition**

The AI infrastructure market is experiencing rapid evolution and complexity, with a wide range of providers vying to serve various customer segments. While hyperscalers like AWS, Azure, Google Cloud, IBM, and Oracle dominate with vast, general-purpose clouds, their offerings are not easily sized or customized to all customer needs when it comes to purpose-built AI platforms. In many cases, the same customers of the hyperscalers buy compute through our sales channel partners to fill gaps in their own AI portfolios—highlighting our distinct value proposition in delivering dedicated, AI-optimized infrastructure for demanding workloads.

***Not Just Hyperscalers***—***Neocloud Competitors Too***

The rise and success of AI-native clouds such as CoreWeave (Nasdaq: CRWV) and Lambda Labs further underscores the competitive intensity. These companies compete aggressively for large-scale, GPU-intensive workloads, but are more directly competing with the hyperscalers than the customer segments that we are pursuing.

***Our Distinctive Position***

We serve an entirely different set of needs and customers:

● We specialize in meeting demands from a single GPU to clusters of tens to hundreds of nodes at most, not the mega-fleets of thousands.

● In addition to optimized and shared GPU access, our platform delivers true bare-metal access as well, latest-gen GPUs, high-bandwidth storage, and ultra-low-latency networks in an integrated stack.

● We include access to behind-the-meter power generation, tiered reliability, and off-grid resiliency that provide greater cost savings and consistent service—features seldom offered by hyperscalers or even Neocloud peers.

● Our team works closely with each customer to custom-design and optimize infrastructure, rather than offering only one-size-fits-all compute pools.

***Why Customers Choose Us***

We stand apart thanks to a blend of operational excellence and customer-centric design:

● **Performance & Reliability**: Our HPC infrastructure is proven at scale, engineered for high-density AI workloads.

● **Efficiency & Cost Control**: With integrated power generation and transparent pricing, our infrastructure delivers competitive total cost of ownership.

● **Rapid Access to Hardware**: Early deployment of cutting-edge GPUs ensures customers stay ahead in training and inference.

● **Automation & Health Resilience**: We reduce operational overhead with proactive monitoring, remediation, and managed infrastructure services.

● **Security & Compliance**: Enterprise-grade safeguards are embedded throughout our stack.

● **Customization & Support**: We tailor solutions—whether optimizing storage or fine-tuning GPU configurations—and back them up with personalized customer service.

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● **Focused Customer Experience**: Our direct-sales model emphasizes flexibility in contract duration (three to 36 months or simple pay-as-you-go OnDemand), and our support teams partner closely with engineers, with a goal of ensuring agile deployment and scale.

***Competing Where It Matters***

Where hyperscalers sell broad compute platforms and neoclouds like CoreWeave and Lambda chase massive-scale use cases, we excel at serving teams that require precision-engineered AI infrastructure, close collaboration, and fast turnaround—whether deploying in the hundreds of teraflops or scaling out new model trials. With our integrated stack—HPC cloud, AI-first data centers, and behind-the-meter power—our value proposition is built from the ground up for AI innovation

**Key Performance Factors**

QumulusAI's growth is driven by a combination of strategic, technical, and operational advantages that enable the company to scale rapidly, serve compute-intensive workloads, and deliver differentiated value in the AI infrastructure market.

***Speed of Deployment***

With a modular and standardized deployment approach, QumulusAI can bring new GPU infrastructure online within three months—significantly faster than traditional cloud or colocation providers. This agility allows the company to respond quickly to surging AI demand and customer-specific capacity needs.

***Infrastructure Control and Integration***

By owning and operating key layers of the stack—from energy procurement to data center operations and HPC orchestration—QumulusAI reduces external dependencies, enhances reliability, and maintains tighter cost control. This vertically integrated model supports long-term scalability and margin efficiency.

***Energy Strategy and Operational Efficiency***

QumulusAI's infrastructure is designed for high target power efficiency and supported by a mix of owned and contracted power resources, including behind-the-meter natural gas infrastructure. This strategy mitigates energy market volatility and ensures stable operating economics at scale.

***High-Performance Compute Options***

***Dual Go-to-Market Strategy***

QumulusAI combines marketplace reach with enterprise intimacy. Channel partners like RunPod drive high-volume utilization through orchestration layers, while a direct sales team supports technically advanced clients via a self-service portal and collaborative deployment planning.

***Customer Alignment and Pricing Transparency***

With clear pricing, term-based discounts, and white-glove support, QumulusAI offers a compelling alternative to legacy cloud providers. This customer-centric model supports longer contract durations, customer retention, recurring revenue, and improved forecasting visibility.

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**Intellectual Property**

Intellectual property ("IP") remains a critical pillar of our business, underpinning our ability to sustain a competitive advantage in the rapidly evolving AI landscape. However, protecting software-level innovations and process-oriented IP presents inherent complexities. Unlike tangible assets, software and methodologies are often difficult to safeguard through traditional patent frameworks due to their intangible, dynamic, and iterative nature. Additionally, the fast-paced development cycles and the open collaboration culture within the AI ecosystem mean that maintaining exclusive control over all facets of innovation is both impractical and inefficient for any single organization.

Recognizing these realities, we adopt a strategic approach to intellectual property that emphasizes collaboration and integration. Instead of attempting to internally develop and protect every innovation, we actively seek partnerships and licensing agreements with best-in-class technology providers. This enables us to leverage proven advancements while minimizing the risks associated with developing proprietary solutions in isolation. Furthermore, we pursue targeted acquisitions of entities that bring authentic innovations to the AI domain, strengthening our portfolio and accelerating our market impact.

To safeguard the IP that is fundamental to our operations, we enforce rigorous confidentiality and proprietary rights protocols. We control access to sensitive information through comprehensive internal and external safeguards, including confidentiality agreements, licensing arrangements, and intellectual property assignment contracts with employees, contractors, and partners. While these legal and procedural measures provide essential protection, we acknowledge that IP rights, particularly in software and process domains, are susceptible to challenges, circumvention, and unauthorized use.

Our philosophy embraces these challenges by fostering a flexible, partnership-driven IP ecosystem that balances protection with agility—ensuring we remain at the forefront of innovation without compromising operational efficiency.

***Trademarks***

We have filed to register the trademarks "QumulusAI" and "Qumulus." These applications are pending with the United States Patent and Trademark Office.

***Licenses***

In addition, we have entered into a license agreement with hosted.ai to provide software that manages GPU resource allocation, scheduling, scaling, and access across multiple users, applications, and workloads. The license has an initial two-year term with fees that scale based on the number of GPUs deployed on the hosted.ai platform. Under the agreement, fees begin at $10,000 per month for up to 64 NVIDIA B200 level GPUs and increase in tiers up to $168,000 per month if 256 or more NVIDIA B200 level GPUs are deployed, or after 12 months from the effective date, whichever occurs first. If the 256-unit threshold is reached earlier than 12 months, the $168,000 monthly fee applies immediately and continues through the end of the initial two-year term. Renewal fees are based on the number of GPUs on the system but are capped at no more than double the maximum fee from the prior term in any one-year renewal period.

**Government Regulation and Compliance Landscape** 

As a company operating at the intersection of advanced infrastructure and next-generation technologies, QumulusAI is subject to a broad and evolving array of global laws and regulatory frameworks. These govern key areas of our business—including AI, digital infrastructure, and crypto-enabled services—and span domains such as intellectual property, taxation, import/export controls, anti-corruption statutes, economic sanctions, national security regulations, data privacy, consumer protection, labor law, and environmental standards.

Our operations and the delivery of infrastructure and services across borders are increasingly influenced by regulatory scrutiny, particularly in sectors like AI, high-performance computing, and digital asset infrastructure. For example, regulatory frameworks such as the U.S. Export Administration Regulations ("EAR") and evolving guidelines under the Foreign Investment Risk Review Modernization Act ("FIRRMA") impact the flow of sensitive technologies, including compute-intensive hardware and services, across international borders. The recent expansion of the U.S. Department of Commerce's Entity List and increased scrutiny by the Committee on Foreign Investment in the United States ("CFIUS") reflect a broader geopolitical shift that could affect our ability to engage with certain international customers, partners, or suppliers.

Similarly, global data governance is undergoing a rapid transformation. Regional privacy frameworks such as the California Consumer Privacy Act ("CCPA"), the European Union's General Data Protection Regulation ("GDPR"), and China's Personal Information Protection Law ("PIPL") impose complex compliance requirements on companies that process personal data across jurisdictions. These rules increasingly intersect with AI ethics and algorithmic accountability policies, which may become more prescriptive over time. A growing number of jurisdictions—such as the EU through its AI Act—are moving toward enforceable, risk-based regulatory models that could materially shape how AI-powered infrastructure must be developed, deployed, and governed.

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To date, the costs of compliance with these regulatory regimes have not had a material impact on our capital expenditures or operating results. However, the pace and unpredictability of regulatory change—particularly in trade policy, AI governance, and cross-border technology transfer—introduce potential risks to our global competitiveness. While we do not currently anticipate significant near-term expenditures directly tied to compliance obligations, we continue to monitor regulatory developments closely. In particular, we recognize that future regulatory shifts—especially in export controls, sanctions policy, or national security reviews—could materially affect our access to markets or critical partnerships.

As such, we maintain robust internal controls, conduct regular regulatory reviews, and engage with external counsel and trade compliance advisors to proactively manage risk. Our governance practices are designed to ensure alignment with applicable laws and evolving best practices across the jurisdictions where we operate.

For more detailed discussion of regulatory risks, refer to the Risk Factors titled:

● *"We are subject to laws and regulations, including governmental export and import controls, sanctions, and anti-corruption laws, that could impair our ability to compete in our markets and subject us to liability if we are not in full compliance with applicable laws*,"

● *"We are subject to laws, regulations, and industry requirements related to data privacy, data protection and information security, and user protection across different markets where we conduct our business and such laws, regulations, and industry requirements are constantly evolving and changing. Any actual or perceived failure to comply with such laws, regulations, and industry requirements, or our privacy policies, could harm our business*," and

● *"Our business is subject to a wide range of laws and regulations, and our failure to comply with those laws and regulations could harm our business*."

**Human Capital Management**

Our mission is to break AI's biggest barriers—the infrastructure constraints, cost limitations, and complexity challenges that prevent organizations from pushing the boundaries of what's possible with artificial intelligence. We deliver flexible, cost-efficient HPC cloud infrastructure that enables breakthrough AI outcomes. This mission is guided by our operating principle: C.L.O.U.D. —Challenge Limits of Understanding Directly.

We challenge the limits of understanding both through the technology we build and through our company culture, where we break down communication barriers and challenge assumptions with directness born of genuine care.

We believe the most powerful AI breakthroughs emerge when rigorous technical infrastructure combines with an environment where people communicate honestly to ensure the best ideas prevail regardless of hierarchy.

We embrace core principles that embody C.L.O.U.D. in our daily actions:

● **Challenge Assumptions**: We question conventional thinking and push boundaries, believing that intellectual rigor and healthy debate lead to better solutions. Every idea can be improved through thoughtful challenge.

● **Learn with Urgency**: We move fast while staying rigorous, acknowledging what we don't know and rapidly iterating based on client feedback and market demands. Speed and precision drive breakthrough solutions.

● **Operate with Directness**: We communicate candidly because we care. Clear, honest feedback—delivered with respect—breaks down internal barriers and helps us all improve faster.

● **Unite Around Excellence**: We hold ourselves and each other to exceptional standards. Diverse perspectives combined with shared commitment to quality creates our competitive edge.

● **Deliver Impact**: We measure success by the barriers we help clients overcome. Our infrastructure empowers others to achieve AI breakthroughs they couldn't reach before, and we take that responsibility seriously.

As of April 30, 2026, our global workforce numbers 25 full time-employees along with a 12-member advisory team that contributes on a volunteer basis. We strive to maintain competitive compensation and cultivate a strong culture that differentiates us in the industry and drives sustained business success.

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**Sustainability**

AI continues to accelerate innovation across nearly every sector—but its infrastructure demands are immense and growing. As we scale to meet this demand, we believe long-term resilience requires a sustainability strategy grounded not only in environmental stewardship, but also in infrastructure stability, energy efficiency, and risk mitigation. Our goal is to ensure our platform remains dependable, cost-effective, and responsibly operated over time, even as energy markets tighten and usage intensifies.

Our sustainability strategy is built around five pillars: Electricity Pricing Certainty, Energy Efficiency, Resource Responsibility, Sustainable Supply Chain Engagement, and ESG.

***Electricity Pricing Certainty***

A critical and often overlooked pillar of long-term infrastructure sustainability is energy price stability and power reliability. Unlike many cloud providers that rely entirely on grid-delivered power, we are actively pursuing access to behind-the-meter and alternative energy strategies—including the co-location of our HPC infrastructure with facilities capable of generating power directly, such as through natural gas-fired plants with the ability to lock in long-term fuel supply contracts.

This strategy is intended to help reduce our exposure to volatile electricity markets, support pricing predictability for customers, and enable us to design systems with greater redundancy and uptime assurance. For new site builds, we plan to pair HPC data centers with equivalent-capacity bitcoin mining and hosting facilities, allowing us to generate revenue from idle backup power while maintaining readiness to meet peak HPC demand.

According to BloombergNEF, AI and cryptocurrency datacenters may drive U.S. power demand "will more than double by 2035." (BloombergNEF*, Power for AI: Easier Said Than Built.* Published 04/15/25. https://about.bnef.com/insights/commodities/power-for-ai-easier-said-than-built/.) Meanwhile, The Wall Street Journal reports widespread tension between surging data-center power needs and power-grid capacity limits (The Wall Street Journal, '*Three New York Cities*' *Worth of Power: AI Is Stressing the Grid*, Published 09/28/2024.).

Unlike many hyperscale operators, we are not constrained to a one-to-one relationship between physical GPUs and customer workloads. Through our license agreement with hosted.ai, we can virtualize and allocate GPU resources across multiple users and applications. This allows us to deliver higher utilization from the same capital base and power footprint—meaning the incremental demand we place on the grid is materially lower than if each customer required dedicated hardware. In effect, we are decoupling growth in customer adoption from equivalent growth in electricity consumption, enabling a more efficient scaling model than is often assumed in public discussions about AI infrastructure demand.

By proactively pursuing power autonomy and long-term pricing contracts, we're building infrastructure that not only supports environmental goals, but also shields our platform and customers from rising energy costs and supply chain risks—creating a more resilient foundation for AI innovation.

***Energy Efficiency***

Efficiency remains a core tenet of our infrastructure strategy. As AI model sizes continue to grow, the power density of modern compute hardware requires smarter approaches to cooling, hardware utilization, and data center design. We are investing in new technologies and best practices—from liquid cooling systems to intelligent workload orchestration—to maximize the performance-per-watt of our deployments.

Our goal is to drive meaningful reductions in energy waste across the compute stack, and to improve metrics like Power Usage Effectiveness over time, while maintaining the elasticity and performance our customers expect.

***Resource Responsibility***

Beyond power, we take a broader view of responsible resource use. This includes the efficient use of water in cooling systems, responsible e-waste management, and exploring the feasibility of heat reuse strategies that can redirect thermal output into secondary applications, such as district heating or industrial processes.

Where feasible, we will seek out partners and vendors who share our commitment to minimizing the environmental footprint of supporting next-generation compute.

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***Sustainable Supply Chain Engagement***

Our infrastructure relies on a vast network of vendors, partners, and providers. As we grow, we are embedding sustainability into our supplier evaluation framework—encouraging transparency around energy sourcing, carbon intensity, and environmental performance.

This ensures we're not only building a sustainable platform for ourselves, but also reinforcing better practices across the broader ecosystem to which we belong.

***ESG***

We believe strong governance is essential to delivering on any sustainability ambition. We are taking steps to incorporate ESG risk management into our enterprise strategy, with clear ownership from internal sustainability leaders and oversight at the Board level. This includes identifying material environmental risks, aligning with reporting standards as we scale, and continuously refining our goals to reflect both business needs and global sustainability priorities.

**Properties**

QumulusAI is headquartered in Marietta, Georgia. Here, we operate more than 1,120 GPUs across three colocation data centers in Marietta, Georgia, Kansas City, Missouri, and Philadelphia, Pennsylvania. We have secured rights of first refusal for 30 MW of IT load capacity space for our GPU equipment and we are actively planning for expansion exceeding 120 MW of total IT load across our platform with potential to support over 90,000 NVIDIA B200/B300 GPUs (among the latest generation GPUs purpose-built for foundation model training), or as many as 1,500,000 GPUs optimized for AI inference at scale. In support of our strategic holdover business, which includes managed crypto infrastructure operations, we also maintain long-term land lease agreements in Watonga, Oklahoma and Denton, Texas. These sites serve as foundational assets for power-intensive compute deployments and provide strategic flexibility for future infrastructure repurposing.

**Legal Proceedings**

From time to time, we may become involved in legal or regulatory proceedings as part of the ordinary course of our business operations. At present, we are not a party to any litigation that, in management's opinion, is likely to result in a material adverse impact on our business, financial condition, cash flows, or operating results, either individually or in the aggregate. However, we may, in the future, be subject to claims from third parties, including allegations of intellectual property infringement or other legal challenges. Responding to and defending against such matters can be both time-consuming and costly, placing demands on management resources and personnel. Moreover, while we aim to defend our interests vigorously, interim rulings may not always be favorable, and there can be no guarantee of a positive outcome in any given proceeding.

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**MANAGEMENT**

**Executive Officers and Directors**

The following table provides information regarding our executive officers and directors as of April 30, 2026:

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| | | |
|:---|:---|:---|
| **Name**  | **Age**  | **Position(s)**  |
| Michael Maniscalco  | 46  | Chief Executive Officer, Chairman  |
| Scott Krosnowski  | 54  | Chief Financial Officer  |
| Ankur Chatterjee  | 46  | Chief Integration Officer  |
| Ryan DiRocco  | 45  | Chief Technology Officer  |
| Steve Gertz  | 51  | Chief Growth Officer  |
| Stephen Hunton  | 46  | Chief Marketing Officer  |
| Homaira Akbari<sup>(1)(3)</sup> | 65 | Director |
| Patrick Gahan  | 46  | SVP, Capital Markets, Director  |
| Stacy Kenworthy<sup>(1)(2)</sup>  | 59  | Lead Independent Director  |
| Michael Mulica<sup>(1)(2)(3)</sup>  | 63  | Director  |
| David Rench<sup>(1)(2)(3)</sup>  | 48  | Director  |
| Barry Schwartz<sup>(2)(3)</sup>  | 50  | Director  |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Member of the Audit Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Member of the Compensation Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Member of the Nominating and Corporate Governance Committee.

***Michael Maniscalco*** has served as our Chief Executive Officer and a member of our Board since September 2025, bringing a rare fusion of operational excellence and relevant AI infrastructure expertise. Previously, in August 2025, he served as a member of our Advisory Board. As the former Chief Technology Officer of Applied Digital Corporation (NASDAQ: APLD), a digital infrastructure innovator, a role he served in from July 2023 to January 2025, Mr. Maniscalco drove significant revenue growth over consecutive quarters and year-over-year, while transitioning the company's focus from blockchain data center development and operations to HPC data centers and GPUaaS. He played a key role in securing major customer contracts and oversaw the deployment of cutting-edge facilities to meet surging AI compute demands. These efforts led to a strategic expansion into high-growth AI verticals, including the rapid development of a large-scale GPU cloud business and the successful closing of multi-billion-dollar data center contracts for AI factories. Before his role as Chief Technology Officer, Mr. Maniscalco was a consultant, followed by EVP of Technology at Applied Digital beginning in September 2021. Starting in February 2018 and running concurrently with his other professional appointments, Mr. Maniscalco has served as president of Pytheas Enterprises, a strategic consulting and fractional CXO services firm focusing on technology, product, AI, and innovation. Mr. Maniscalco has founded and exited multiple ventures including those in chronic disease management, Internet of Things ("IoT") and remote systems management, and intelligent building systems. His prior product experience includes launching several award-winning software solutions. Additional roles include entrepreneur-in-residence at StanleyX, product development, and engineering leadership positions spanning the AI, IoT, smart home, blockchain, and healthcare spaces. He holds a B.S. in Computer Science from Georgia Tech, is an emerging early-stage technology investor, keynote speaker, and actively mentors startups through programs that include TechStars and FAU Tech Runway. We believe Mr. Maniscalco is qualified to serve on our Board due to his proven ability to execute in high-growth technology markets, expertise and track record in AI infrastructure and high-performance computing, and history of driving shareholder value at both public and private companies.

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***Scott Krosnowski*** has served as our Chief Financial Officer since February 2025 and brings over 25 years of financial leadership to QumulusAI. In this role, he is responsible for overseeing the company's financial operations, including strategic financial planning, risk management, and capital allocation, ensuring alignment with QumulusAI's mission to deliver cutting-edge AI-driven computing solutions. Previously, from October 2023 to February 2025, Mr. Krosnowski served as Senior Vice President, Finance, of private equity-backed go-to-market advisory firm, SBI Growth Advisory (Sales Benchmark Index, Inc.), where he supported M&A growth strategies and had oversight of all financial management functions. From May 2022 to October 2023, Mr. Krosnowski served as Chief Financial Officer of WAHA Technologies, Inc., a subsidiary of QumulusAI, and from January 2016 to May 2022, he served as Chief Financial Officer of Arch Amenities Group (WTS International, Inc.), global leisure management and consulting firm, where as a minority owner and Chief Financial Officer, he helped grow and sell the firm as a platform company in 2019. Mr. Krosnowski stayed on as Chief Financial Officer and led infrastructure restructuring while supporting organic and M&A rapid growth from 100 locations to over 300 locations in less than 2.5 years. He also served as a member of our Board from September 2022 to August 2025. Mr. Krosnowski received his B.S.B.A. from American University.

***Ankur Chatterjee*** has served as our Chief Integration Officer since April 2023 and leads our HPC strategy and operations. Mr. Chatterjee plays a pivotal role in architecting and executing the company's compute and data center initiatives, including the deployment and management of GPU-intensive environments that underpin our AI infrastructure-as-a-service offerings. His leadership is central to QumulusAI's ability to deliver scalable, low-latency, high-throughput systems that support our most demanding artificial intelligence workloads. Mr. Chatterjee brings over two decades of experience in technology infrastructure, systems integration, and operational leadership. Prior to joining QumulusAI, he held significant positions in the technology sector over more than 20 years, including serving as the President at StayOnline, LLC, a provider of scalable power connectivity and distribution solutions to the data center and enterprise IT sectors, where he spearheaded the development of scalable power path solutions, from April 2021 to April 2023. His career spans multiple ventures across private equity, cloud infrastructure, and edge computing, where he consistently focused on enabling growth through innovation in high-performance, distributed systems. Mr. Chatterjee received his B.S. in Management with a Minor in Information Systems from the Georgia Institute of Technology.

***Ryan DiRocco*** has served as our Chief Technology Officer since September 2025. He is a seasoned technology executive previously serving as Chief Technology Officer at Performive, LLC, a leading VMware-focused managed multicloud provider, from June 2007 to October 2024. With over 20 years of expertise in IT, virtualization, enterprise networking, and managed services, he has built and guided high-performing engineering teams to ensure robust, global infrastructure operations. In his role, Mr. DiRocco oversees the strategic direction of QumulusAI's technical stack, aligning product development with customer-centric needs while optimizing performance, security, and operational efficiency. He is instrumental in steering the company's AI initiatives, helping clients transition toward models with minimal disruption and maximum return on investment.

***Steve Gertz*** has served as our Chief Growth Officer since December 2025 and previously served as the Chairman of our Board from February 2025 to February 2026. He has served as the founder of Rhythmic Ventures, a growth acceleration firm with a portfolio of high performing companies, since February 2017. He was also a co-founder of 11\|TEN Innovation Partners, a healthcare focused ecosystem and strategy consulting firm, from January 2017 to April 2024. With over 25 years of experience, he has built high-impact partnerships across private equity, venture-backed companies, and large enterprises. From January 2007 to February 2017, he was Partner with Joe Gibbs at Joe Gibbs Driven Investors, Inc., the investment arm of the NFL Hall of Fame coach and NASCAR team owner, where he led a portfolio of high-growth investments. Mr. Gertz invested early in QumulusAI, secured additional strategic capital, sourced key talent, and fostered a diverse customer ecosystem. We believe Mr. Gertz is qualified to serve on our Board of Directors because he drives strategic vision by attracting key executive leadership, curating growth capital, and attracting a diverse mix of customers.

***Stephen Hunton*** has served as our Chief Marketing Officer since September 2025, bringing over 20 years of integrated marketing leadership experience enabling Fortune 500 brands like Visa, ServiceNow, IBM, Google, and YouTube to engage prospects across digital channels. Prior to his role as Chief Marketing Officer, Stephen joined QumulusAI's advisory board in October of 2024. From September 2017 to March 2023, he served as Vice President of Global Social & Content Experience of IBM, a technology corporation, leading a team of over 50 professionals responsible for digital engagement, thought leadership content, and building operating models that created millions of customer touch-points annually. He built IBM's centralized social advocacy and influencer relations capabilities and co-created content with top tech analysts for one of the most followed business-to-business tech brands globally, demonstrating his passion for driving business outcomes through digital marketing. Prior to IBM, from June 2012 to September 2017, Mr. Hunton served as Senior Vice President & Partner at FleishmanHillard Inc., a public relations and marketing agency, building global innovation capabilities and driving strategic development for iconic brands. Mr. Hunton's expertise spans executive leadership, integrated marketing, content strategy, and organizational transformation, with a proven track record of implementing scalable marketing operations that fuel growth and optimize performance across global markets. Mr. Hunton received his BA in Communications from the University of Arkansas.

***Homaira Akbari*** has served as a member of our Board since February 2026. Dr. Akbari is currently the President and Chief Executive Officer of AKnowledge Partners, LLC, a global advisory firm providing high-impact consultative strategies and advice to Fortune 1000 companies and private equity firms in the sectors of The Internet of Things, cybersecurity, artificial intelligence, and energy transition, a role she has served in since 2013. From 2007 to 2012, Dr. Akbari was the President and Chief Executive Officer of SkyBitz, Inc., a leading provider of remote asset tracking and security solutions specializing in real-time decision-making tools for companies with unpowered assets such as truck trailing equipment, intermodal containers and rail cars. Prior to her service with SkyBitz, Dr. Akbari held executive positions at Microsoft Corporation, Thales Group, TruePosition, Inc., a subsidiary of Liberty Media Corporation, and Cambridge Strategic Management Group (CSMG). Dr. Akbari holds a Ph.D. in particle physics from Tufts University and is presently a member of the Business Board of Advisors for Carnegie Mellon University. Dr. Akbari also serves on the board of directors of Banco Santander, S.A. (NYSE: SAN), Landstar System (Nasdaq: LSTR), and Babcock & Wilcox Enterprises, Inc. (NYSE: BW). Dr. Akbari also has served since 2020 on the Board of Directors of Santander Consumer USA Holdings Inc., formerly a NYSE listed company until January 2022. Dr. Akbari formerly served on the board of directors of (i) Temenos AG, a company incorporated in Switzerland and listed on the SIX Swiss Exchange, from May 2020 to May 2023, (ii) GEMALTO N.V., a company incorporated in the Netherlands and formerly listed on the Euronext Amsterdam and Euronext Paris, from 2013 to 2019, and (iii) Veolia S.A., a company incorporated in France and listed on the Euronext Paris, from 2015 to 2019. Dr. Akbari has extensive business and operational experience, with an emphasis on the use of technology within many different sectors, including the transportation and logistics, industrial, energy, financial services, and technology sectors. She has a deep knowledge of cybersecurity and has authored The Cyber Savvy Boardroom. We believe Dr. Akbari's experience leading AKnowledge Partners and as the former Chief Executive Officer of SkyBitz provides important technological, cybersecurity, business, and operational expertise to the Board.

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***Patrick Gahan*** has served as a member of our Board since January 2021 and as our Senior Vice President, Capital Markets since September 2025. From April 2025 to August 2025, Mr. Gahan served as our Interim Chief Executive Officer. Mr. Gahan is a seasoned executive with extensive experience supporting the U.S. Department of Defense through leadership roles in government consulting, defense contracting, and entrepreneurial ventures at the intersection of technology and national security. Mr. Gahan began his career at Booz Allen Hamilton, a management consulting firm, from January 2002 to September 2003, where he provided strategic consulting services to Department of Defense clients. He then joined Lockheed Martin Corporation, an aerospace and defense company, where from October 2003 to March 2004 he held leadership roles focused on advanced defense technologies, surveillance systems, and classified program management. In March 2004, Mr. Gahan co-founded Seismic LLC, a technology and analytics company providing real-time situational awareness and mission-critical solutions to defense customers. In 2009, Seismic was acquired by Applied Signal Technology, which was later acquired by Raytheon (now RTX Corporation). In 2012, Mr. Gahan founded Alder Capital Partners, a private equity firm, where he has over a decade of experience managing limited partner capital, evaluating investments, and overseeing portfolio company growth. Through Alder Capital Partners, Mr. Gahan has developed deep expertise in capital allocation, strategic financing, and corporate governance. Mr. Gahan is recognized for building and leading high-performing teams across technology, defense, and financial services. He received a B.S. in Computer Science from The Johns Hopkins University and an M.B.A. from the Robert H. Smith School of Business. We believe Mr. Gahan is qualified to serve on our Board due to his extensive executive leadership experience, capital markets and private equity expertise, and proven ability to scale technology-driven businesses while maintaining strong governance practices.

***Stacy Kenworthy*** has served as a member of our Board since January 2021. He also serves as our Lead Independent Director. Mr. Kenworthy has served as the Founder and Chairman of Asylum Ventures, a venture firm, since June 2021. At Asylum Ventures, he has established a significant presence in the finance and investment sectors. With over 30 years of experience in finance and technology, he has held various senior management positions, demonstrating expertise in these fields. In addition to his role at Asylum Ventures, Mr. Kenworthy is also recognized for his leadership at Motus Nova, Inc. a neurorehabilitation robotics company, where he has served as Chairman since October 2013. Throughout his career, he has founded and served as Chief Executive Officer of multiple technology companies starting in 1995, with strategic involvement at the chip level in data processing unit and GPU design and technology. His professional background includes a strong foundation in finance and accounting, and he maintains an extensive IP portfolio with numerous patents in hardware acceleration, system integration, and data-centric computing solutions. Mr. Kenworthy received his MBA from Emory University and an undergraduate degree in accounting from Georgia State University. We believe Mr. Kenworthy is qualified to serve on our Board because of his extensive experience and leadership in both finance and technology-driven businesses, particularly his deep expertise in next-generation computing architectures and innovation in hardware acceleration technologies.

***Michael Mulica*** has served as a member of our Board since September 2025. His experience includes serving as an executive and board member in both private and public companies, including the board of directors of Sonim Technologies, now DNA-X, Inc. (Nasdaq: DNAX), since April 2021, where he became Chairman in November 2023. With three decades of experience scaling companies in communications, internet platforms, and the application layer, his leadership spans executive roles at Phone.com / Openwave Systems, Inc. (Nasdaq: PHCM/OPWV), where he served as Senior Vice President from September 1999 to December 2003; BridgePort Networks, where he served as Chief Executive Officer from December 2003 to August 2007; FusionOne / Synchronoss Technologies (Nasdaq: SNCR), where he served as Chief Executive Officer and President from August 2007 to July 2011; Openwave / Unwired Planet (Nasdaq: UPIP), where he served as Chief Executive Officer from October 2011 to June 2014; RealNetworks, Inc. (Nasdaq: RNWK), where he served as President from June 2014 to May 2016; Actility, where he served as Chief Executive Officer from May 2016 to August 2018; and AlefEdge, where he served as Executive Chairman and Chief Executive Officer from March 2018 to June 2024. Mr. Mulica has also advised growth-stage companies through Programmatic Coaching since 2005 and has served as an Operating Partner at Avataar Venture Partners (Avataar Capital Management Ltd.) since 2019. Mr. Mulica earned his MBA from the Kellogg School of Management at Northwestern University and his B.S. in Finance from Marquette University. We believe Mr. Mulica is qualified to serve on our Board because of his extensive platform experience and the strategic vision he has demonstrated through his active role in building out the Internet, mobile, and cloud platforms, as well as their convergence into a global industrial platform. He has a proven track record of investing in AI technology companies and experience leading organizations through rapid periods of industry transformation. Now, Mr. Mulica sees his role at QumulusAI as helping to guide the next generation of infrastructure buildout that will shape the future of artificial intelligence.

***David Rench*** has served as a member of our board since September 2025. He has served as the Chief Financial Officer of Base Electron, an independent power producer and energy services platform, since March 2025. He served as the Chief Financial Officer of Applied Digital Corporation (Nasdaq: APLD), a digital infrastructure innovator, from March 2021 through October 2024. In this role, he oversaw the company's financial strategy during a period of significant growth and transformation in the digital infrastructure sector. He then served as Chief Administration Officer until February 2025 and as an advisor to the company through 2025. Prior to joining Applied Digital, Mr. Rench co-founded Ihiji, a software startup company, in 2010 and served as its Vice President of Finance and Operations until its acquisition by Control4 in 2017. Following the acquisition, he served as Chief Financial Officer of Hirzel Capital, an investment management company, from 2017 to 2020. Mr. Rench holds a B.B.A. from the Neeley School of Business at Texas Christian University and an M.B.A. from the Cox School of Business at Southern Methodist University. We believe he is qualified to serve on our Board due to his significant expertise in financial leadership, long-term growth planning, and operational efficiency, with deep experience across accounting, budgeting, financial analysis, and IT strategy.

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***Barry Schwartz*** has served as a member of our Board since September 2025, having previously served on our Board of Advisors from March 2025 until his appointment to our Board. Mr. Schwartz is a career entrepreneur and business leader, with a focus at the intersection of risk, compliance, and technology. In 2002, he co-founded ACA Group, formerly ACA Compliance Group, one of the largest governance, risk and compliance practices in the financial services industry. Serving on the Management Committee, he led the company through a series of private equity-sponsored transactions and multiple acquisitions of competing and complimentary enterprises. In addition to advising many of the largest institutional and alternative investment managers, Mr. Schwartz launched ACA's key initiatives in regulatory technology, outsourced managed services, and comprehensive solutions for broker-dealers and commodity pool operators/commodity trading advisors. Before co-founding ACA, Mr. Schwartz served in Washington at the U.S. Securities and Exchange Commission – Division of Examinations, where he was awarded the SEC's Examination Award of Excellence. He has been quoted frequently in the press and has lectured at major industry events, universities, and for other regulatory bodies. Starting in January 2019, Mr. Schwartz has served on the Executive Board of ADA Site Compliance LLC, a boutique provider of digital accessibility solutions. His efforts led to the September 2024 acquisition of the company by AudioEye, Inc. (Nasdaq: AEYE) ending his tenure with the company. In May 2020, he co-founded an investment fund, Five Founders Investment Fund LLC, designed to accelerate growth for a select group of private companies through the deployment of intellectual and financial capital. He also regularly volunteers in competition support for the PGA Tour, LPGA, PGA Tour Champions, and NCAA. Mr. Schwartz graduated with honors from The American University, Washington, DC, with a B.S. in International Finance. We believe Mr. Schwartz is qualified to serve on our Board due to his regulatory compliance experience, track record of successful entrepreneurship, and expertise in capital formation and deployment.

***Advisory Board***

QumulusAI's Advisory Board is a powerhouse of senior executives and strategic leaders from enterprise technology, intelligence, digital infrastructure, capital markets, and digital sectors. Drawing expertise from organizations such as Cisco Systems, Lumen Technologies, VMware, Zscaler, IBM, and the U.S. Department of Defense, the Advisory Board is deeply embedded within the intelligence community and capital markets, maintaining relationships with influential financial, government, and technology stakeholders.

Beyond their credentials, the Advisory Board's true value lies in their ability to open doors, shape strategy, and accelerate execution. They provide QumulusAI with:

● Direct access to decision-makers in commercial enterprises and government agencies.

● Strategic guidance on navigating regulatory, security, and market-entry challenges.

● Accelerated partnership opportunities with organizations critical to scaling AI infrastructure.

● Market intelligence drawn from their ongoing engagement with capital markets and technology thought leaders.

Their influence extends beyond advice — they actively connect QumulusAI to high-value opportunities, champion the company within their networks, and help secure early adoption in priority markets. This ensures QumulusAI can move faster, compete more effectively, and capture market share in both public and private sector AI infrastructure ecosystems. With this advisory board's backing, QumulusAI has a strategic advantage that translates directly into business growth and market leadership.

**Family Relationships**

There are no family relationships among any of our executive officers or directors.

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**CORPORATE GOVERNANCE**

**Corporate Governance Guidelines**

In connection with this direct listing, our Board has adopted Corporate Governance Guidelines, which will be available under the "Investor Relations⸺Corporate Governance" section of our corporate website *www.qumulusai.com* after completion of the direct listing. Among the topics addressed in our Corporate Governance Guidelines are:

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| | |
|:---|:---|
| ● Board size, composition and qualifications | ● Retirement and resignation policy |
| ● Selection of directors | ● Stock ownership guidelines |
| ● New director orientation | ● Procedures for directors who receive less than a majority vote |
| ● Board leadership | ● Change of principal occupation; limits on board memberships |
| ● Chief Executive Officer succession planning | ● Board compensation |
| ● Board committees | ● Stock ownership by directors and executive officers |
| ● Board and committee meetings | ● Loans to directors and executive officers |
| ● Executive sessions of independent directors | ● Chief Executive Officer evaluation |
| ● Meeting attendance by directors and non-directors | ● Board and committee evaluation |
| ● Appropriate information and access | ● Director continuing education |
| ● Ability to retain advisors | ● Succession planning |
| ● Conflicts of interest and director independence | ● Related person transactions |
| ● Board interaction with corporate constituencies | ● Communications with directors |
| ● Retirement and term limits | ● Duty of loyalty and confidentiality |

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**Board Leadership Structure**

Under our Corporate Governance Guidelines, the office of Chairman of the Board and Chief Executive Officer may or may not be held by one person. The Board believes it is best not to have a fixed policy on this issue and that it should be free to make this determination based on what it believes is best under the circumstances. However, the Board strongly endorses the concept of an independent director being in a position of leadership. Under our Corporate Governance Guidelines, if at any time the Chief Executive Officer and Chairman of the Board positions are held by the same person, or if the Chairman of the Board is also not an independent director, the Board will elect an independent director as a lead independent director. The lead independent director will provide leadership to our Board if circumstances arise in which the role of Chief Executive Officer and Chairman of the Board may be, or may be perceived to be, in conflict, or if there are other perceived conflicts due to the Chairman of the Board not being an independent director, and perform such additional duties as the Board may otherwise determine and delegate.

Mr. Maniscalco currently serves as our Chief Executive Officer and the Chairman of our Board. However, because Mr. Maniscalco is not an independent director, we have appointed Mr. Kenworthy as the Lead Independent Director. We believe this leadership structure is in the best interests of the Company and our shareholders at this time and strikes the appropriate balance between the Chief Executive Officer's responsibility for the strategic direction, day-to-day-leadership and performance of the Company and the Chairman's and Lead Independent Director's responsibility to provide oversight of the Company's corporate governance and guidance to our Chief Executive Officer and to set the agenda for and preside over Board meetings.

**Director Independence**

In connection with this direct listing, we have applied to list our common stock on the Nasdaq Stock Market. Nasdaq's listing standards require that a majority of the members of a listed company's board of directors be independent within a specified period following the completion of the direct listing. Additionally, Nasdaq rules mandate that, subject to limited exceptions, only independent directors may serve on the audit, compensation, and nominating and corporate governance committees.

For purposes of Nasdaq's independence requirements, a director must not have any relationship that, in the judgment of our Board, would interfere with the exercise of independent judgment in fulfilling the responsibilities of a director. Further, members of the compensation committee must be free of any material relationship with the company that would impair their ability to remain independent from management in the performance of their duties.

Audit committee members must also meet the enhanced independence standards under Rule 10A-3 of the Exchange Act. In particular, they may not accept, directly or indirectly, any consulting, advisory, or compensatory fees from the company or its subsidiaries (other than in their capacity as a board or committee member), nor may they be considered affiliated persons of the company or its subsidiaries. We intend to be in full compliance with these requirements upon the completion of this direct listing.

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Our Board has conducted a thorough review of the independence of each director, considering both Nasdaq's standards and relevant SEC rules. As a result of this assessment, the Board has determined that Dr. Akbari, Mr. Kenworthy, Mr. Mulica, Mr. Schwartz and Mr. Rench, qualify as independent. In making these determinations, the Board considered all relevant facts and circumstances, including each director's business and personal affiliations with the company and its management, stock ownership, and any transactions described in the section titled "*Certain Relationships and Related Party Transactions*."

**Committees of the Board**

Our Board maintains an Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, each of which will have the composition and responsibilities described below. Each of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee will operate under a written charter adopted by the Board, effective in connection with the direct listing, which will be available on the "Investor Relations⸺Corporate Governance" section of our corporate website www.qumulusai.com after completion of the direct listing.

***Audit Committee***

Our Audit Committee is composed of Homaira Akbari, Stacy Kenworthy, Michael Mulica, and David Rench. Dr. Akbari serves as the Chair of our Audit Committee. The members of our Audit Committee meet the independence requirements under Nasdaq and SEC rules. Each member of our Audit Committee is financially literate. In addition, our Board has determined that Dr. Akbari and Mr. Kenworthy are "audit committee financial experts" as that term is defined in Item 407(d)(5)(ii) of Regulation S-K promulgated under the Securities Act. This designation does not, however, impose on them any supplemental duties, obligations, or liabilities beyond those that are generally applicable to the other members of our Audit Committee and Board.

The Audit Committee will provide assistance to the Board in fulfilling its responsibilities for oversight, for quality and integrity of the accounting, auditing, reporting practices, systems of internal accounting and financial controls, the annual independent audit of our financial statements, and the legal compliance and ethics programs of QumulusAI as established by management. The Audit Committee's primary responsibilities will include:

● overseeing our financial reporting process, internal control over financial reporting and disclosure controls and procedures on behalf of the Board;

● having sole authority to appoint, retain and oversee the work of our independent registered public accounting firm and establish the compensation to be paid to the firm;

● reviewing and pre-approving all audit services and permissible non-audit services to be provided to QumulusAI by our independent registered public accounting firm;

● establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters and for the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters;

● overseeing the establishment and administration of (including the grant of any waiver from) a written code of business conduct and ethics applicable to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions;

● receiving periodic updates from senior management on QumulusAI's policies, processes, procedures and any significant developments related to the identification, mitigation and remediation of cybersecurity risks and reviewing the cybersecurity disclosures required to be included in QumulusAI's SEC filings; and

● coordinating with the Nominating and Corporate Governance Committee in that committee's primary oversight over QumulusAI's ESG activities.

The Audit Committee will have the authority to engage the services of outside experts and advisors as it deems necessary or appropriate to carry out its duties or responsibilities.

***Compensation Committee***

Our Compensation Committee is composed of David Rench, Stacy Kenworthy, Michael Mulica, and Barry Schwartz. Mr. Rench serves as the Chair of our Compensation Committee. The members of our Compensation Committee meet the independence requirements under Nasdaq and SEC rules. Each member of the Compensation Committee is also a "non-employee director" within the meaning of Rule 16b-3 under the Exchange Act.

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The Compensation Committee will provide assistance to the Board in fulfilling its oversight responsibility relating to compensation of our Chief Executive Officer and other executive officers and administers our equity compensation plans. The Compensation Committee's primary responsibilities will include:

● recommending to the Board for its determination the annual salaries, incentive compensation, long-term compensation and any and all other compensation applicable to our executive officers;

● establishing and, from time to time, reviewing and revising corporate goals and objectives with respect to compensation for our executive officers and establishing and leading a process for the full Board to evaluate the performance of our executive officers in light of those goals and objectives;

● administering our equity compensation plans and recommending to the Board for its determination grants of options or other equity-based awards for executive officers, employees and independent contractors under our equity compensation plans;

● reviewing our policies with respect to employee benefit plans;

● establishing and, from time to time, reviewing and revising processes and procedures for the consideration and determination of executive compensation;

● overseeing and periodically reviewing QumulusAI's culture and policies and strategies related to human capital management and reviewing the human capital management disclosures included in QumulusAI's annual reports on Form 10-K; and

● coordinating with the Nominating and Corporate Governance Committee in that committee's primary oversight over QumulusAI's ESG activities.

The Compensation Committee will have the authority to engage the services of outside experts and advisors as it deems necessary or appropriate to carry out its duties and responsibilities, and prior to doing so, assesses the independence of such experts and advisors from management.

***Nominating and Corporate Governance Committee***

Our Nominating and Corporate Governance Committee is composed of Barry Schwartz, Homaira Akbari, Michael Mulica, and David Rench. Mr. Schwartz serves as the Chair of our Nominating and Corporate Governance Committee. The members of our Nominating and Corporate Governance Committee meet the independence requirements under Nasdaq and SEC rules.

Our nominating and corporate governance committee's principal functions will include:

● identifying individuals qualified to become members of the Board;

● recommending director nominees for each annual meeting of our shareholders and director nominees to fill any vacancies that may occur between meetings of shareholders;

● making recommendations to the Board regarding director diversity (which may include diversity of age, gender, race, ethnicity, education, skills, professional experience, knowledge, backgrounds and viewpoints), retirement age, tenure and refreshment policies;

● being aware of best practices in corporate governance matters;

● developing and overseeing an annual Board and committee evaluation process;

● establishing and leading a process for determination of the compensation applicable to the non-employee directors on the Board;

● overseeing QumulusAI's ESG activities and coordinating with and soliciting input from the Compensation Committee and the Audit Committee in formulating the approach to QumulusAI's ESG activities.

The Nominating and Corporate Governance Committee will have the authority to engage the services of outside experts and advisors as it deems necessary or appropriate to carry out its duties and responsibilities.

**Role of Board in Risk Oversight**

The Board as a whole has responsibility for risk oversight, with more in-depth reviews of certain areas of risk being conducted by the relevant committees that report on their deliberations to the full Board. The oversight responsibility of the Board and its committees is enabled by management reporting processes that are designed to provide information to the Board about the identification, assessment and management of critical risks and management's risk mitigation strategies. The areas of risk that we focus on include operational, financial (accounting, credit, liquidity and tax), legal, compensation, competitive, cybersecurity, health, safety, environmental, economic, political and reputational risks.

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The standing committees of the Board will oversee risks associated with their respective principal areas of focus. The Audit Committee's role will include a particular focus on the qualitative aspects of financial reporting, on our processes for the management of business and financial risk, our financial reporting obligations and for compliance with significant applicable legal, ethical and regulatory requirements. The Audit Committee, along with management, will also be responsible for developing and participating in a process for review of important financial and operating topics that present potential significant risk to QumulusAI. The Compensation Committee will be responsible for overseeing risks and exposures associated with our executive compensation programs and arrangements. The Nominating and Corporate Governance Committee will oversee risks relating to our corporate governance matters, director compensation programs and director succession planning.

We recognize that a fundamental part of risk management is understanding not only the risks a company faces and what steps management is taking to manage those risks, but also understanding what level of risk is appropriate for QumulusAI. The involvement of the full Board each year in establishing our key corporate business strategies and annual fiscal budget is a key part of the Board's assessment of management's appetite for risk and also a determination of what constitutes an appropriate level of risk for QumulusAI.

We believe the current leadership structure of our Board is appropriate and helps ensure proper risk oversight for QumulusAI for a number of reasons, including: (1) general risk oversight by the full Board in connection with its role in reviewing our key business strategies and monitoring on an on-going basis the implementation of our key business strategies; (2) more detailed oversight by our standing committees that are currently comprised of and chaired by our independent directors, and (3) the focus of our Chairman on allocating appropriate Board agenda time for discussion regarding the implementation of our key business strategies and specifically risk management.

**Code of Business Conduct and Ethics**

Our Board will adopt a Code of Business Conduct and Ethics, which applies to all of our directors, executive officers, including our Chief Executive Officer and Chief Financial Officer, and other employees, and meets the requirements of the SEC and the Nasdaq Stock Market. Our Code of Business Conduct and Ethics will be available on the "Investor Relations⸺Corporate Governance" section of our corporate website *www.qumulusai.com* after completion of the direct listing.

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**EXECUTIVE COMPENSATION**

We are an "emerging growth company" under applicable SEC rules and are providing disclosure regarding our executive compensation arrangements pursuant to the rules applicable to emerging growth companies, which means that we are not required to provide a compensation discussion and analysis and certain other disclosures regarding our executive compensation.

Our named executive officers as of December 31, 2025, were:

● Robert C. Bissell, former President and former Chief Executive Officer; and

● Patrick Gahan, former Interim Chief Executive Officer and current SVP, Capital Markets;

● Michael Maniscalco, Chief Executive Officer;

● Scott Krosnowski, Chief Financial Officer;

● Houston Aderhold, former Chief Technology Officer and current SVP, Infrastructure and Construction

● Ankur Chatterjee, Chief Integration Officer

**Summary Compensation Table** 

The following table presents summary information regarding the total compensation for services rendered in all capacities that was awarded to, earned by, or paid to our named executive officers for the years ended December 31, 2024 and 2023.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Name and Principal Position** | **Year** | **Salary ($)** | **Bonus<sup>(7)</sup>** | **All Other** <br> **Compensation** <br> **($)** | **Total ($)** |
| Robert C. Bissell, | 2025 | 218000 |  |  | 218000 |
| *Former President and Former Chief Executive Officer<sup>(1)</sup>* | 2024 | 245500<sup>(5)</sup> |  |  | 245500 |
| Patrick Gahan, | 2025 | 59200 | 15833 |  | 75033 |
| *Former Interim Chief Executive Officer, current SVP Capital Markets<sup>(1)(2)</sup>* | 2024 |  |  |  |  |
| Michael Maniscalco, | 2025 | 100000 | 50000 | 15181<sup>(8)</sup> | 165181 |
| *Chief Executive Officer<sup>(1)(2)</sup>* | 2024 |  |  |  |  |
| Scott Krosnowski, | 2025 | 256500 | 136250 |  | 392750 |
| *Chief Financial Officer<sup>(2)(3)</sup>* | 2024 |  |  |  |  |
| Houston Aderhold, | 2025 | 218000 |  |  | 218000 |
| *Senior Vice President of Infrastructure and Construction*  | 2024 | 175500<sup>(6)</sup> |  |  | 175500 |
| Ankur Chatterjee, | 2025 | 154255 | 56250 |  | 210505 |
| *Chief Integration Officer<sup>(2)(4)</sup>* | 2024 |  |  |  |  |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Mr. Bissell voluntarily resigned as Chief Executive Officer effective April 1, 2025. Mr. Gahan was appointed Interim Chief Executive Officer effective April 1, 2025 and served in this role through August 31, 2025. Mr. Maniscalco was appointed Chief Executive Officer effective September 1, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Messrs. Gahan, Maniscalco, Krosnowski, and Chatterjee were not named executive officers in 2024; therefore, their information is only provided for 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Mr. Krosnowski's employment through January 15, 2025 was on a part-time basis, and his full-time role began on January 16, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Mr. Chatterjee's employment began following the acquisition of TCM; therefore, his compensation reflects amounts paid by the Company from April 1, 2025 through December 31, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Salary in 2024 includes $50,000 paid as compensation for Mr. Bissell's role as former President and former Chief Executive Officer pursuant to a consulting agreement with Chalin Inc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) Salary in 2024 includes $50,000 paid as compensation for Mr. Aderhold's role as Senior Vice President of Infrastructure and Construction pursuant to a consulting agreement with MHA Technologies Inc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) Bonus amounts reflect bonuses pursuant to compensation agreements, as described below. Mr. Krosnowski additionally received a $70,000 signing bonus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) Amount reflects legal fees paid by the Company on behalf of Mr. Maniscalco in connection with the negotiation of his compensation agreement.

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**Narrative to Summary Compensation Table**

***Base Salaries***

Our named executive officers receive a base salary to provide a fixed component of compensation reflecting the executive's skill set, experience, role, and responsibilities.

***Bonuses***

As described below, certain of our named executive officers are eligible to receive a bonus pursuant to their compensation agreement. Mr. Krosnowski additionally received a $70,000 signing bonus.

***Other Elements of Compensation***

We provide health, dental, vision, life, and disability insurance benefits to our named executive officers, on the same terms and conditions as provided to all other eligible employees.

We also sponsor a broad-based 401(k) plan intended to provide eligible employees with an opportunity to defer eligible compensation up to certain annual limits. As a tax-qualified retirement plan, contributions (if any) made by us are deductible by us when made, and contributions and earnings on those amounts are generally not taxable to the employees until withdrawn or distributed from the 401(k) plan. Our named executive officers are eligible to participate in our employee benefit plans, including our 401(k) plan, on the same basis as our other employees. During the year ended December 31, 2024, we did not make matching contributions for our named executive officers.

**Executive Compensation Arrangements**

Prior to September 1, 2025, our named executive officers did not enter into offer letters with QumulusAI regarding their employment. As noted in the Summary Compensation Table, Mr. Bissell and Mr. Aderhold received a portion of their compensation pursuant to a consulting agreement with their respective consulting entity, although neither of these agreements contained any employment terms.

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On September 1, 2025, we entered into compensation agreements with Mr. Gahan, Mr. Maniscalco, Mr. Krosnowski, and Mr. Chatterjee providing for the terms of their employment. Each compensation agreement includes standard confidentiality, non-competition and indemnification provisions.

Pursuant to his compensation agreement, Mr. Gahan serves as our Senior Vice President of Capital Markets on a part-time basis. The agreement has a one-year term and provides for a $195,000 base salary and an annual bonus at 25% of base salary (which increases automatically to 50% once the Company is listed on Nasdaq), based on the satisfaction of performance thresholds. Additionally, pursuant to the agreement, Mr. Gahan is eligible to receive an initial award of $285,000 of restricted stock units ("RSUs") (pending effectiveness of the 2026 Plan), $71,250 of which will vest on the one-year anniversary of the grant date with the remaining shares vesting in equal monthly installments over 12 months thereafter. In recognition of his work on the direct listing, Mr. Gahan additionally is eligible to receive a special RSU grant equal to $975,810, which will vest in full on September 1, 2026. Thereafter, Mr. Gahan is eligible to receive annual RSU grants and performance share unit ("PSU") grants as may be determined by the Board. Mr. Gahan is additionally eligible to receive standard employee benefits and expense reimbursement. In the event of his termination without cause or for good reason, as such terms are defined in his compensation agreement, Mr. Gahan is eligible to receive severance equal to his salary, to be paid within 60 calendar days or in 12 monthly installments, plus the immediate vesting of his unvested equity awards.

Pursuant to his compensation agreement, Mr. Maniscalco serves as our Chief Executive Officer. The agreement has a three-year term and provides for a $300,000 base salary (which increases automatically to $350,000 once the Company is listed on Nasdaq and to $400,000 once the Company has been listed on Nasdaq for at least six months and achieves a $2 billion market capitalization) and an annual bonus at 50% of base salary (which increases automatically to 75% once the Company is listed on Nasdaq), based on the satisfaction of performance thresholds and subject to a $100,000 minimum. Additionally, pursuant to the agreement, Mr. Maniscalco is eligible to receive an initial award of $750,000 of RSUs (pending effectiveness of the 2026 Plan), one-third of which will vest on the one-year anniversary of the grant date with the remaining shares vesting in equal monthly installments over 36 months thereafter. Thereafter, Mr. Maniscalco is eligible to receive annual RSU grants equal to not less than $500,000 ($750,000 once the Company is considered a "mid cap" corporation) and PSU grants as may be determined by the Board. Mr. Maniscalco is additionally eligible to receive standard employee benefits and expense reimbursement. In the event of his termination without cause or for good reason, as such terms are defined in his compensation agreement, Mr. Maniscalco is eligible to receive severance equal to two times his salary, to be paid within 60 calendar days or in 24 monthly installments, plus the immediate vesting of his unvested equity awards.

Pursuant to his compensation agreement, Mr. Krosnowski serves as our Chief Financial Officer. The agreement has a one-year term and provides for a $265,000 base salary (which increases automatically to $275,000 once the Company is listed on Nasdaq) and an annual bonus at 25% of base salary (which increases automatically to 75% once the Company is listed on Nasdaq), based on the satisfaction of performance thresholds. Additionally, pursuant to the agreement, Mr. Krosnowski is eligible to receive an initial award of $500,000 of RSUs (pending effectiveness of the 2026 Plan), $125,000 of which will vest on the one-year anniversary of the grant date with the remaining shares vesting in equal monthly installments over 12 months thereafter. In recognition of his work on the direct listing, Mr. Krosnowski additionally is eligible to receive a special RSU grant equal to $610,092, which will vest in full on September 1, 2026. Thereafter, Mr. Krosnowski is eligible to receive annual RSU grants and PSU grants as may be determined by the Board. Mr. Krosnowski is additionally eligible to receive standard employee benefits and expense reimbursement. In the event of his termination without cause or for good reason, as such terms are defined in his compensation agreement, Mr. Krosnowski is eligible to receive severance equal to his salary, to be paid within 60 calendar days or in 12 monthly installments, plus the immediate vesting of his unvested equity awards.

Pursuant to his compensation agreement, Mr. Chatterjee serves as our Chief Integration Officer. The agreement has a one-year term and provides for a $225,000 base salary (which increases automatically to $250,000 once the Company is listed on Nasdaq) and an annual bonus at 25% of base salary (which increases automatically to 50% once the Company is listed on Nasdaq), based on the satisfaction of performance thresholds. Additionally, pursuant to the agreement, Mr. Chatterjee is eligible to receive an initial award of $500,000 of RSUs (pending effectiveness of the 2026 Plan), $125,000 of which will vest on the one-year anniversary of the grant date with the remaining shares vesting monthly over 12 months thereafter. In recognition of his work on the direct listing, Mr. Chatterjee additionally is eligible to receive a special RSU grant equal to $491,080, which will vest in full on September 1, 2026. Thereafter, Mr. Chatterjee is eligible to receive annual RSU grants and PSU grants as may be determined by the Board. Mr. Chatterjee is additionally eligible to receive standard employee benefits and expense reimbursement. In the event of his termination without cause or for good reason, as such terms are defined in his compensation agreement, Mr. Chatterjee is eligible to receive severance equal to his salary, to be paid within 60 calendar days or in 12 monthly installments, plus the immediate vesting of his unvested equity awards.

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 **Global Digital Holdings, Inc. 2022 Option Plan, as Amended**

We believe that our ability to grant equity-based awards is a valuable compensation tool that enables us to attract, retain, and motivate our employees, consultants, and members of our Board by aligning their financial interests with those of our shareholders. The principal features of our 2022 Plan are summarized below. This summary is qualified in its entirety by reference to the actual text of the 2022 Plan, which is filed as an exhibit to the registration statement of which this prospectus is a part.

On December 12, 2022, we adopted our 2022 Plan. The purposes of the 2022 Plan are to (a) enable the Company to attract, retain and motivate the types of employees, consultants and directors who will contribute to the Company's long range success; (b) provide incentives that align the interests of employees, consultants and directors with those of the shareholders of the Company; and (c) promote the success of the Company's business.

*Administration*. Our 2022 Plan is administered by a committee of members of the Board appointed by the Board to administer the 2022 Plan, referred to herein as the "Committee." Subject to the terms of the 2022 Plan, the Committee has the authority to, among other things, construe and interpret the 2022 Plan and apply its provisions; to promulgate, amend, and rescind rules and regulations relating to the administration of the 2022 Plan; to determine when awards are to be granted under the 2022 Plan and the applicable grant date; and to determine the number of shares of common stock to be made subject to each award. The Committee may modify awards subject to the terms of the 2022 Plan subject to certain limitations.

*Shares Authorized*. As of March 31, 2026, we had 1,333,334 shares of our common stock reserved for issuance pursuant to grants under our 2022 Plan of which 96,875 shares remained available for grant. As of March 31, 2026, options to purchase 54,425 shares had been exercised and options to purchase 1,182,034 shares remained outstanding, with a weighted-average exercise price of $1.93 per share.

*Adjustments*. In the event of changes in the outstanding common stock or in the capital structure of the Company by reason of any stock or extraordinary cash dividend, stock split, reverse stock split, an extraordinary corporate transaction such as any recapitalization, reorganization, merger, consolidation, combination, exchange, or other relevant change in capitalization occurring after the grant date of any award, awards granted under the 2022 Plan and any award agreements, the exercise price of options and the maximum number of shares of common stock subject to awards may be equitably adjusted or substituted, as to the number, price or kind of a share of common stock or other consideration subject to such awards to the extent necessary to preserve the economic intent of such award.

*Eligible Participants*. The persons eligible to receive awards under the 2022 Plan are the employees, consultants and directors of the Company and its affiliates. In order to receive an award and become a participant in the 2022 Plan, such employee, consultant or director must be selected by the Committee to receive an award.

*Stock Options*. Awards that may be granted under the 2022 Plan include: (a) incentive stock options and (b) non-qualified stock options. Incentive stock options may be granted to "employees" (within the meaning of Treasury Regulation Section 1.421-7(h)) of the Company or any "subsidiary corporation" with respect to the Company for purpose of Section 424(f) of the Code only. Awards other than incentive stock options may be granted to employees, consultants and directors. Subject to limited exceptions, the exercise price of each option may not be less than 100% of the fair market value of the common stock subject to the option on the grant date.

*Termination of Employment or Other Service*. Unless otherwise provided in an award agreement or in an employment agreement, the terms of which have been approved by the Committee, in the event an option holder's continuous service terminates (other than upon the option holder's death or disability), the option holder may exercise his or her option (to the extent that the option holder was entitled to exercise such option as of the date of termination) but only within such period of time ending on the earlier of (a) the date three months following the termination of the option holder's continuous service or (b) the expiration of the term of the option as set forth in the award agreement; provided, however, that if the termination of continuous service is by the Company for cause, all outstanding options (whether or not vested) shall immediately terminate and cease to be exercisable. If, after termination, the option holder does not exercise his or her option within the time specified in the award agreement, the option shall terminate.

Unless otherwise provided in an award agreement, in the event that an option holder's continuous service terminates as a result of the option holder's disability, the option holder may exercise his or her option (to the extent that the option holder was entitled to exercise such option as of the date of termination), but only within such period of time ending on the earlier of (a) the date 12 months following such termination or (b) the expiration of the term of the option as set forth in the award agreement. If, after termination, the option holder does not exercise his or her option within the time specified herein or in the award agreement, the option shall terminate.

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Unless otherwise provided in an award agreement, in the event an option holder's continuous service terminates as a result of the option holder's death, then the option may be exercised (to the extent the option holder was entitled to exercise such option as of the date of death) by the option holder's estate, by a person who acquired the right to exercise the option by bequest or inheritance or by a person designated to exercise the option upon the option holder's death, but only within the period ending on the earlier of (a) the date 12 months following the date of death or (b) the expiration of the term of such option as set forth in the award agreement. If, after the option holder's death, the option is not exercised within the time specified herein or in the award agreement, the option shall terminate.

*Forfeiture and Recoupment*. Unless the Committee provides otherwise, if a participant materially violates any confidentiality, non-solicitation, development, or noncompetition agreement with the Company or an affiliate, if the participant's employment is terminated for cause, or upon such other events as determined by the Committee in its sole discretion, the Company may in its sole discretion (a) repurchase (and the participant shall sell) any shares of common stock acquired by the participant (or by a permitted transferee of the participant) pursuant to awards granted hereunder for a price equal to the purchase price paid (if any) by the participant under the award, or if less, the fair market value of the shares of common stock on the date of repurchase, or (b) cause the participant to (and the participant shall) reimburse the Company the amounts received (either directly or indirectly with respect to amounts that were withheld for tax purposes) by the participant pursuant to awards granted and exercised hereunder for a price equal to the excess of the fair market value of the shares of common stock on the date of exercise over the option exercise price for the respective shares of common stock. In the event a clawback event has occurred but is not discovered until a later time, the Company may either repurchase shares of common stock as described above (and the participant shall sell), or require the participant to (and the participant shall) reimburse the Company pursuant to the foregoing.

*Effect of Change in Control*. In the event that we are subject to (a) an acquisition of more than 50% of the total fair market value or total voting power of our stock; (b) an acquisition during a 12-month period of ownership of our stock possessing 30% or more of the total voting power of our stock; (c) the replacement of a majority of the members of our Board during a 12-month period whose appointment or election is not endorsed by a majority of the Board before the date of appointment or election; or (d) an acquisition during a 12-month period of assets from the company that have a total gross fair market value equal to more than 40% of the total gross fair market value of all of the assets of the Company immediately before such acquisition, the 2022 Plan gives the Committee discretion to accelerate, cancel, substitute or provide notice of termination of outstanding awards.

*Term, Termination and Amendment*. The term of the 2022 Plan is 10 years. The Board at any time, and from time to time, may amend or terminate the 2022 Plan, subject to certain limitations. The Board may also suspend or terminate the 2022 Plan.

**QumulusAI, Inc. 2026 Equity Incentive Plan** 

In connection with this direct listing, we intend to adopt the QumulusAI, Inc. 2026 Equity Incentive Plan (the "2026 Plan") to replace the 2022 Plan. The Purpose of the 2026 Plan is to advance the interests of the Company and our shareholders by enabling us to attract and retain qualified individuals to perform services, provide incentive compensation for such individuals in a form that is linked to the growth and profitability of our Company and increases in shareholder value, and provide opportunities for equity participation that align the interests of participants with those of our shareholders. The principal features of our 2026 Plan are summarized below. This summary is qualified in its entirety by reference to the actual text of the 2026 Plan, which is filed as an exhibit to the registration statement of which this prospectus is a part.

*Administration*. The Board and the Compensation Committee will administer the 2026 Plan. Subject to certain limitations, the plan administrator has broad authority under the terms of the 2026 Plan to take certain actions under the plan.

*Delegation*. To the extent permitted by applicable law, the Board or Compensation Committee may delegate to one or more of its members or to one or more officers of the Company such administrative duties or powers as it may deem advisable. The Board or Compensation Committee may authorize one or more directors or officers of the Company to designate employees, other than officers, non-employee directors, or 10% shareholders of the Company, to receive awards under the plan and determine the size of any such awards, subject to certain limitations.

*No Re-pricing*. The Board may not, without prior approval of our shareholders, effect any re-pricing of any previously granted "underwater" option or stock appreciation right ("SAR") by: (i) amending or modifying the terms of the option or SAR to lower the exercise price or grant price; (ii) canceling the underwater option or SAR in exchange for (A) cash; (B) replacement options or SARs having a lower exercise price or grant price; or (C) other awards; or (iii) repurchasing the underwater options or SARs and granting new awards under the 2026 Plan. An option or SAR will be deemed to be "underwater" at any time when the fair market value of the common stock is less than the exercise price of the option or the grant price of the SAR.

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 *Shares Authorized*. Subject to adjustment (as described below), the maximum number of shares of our common stock that will be able for issuance under the 2026 Plan will be 4,770,000 shares, which initial share pool will automatically increase on January 1st of each year from 2027 until 2036 by the lesser of (a) five percent of the number of shares of common stock outstanding as of the close of business on the immediately preceding December 31st and (b) the number of shares of common stock determined by the Board on or prior to such date for such year. No more than 1,770,000 total shares may be granted as incentive stock options.

Shares that are issued under the 2026 Plan or that are subject to outstanding awards will be applied to reduce the maximum number of shares remaining available for issuance under the 2026 Plan only to the extent they are used; provided, however, that the full number of shares subject to a stock-settled SAR or other stock-based award will be counted against the shares of common stock authorized for issuance under the 2026 Plan, regardless of the number of shares actually issued upon settlement of such SAR or other stock-based award. Any shares withheld to satisfy tax withholding obligations on awards issued under the 2026 Plan, any shares withheld to pay the exercise price or grant price of awards under the 2026 Plan, and any shares not issued or delivered as a result of the "net exercise" of an outstanding option or settlement of a SAR in shares will be counted against the shares authorized for issuance under the 2026 Plan and will not be available again for grant under the 2026 Plan. Shares subject to awards settled in cash will again be available for issuance pursuant to awards granted under the 2026 Plan. Any shares repurchased by the Company on the open market using the proceeds from the exercise of an award will not increase the number of shares available for future grant of awards. Any shares of common stock related to awards granted under the 2026 Plan that terminate by expiration, forfeiture, cancellation, or otherwise without the issuance of the shares will be available again for grant under the 2026 Plan. To the extent permitted by applicable law, shares issued in assumption of, or in substitution for, any outstanding awards of any entity acquired in any form of combination by the Company or a subsidiary or otherwise will not be counted against shares available for issuance pursuant to the 2026 Plan. The shares available for issuance under the 2026 Plan may be authorized and unissued shares or treasury shares.

*Non-Employee Director Compensation Limit*. The 2026 Plan limits total non-employee director compensation such that the sum of any cash compensation, or other compensation, and the value (determined as of the grant date in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor thereto) of awards granted to a non-employee director as compensation for services as a non-employee director during any fiscal year of the Company may not exceed $400,000 (increased to $600,000 with respect to any non-employee director serving as chairman of the Board or lead independent director or in the fiscal year of a non-employee director's initial service as a non-employee director). Any compensation that is deferred will count towards this limit for the year in which the compensation is first earned, and not a later year of settlement.

*Adjustments*. In the event of any reorganization, merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split, combination of shares, rights offering, divestiture or extraordinary dividend (including a spin off), or other similar change in the corporate structure or shares of our common stock, the Board will make the appropriate adjustment or substitution. These adjustments or substitutions may be to the number and kind of securities and property that may be available for issuance under the 2026 Plan. In order to prevent dilution or enlargement of the rights of participants, the Board may also adjust the number, kind, and exercise price of securities or other property subject to outstanding awards.

*Eligible Participants*. Awards may be granted to employees, non-employee directors, and consultants of the Company or any of our subsidiaries. A "consultant" for purposes of the 2026 Plan is one who renders services to the Company or its subsidiaries that are not in connection with the offer and sale of our securities in a capital raising transaction and do not directly or indirectly promote or maintain a market for our securities.

*Types of Awards*. The 2026 Plan permits the grant of non-statutory and incentive stock options, SARs, restricted stock awards, RSUs, deferred stock units ("DSUs"), performance awards, non-employee director awards, and other stock-based awards. Awards may be granted either alone or in addition to or in tandem with any other type of award.

*Stock Options*. Stock options entitle the holder to purchase a specified number of shares of our common stock at a specified price, which is called the exercise price, subject to the terms and conditions of the stock option grant. The 2026 Plan permits the grant of both non-statutory and incentive stock options. Incentive stock options may be granted solely to eligible employees of the Company or its subsidiary. Each stock option granted under the 2026 Plan must be evidenced by an award agreement that specifies the exercise price, the term, the number of shares underlying the stock option, the vesting, and any other conditions. The exercise price of each stock option granted under the 2026 Plan must be at least 100% of the fair market value of a share of our common stock as of the date the award is granted to a participant. Fair market value under the plan means, unless otherwise determined by the Board, the closing price of our common stock, as reported on Nasdaq, on the immediately prior trading day. The Board fixes the terms and conditions of each stock option, subject to certain restrictions, such as a ten-year maximum term.

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*Stock Appreciation Rights*. A SAR is a right granted to receive payment of cash, stock, or a combination of both equal to the difference between the fair market value of shares of our common stock and the grant price of such shares. Each SAR granted must be evidenced by an award agreement that specifies the grant price, the term, and such other provisions as the Board may determine. The grant price of a SAR must be at least 100% of the fair market value of our common stock on the date of grant. The Board fixes the term of each SAR, but SARs granted under the 2026 Plan will not be exercisable more than 10 years after the date the SAR is granted

*Restricted Stock Awards, Restricted Stock Units, and Deferred Stock Units*. Restricted stock awards, RSUs, and/or DSUs may be granted under the 2026 Plan. A restricted stock award is an award of common stock that is subject to restrictions on transfer and risk of forfeiture upon certain events, typically including termination of service. RSUs are similar to restricted stock awards except that no shares are actually awarded to the participant on the grant date. DSUs permit the holder to receive shares of common stock or the equivalent value in cash or other property at a future time as determined by the Board. The Board will determine, and set forth in an award agreement, the period of restriction, the number of shares of restricted stock awards or the number of RSUs or DSUs granted, and other such conditions or restrictions.

*Performance Awards*. Performance awards, in the form of cash, shares of common stock, other awards, or a combination of both, may be granted under the 2026 Plan in such amounts and upon such terms as the Board may determine. The Board will determine, and set forth in an award agreement, the amount of cash and/or number of shares or other awards, the performance goals, the performance periods, and other terms and conditions. The extent to which the participant achieves his or her performance goals during the applicable performance period will determine the amount of cash and/or number of shares or other awards earned by the participant. The Board retains discretion to adjust performance awards either upward or downward, either on a formula or discretionary basis or any combination, as the Board determines.

*Non-Employee Director Awards*. The Board at any time and from time to time may approve resolutions providing for the automatic or other grant of awards under the 2026 Plan to non-employee directors. Such awards may be granted singly, in combination, or in tandem, and may be granted pursuant to such terms, conditions, and limitations as the Board may establish in its sole discretion consistent with the provisions of the 2026 Plan. The Board may permit non-employee directors to elect to receive all or any portion of their annual retainers, meeting fees, or other fees in restricted stock, RSUs, DSUs, or other stock-based awards in lieu of cash.

*Other Stock-Based Awards*. Consistent with the terms of the plan, other stock-based awards may be granted to participants in such amounts and upon such terms as the Board may determine.

*Dividend Equivalents*. With the exception of stock options, SARs, and unvested performance awards, awards under the 2026 Plan may, in the Board's discretion, earn dividend equivalents with respect to the cash or stock dividends or other distributions that would have been paid on the shares of our common stock covered by such award had such shares been issued and outstanding on the dividend payment date. However, no dividends may be paid on awards until they are vested. Such dividend equivalents will be converted to cash or additional shares of our common stock by such formula and at such time and subject to such limitations as determined by the Board.

*Termination of Employment or Other Service*. The 2026 Plan provides for certain default rules in the event of a termination of a participant's employment or other service. These default rules may be modified in an award agreement or an individual agreement between the Company and a participant. If a participant's employment or other service with the Company is terminated for cause, then all outstanding awards held by such participant will be terminated and forfeited. In the event a participant's employment or other service with the Company is terminated by reason of death, disability, or retirement, then:

● All outstanding stock options (excluding non-employee director options in the case of retirement) and SARs held by the participant will, to the extent exercisable, remain exercisable for a period of one year after such termination, but not later than the date the stock options or SARs expire;

● All outstanding stock options and SARs that are not exercisable and all outstanding restricted stock will be terminated and forfeited; and

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● All outstanding unvested RSUs, performance awards, and other stock-based awards held by the participant will terminate and be forfeited. However, with respect to any awards that vest based on the achievement of performance goals, if a participant's employment or other service with the Company or any subsidiary is terminated prior to the end of the performance period of such award, but after the conclusion of a portion of the performance period (but in no event less than one year), the Board may, in its sole discretion, cause shares to be delivered or payment made with respect to the participant's award, but only if otherwise earned for the entire performance period and only with respect to the portion of the applicable performance period completed at the date of such event, with proration based on the number of months or years that the participant was employed or performed services during the performance period.

In the event a participant's employment or other service with the Company is terminated by reason other than for cause, death, disability, or retirement, then:

● All outstanding stock options (including non-employee director options) and SARs held by the participant that then are exercisable will remain exercisable for three months after the date of such termination, but will not be exercisable later than the date the stock options or SARs expire;

● All outstanding restricted stock will be terminated and forfeited; and

● All outstanding unvested RSUs, performance awards, and other stock-based awards will be terminated and forfeited. However, with respect to any awards that vest based on the achievement of performance goals, if a participant's employment or other service with the Company or any subsidiary is terminated prior to the end of the performance period of such award, but after the conclusion of a portion of the performance period (but in no event less than one year), the Board may, in its sole discretion, cause shares to be delivered or payment made with respect to the participant's award, but only if otherwise earned for the entire performance period and only with respect to the portion of the applicable performance period completed at the date of such event, with proration based on the number of months or years that the participant was employed or performed services during the performance period.

*Modification of Rights upon Termination*. Upon a participant's termination of employment or other service with the Company or any subsidiary, the Board may, in its sole discretion (which may be exercised at any time on or after the grant date, including following such termination) cause stock options or SARs (or any part thereof) held by such participant as of the effective date of such termination to terminate, become, or continue to become exercisable or remain exercisable following such termination of employment or service, and restricted stock, RSUs, DSUs, performance awards, non-employee director awards and other stock-based awards held by such participant as of the effective date of such termination to terminate, vest, or become free of restrictions and conditions to payment, as the case may be, following such termination of employment or service, in each case in the manner determined by the Board; provided, however, that no stock option or SAR may remain exercisable beyond its expiration date. Any such action by the Board adversely affecting any outstanding award will not be effective without the consent of the affected participant, except to the extent the Board is authorized by the 2026 Plan to take such action.

*Forfeiture and Recoupment*. If a participant is determined by the Board to have taken any action while providing services to the Company or within one year after termination of such services that would constitute "cause" or an "adverse action," as such terms are defined in the 2026 Plan, all rights of the participant under the 2026 Plan and any agreements evidencing an award then held by the participant will terminate and be forfeited. The Board has the authority to rescind the exercise, vesting, issuance, or payment in respect of any awards of the participant that were exercised, vested, issued, or paid and require the participant to pay to the Company, within 10 days of receipt of notice, any amount received or the amount gained as a result of any such rescinded exercise, vesting, issuance, or payment. The Company may defer the exercise of any stock option or SAR for up to six months after receipt of notice of exercise in order for the Board to determine whether "cause" or "adverse action" exists. The Company is entitled to withhold and deduct future wages or make other arrangements to collect any amount due.

In addition, awards under the 2026 Plan shall be subject to any automatic forfeiture or voluntary compensation "clawback," forfeiture or recoupment provisions under applicable law and any compensation "clawback," forfeiture or recoupment policy of the Company, as in effect from time to time, and such forfeiture and/or penalty conditions or provisions as determined by the Board and set forth in the applicable award agreement.

*Effect of Change in Control*. Generally, a change in control will mean:

● The acquisition, other than by the Company, by any individual, entity, or group of beneficial ownership of 50% or more of the then outstanding shares of common stock;

● The consummation of a reorganization, merger, or consolidation of the Company with respect to which all or substantially all of the individuals or entities who were the beneficial owners of common stock and voting securities immediately prior to the transaction do not, following the transaction, beneficially own more than 50% of the outstanding shares of common stock of the corporation resulting from the transaction; or

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● A complete liquidation or dissolution of the Company or the sale or other disposition of all or substantially all of the assets of the Company.

Subject to the terms of the applicable award agreement or an individual agreement between the Company and a participant, upon a change in control, the Board may, in its discretion, determine whether some or all outstanding options shall become exercisable in full or in part, whether the restriction period and performance period applicable to some or all outstanding restricted stock awards and RSUs shall lapse in full or in part, and whether the performance measures applicable to some or all outstanding awards shall be deemed to be satisfied. The Board may further require that shares of stock of the corporation resulting from such a change in control, or a parent corporation thereof, be substituted for some or all of our shares of common stock subject to an outstanding award and that any outstanding awards, in whole or in part, be surrendered to us by the holder, to be immediately cancelled by us, in exchange for a cash payment, shares of capital stock of the corporation resulting from or succeeding us, or a combination of both cash and such shares of stock.

 *Term, Termination and Amendment*. Unless sooner terminated by the Board, the 2026 Plan will terminate at 11:59 p.m. on the eve of the tenth anniversary of the effective date. No award will be granted after termination of the 2026 Plan, but awards outstanding upon termination of the 2026 Plan will remain outstanding in accordance with their applicable terms and conditions and the terms and conditions of the 2026 Plan.

Subject to certain exceptions, the Board has the authority to suspend or terminate the 2026 Plan or terminate any outstanding award agreement and the Board has the authority to amend the 2026 Plan or amend or modify the terms of any outstanding award at any time and from time to time. No amendments to the 2026 Plan will be effective without approval of the Company's shareholders if: (a) shareholder approval of the amendment is then required pursuant to Section 422 of the Code, the rules of the primary stock exchange on which the common stock is then traded, applicable U.S. state and federal laws or regulations, and the applicable laws of any foreign country or jurisdiction where awards are, or will be, granted under the 2026 Plan; or (b) such amendment would: (i) modify the re-pricing provisions of the 2026 Plan; (ii) increase the aggregate number of shares of common stock issued or issuable under the 2026 Plan; (iii) modify the eligibility requirements for participants in the 2026 Plan; or (vi) reduce the minimum exercise price or grant price as set forth in the 2026 Plan. No termination, suspension, or amendment of the 2026 Plan shall adversely affect any outstanding award previously granted under the 2026 Plan without the written consent of the participant holding such award.

**Clawback Policy**

In connection with this direct listing, we have adopted a Nasdaq-compliant clawback policy, effective in connection with the direct listing, pursuant to which we will be required to recover erroneously paid compensation from current or former executive officers in the event of certain financial restatements as provided under the Nasdaq rules. In addition, our 2022 Plan, 2026 Plan and related award agreements include "clawback" mechanisms, as described above.

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**DIRECTOR COMPENSATION**

**Summary of Cash and Other Compensation**

From January 1, 2025 through September 29, 2025, our Board was comprised of six directors: Patrick Gahan, Chairman; Houston Aderhold, Assistant Chairman; Robert C. Bissell; Scott Krosnowski; Stacy Kenworthy; and Todd Jones. Mr. Kenworthy and Mr. Jones were non-employee members of our Board. Mr. Kenworthy was the only non-employee director compensated and received $6,000 in cash. None of the employee directors received additional compensation for their Board service.

From September 30, 2025 through December 31, 2025, our Board was comprised of seven directors: Steve Gertz, Chairman, Patrick Gahan, Stacy Kenworthy, Michael Maniscalco, Michael Mulica, David Rench, and Barry Schwartz. No director compensation was paid during this period.

**Non-Employee Director Compensation Policy**

Our Board intends to approve a non-employee director compensation policy, pursuant to which our non-employee directors will be eligible to receive certain cash retainers and equity awards for service on our Board and committees of our Board.

Employee directors will receive no additional retainer for their service as a director, but additional equity compensation is paid to all directors, including those who are employees.

*Cash Retainers*

Retroactive to January 1, 2026, each non-employee director will be entitled to receive the annual cash retainer set forth below, payable in four equal quarterly installments in arrears and prorated for partial quarters of service.

● General Board Service Fee: $70,000.

● Chairman of the Board or, if Chairman is an employee, Lead Independent Director (additional): $25,000.

*Committee Retainers*

In addition to the annual cash retainers set forth above, our committee Chairs and members are additionally eligible to receive committee retainers paid in cash on the same terms as the annual cash retainers or, if the Company so determines, in the form of RSUs under the 2026 Plan, as set forth below:

● Audit Committee Chair: $20,000.

● Audit Committee Member (including Chair): $10,000

● Compensation Committee Chair: $15,000

● Compensation Committee Member (including Chair): $7,500

● Nominating and Corporate Governance Committee Chair: $12,500

● Nominating and Corporate Governance Committee Member (including Chair): $7,500

Any such RSUs will be granted on January 1, or at the onset of service in the case of a new director, and will vest in four equal quarterly installments thereafter. The RSUs will be prorated for partial quarters of service.

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*Equity Grants*

*Initial Grant*. Each non-employee director who joins our Board of Directors is eligible to receive $56,250 in the form of RSUs or non-qualified stock options. The Chairman of the Board or, if the Chairman is an employee, the Lead Independent Director is eligible to receive an additional $56,250 in the form of RSUs or non-qualified stock options under the 2026 Plan. One-third of such award will vest on the one-year anniversary of the grant date, and the remaining two-thirds will vest in equal quarterly installments over the following eight quarters.

*Catch-Up Grants*. In consideration for each non-employee director's service during fiscal year 2025, each non-employee director will be eligible to receive $56,250 in the form of RSUs or non-qualified stock options on the date the 2026 Plan becomes effective in connection with the direct listing. The Chairman of the Board or, if the Chairman is an employee, the Lead Independent Director is eligible to receive an additional $56,250 in the form of RSUs or non-qualified stock options on the date the 2026 Plan becomes effective in connection with the direct listing. Such award shall vest in full on October 1, 2026.

*Annual Grants*. Each non-employee director, other than a director who will not stand for re-election at the next annual meeting, is eligible to receive $56,250 in the form of RSUs or non-qualified stock options on October 1 of each fiscal year beginning in 2026. The Chairman of the Board or, if the Chairman is an employee, the Lead Independent Director is eligible to receive an additional $56,250 in the form of RSUs or non-qualified stock options on October 1 of each fiscal year beginning in 2026. Such award shall vest in full on the one-year anniversary of the grant date.

All equity awards granted to non-employee directors will be granted under the 2026 Plan or any future shareholder-approved equity-based compensation plan and will be subject to the discretion and approval of the Board. The number of shares of common stock underlying RSUs or non-qualified stock options will be determined based on the grant date fair market value of such awards. The exercise price of any non-qualified stock options will be equal to the fair market value of a share of the Company's common stock on the grant date.

*Expense Reimbursement*

All non-employee directors will be reimbursed for travel expenses for attending meetings and other miscellaneous out-of-pocket expenses incurred in performing their Board functions.

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**CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS**

**Procedures Regarding Approval of Related Party Transactions** 

Our Board has adopted corporate governance guidelines, effective upon our direct listing, which provide that the Audit Committee will review, approve or ratify reportable related party transactions by use of the following procedures:

● Our Chief Financial Officer, with the assistance of our legal counsel, will evaluate the disclosures provided in the director and officer questionnaires and from data obtained from our records for potential related person transactions.

● Management will periodically, but no less than annually, report to the Audit Committee on all related person transactions that occurred since the beginning of the prior fiscal year or that it believes will occur in the next year. Such report should include information as to (i) the related person's relationship to QumulusAI and interest in the transaction; (ii) the material facts of the transaction; (iii) the benefits to QumulusAI of the transaction; and (iv) an assessment of whether the transaction is (to the extent applicable) in the ordinary course of business, at arm's length, at prices and on terms customarily available to unrelated third party vendors or customers generally, and whether the related party had any direct or indirect personal interest in, or received any personal benefit from, such transaction.

● Taking into account the factors listed above, and such other factors and information as the Audit Committee may deem appropriate, the Audit Committee will determine whether or not to approve or ratify (as the case may be) each related party transaction so identified.

● Transactions in the ordinary course of business between QumulusAI and an unaffiliated corporation of which a non-employee director of QumulusAI serves as an officer that meet the below criteria are deemed conclusively pre-approved:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o At arm's length;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o At prices and on terms customarily available to unrelated third party vendors or customers generally;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o In which the non-employee director had no direct or indirect personal interest, nor received any personal benefit; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o In amounts that are not material to our business or the business of such unaffiliated corporation.

**Related Party Transactions Since January 1, 2024**

***Agreements with Alder Entities***

As described below, we are party to certain transactions with affiliate entities of Patrick Gahan's family office, Alder Capital Partners (collectively, the "Alder Entities"). ALDER Opportunity, LP beneficially owns more than 5% of the Company's common stock. Both Patrick Gahan, who served as Chairman of the Board in 2023 and 2024 and served as our Interim Chief Executive Officer from April 2025 to August 2025, and Ankur Chatterjee, our current Chief Integration Officer and former Chief Operating Officer, have membership stakes in these entities.

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*Alder Mortgage Group, LLC Loan*

On April 14, 2022, WAHA Technologies, Inc. entered into a $5,000,000 interest only balloon note and a security agreement with Alder Mortgage Group, LLC, in its capacity as loan servicer, which is wholly owned by Window Macaroni Group, LLC, an entity owned by Patrick Gahan and his spouse, and to which Alder Entities that Ankur Chatterjee and Patrick Gahan have a membership interest shared in origination and other fees under $120,000 earned. On October 17, 2022, Gratus Holdings, LLC, an entity owned by Robert C. Bissell and his spouse, participated in this loan in the amount of $450,000 and earned approximately $75,000 in interest. This loan was modified on October 18, 2022 to evidence the partial repayment of the loan principal and amended and restated on July 1, 2024 to extend the maturity date. The maturity date of the note was December 31, 2025 and interest is payable at a rate of 12% per annum. Since January 1, 2024, the largest aggregate amount of principal outstanding was $2,000,000, and we have made principal payments of $2,000,000 and interest payments of $488,848. On or about August 1, 2024, Gratus Holdings, LLC assigned all of its participation interest to various investors, one of which was Window Macaroni Group, LLC in the amount of $37,500. Window Macaroni Group, LLC received 1,250 warrants with an exercise price of $3.00, all of which vested immediately, in exchange for the participation in this extended maturity debt. The loan was paid in full on December 19, 2025.

*Equipment Leases and Profit Share Agreements with ATFP Entities*

From November 1, 2023 to January 30, 2025, TCM Cloud 1, LLC, a subsidiary of TCM, entered into several equipment lease agreements with ATFP Cloud SPV I, LP; ATFP Cloud SPV II, LP; ATFP Cloud SPV III, LP; and ATFP Cloud SPV IV, LP (together, the "ATFP LP Entities") and Alder Technology Funding Partners, LLC as the GP of ATFP Cloud SPV I, LP and ATFP Cloud SPV II, LP, Fluent ATFP, LLC as the GP of ATFP Cloud SPV III, LP, and SGCA ATFP, LLC as the GP of ATFP Cloud SPV IV, LP (together, the "ATFP GP Entities," and together with the ATFP LP Entities, the "ATFP Entities"). Under these agreements, we lease certain technology infrastructure, including servers and data center cabinets. Patrick Gahan, Ankur Chatterjee, and Steve Gertz, our Chief Growth Officer, are members of the ATFP Entities.

ATFP Cloud SPV 1, LP was paid off on January 21, 2025, in the amount of $6,454,466 via a loan from CommerceOne Bank. As consideration for their initial investments, the Company issued ATFP Cloud SPV 1, LP 55,000 warrants to be distributed to the limited partners and general partner, respectively. The exercise price of these warrants is $3.00, all warrants vested immediately. Alder Technology Funding Partners, LLC, is the General Partner of ATFP Cloud SPV 1, LP, of which related parties Patrick Gahan and Kesston Group, LLC, an entity owned by Ankur Chatterjee, are members. The following related parties received warrant amounts noted: Alder Technology, LLC (1,063), Slim Mint Group, LLC (1,595), Window Macaroni Group, LLC (1,595), and Alder Technology Funding Partners, LLC (3,973). In consideration for an early payoff, ATFP Cloud SPV 1, LP received 17,943 non-statutory stock options to be distributed to limited partners and general partners respectively, The following related parties received amounts noted: Slim Mint Group, LLC (545) and Window Macaroni Group, LLC (545). Alder Technology Funding Partners, LLC, received 78,667 non-statutory options for early payoff in lieu of $193,022 in cash. The exercise price of these non-statutory options is $1.11.

ATFP Cloud SPV II, LP was paid off on August 1, 2025 in the amount of $1,754,596. As consideration for their initial investments, the Company issued ATFP Cloud SPV II, LP 7,542 warrants to be distributed to the limited partners and general partner, respectively. The exercise price of these warrants is $3.00, all warrants vested immediately. Alder Technology Funding Partners, LLC is the General Partner of ATFP Cloud SPV II, LP, of which related parties Patrick Gahan and Kesston Group, LLC, an entity owned by Ankur Chatterjee, are members. In consideration for reinvestment and an early payoff, ATFP Cloud SPV II, LP received 10,000 warrants to be distributed to the limited partners and the general partner respectively, and Alder Technology Funding Partners, LLC, received 35,333 warrants. The following related party received warrant amounts from ATFP Cloud SPV II, LP assignment: Alder Technology Funding Partners, LLC (1,089). The exercise price of these warrants is $9.00, and all warrants vested immediately. Monthly payments pursuant to the remaining leases, which had an aggregate value of approximately $5,000,000, ranged from $54,939 to $97,928 prior to payoff.

ATFP Cloud SPV II, LP continued to release additional lease schedules and fundings to TCM for the purchase of GPUs. Patrick Gahan was a $1.25 million funder of the most recent $1.75 million lease schedule via Window Macaroni Group, LLC.

ATFP Cloud SPV I, LP continued to release additional lease schedules and fundings to TCM for the purchase of GPUs. ALDER Technology Funding Partners, LLC, Window Macaroni Group, LLC and Slim Mint Group, LLC, an entity owned by Patrick Gahan and his spouse, were participants in the funding.

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In connection with these equipment lease agreements, TCM Cloud 1, LLC also entered into a profit share agreement with certain of the ATFP Entities on November 1, 2023. We amended and restated this agreement on December 12, 2024. As of March 31, 2026, we have made payments of $122,883 under this agreement.

ATFP Cloud SPV III, LP and ATFP Cloud SPV IV, LP had their earlier lease schedules and associated profit-share agreement paid off as of October 17, 2025 via a loan from CommerceOne Bank. In consideration of an early payoff and in accordance with the terms of the profit share agreement, the Company issued warrants, including to the following related parties in the amounts noted: ATFP SGCA, LLC, an Alder Entity (3,266); Fluent ATFP, LLC (5,000); Alder Technology Funding Partners, LLC (21,289); and JGS Partners, LLC, of which Steve Gertz is the sole member (4,467). The exercise price of these warrants is $10.80, and all warrants vested immediately.

ATFP Cloud SPV I, LP has continued to deploy capital via new lease schedules. This arrangement has a 60-month term with a 12% cost of capital. Alder Technology Funding Partners, LLC receives 10% of the revenue associated with the equipment purchased and deployed via its consulting agreement; provided, however, the revenue share to Alder Technology Funding Partners, LLC is pro rata adjusted down based on the remaining principal balance on each lease schedule at the time of each monthly close-out payment calculation to Alder Technology Funding Partners, LLC. The Company and ATFP Cloud SPV I, LP have agreed in principle to amend and restate the lease and revenue share to an economically equivalent structure that simplifies financial reporting and close. The lease agreement with ATFP Cloud SPV I, LP will be amended to have a 16% cost of capital, and Alder Technology Funding Partners, LLC will be paid management fees by ATFP Cloud SPV I, LP instead of the Company paying separately a revenue share to Alder Technology Funding Partners, LLC.

ATFP Cloud SPV II has continued to deploy capital via new lease schedules. This arrangement has a 24-month term with 23 months of interest only payments. Full return of principal and interest is made in the final month. The cost of capital pursuant to this arrangement is 18%. Alder Technology Funding Partners receives a flat $2,500 per month fee per $1 million deployed via its consulting agreement. The Company and ATFP Cloud SPV II, LP have agreed in principle to amend and restate the lease and revenue share to an economically equivalent structure that simplifies financial reporting and close. The lease agreement with ATFP Cloud SPV II, LP will be amended to have a 21% cost of capital, and Alder Technology Funding Partners, LLC will be paid management fees by ATFP Cloud SPV II, LP instead of the Company paying separately the flat $2,500 per month fee per $1 million deployed.

As consideration for professional services, the Company issued warrants to the following related parties in the amounts noted in fiscal 2024: Alder Technology Funding Partners, LLC (165,714); and Power AI, an entity owned by Alder Technology Funding Partners, LLC and JGS Partners, LLC prior to its dissolution (33,333). The exercise price was $3.00, and all warrants vested immediately.

*Consulting Agreement*

On January 30, 2025, TCM entered into a consulting agreement with Alder Technology Funding Partners, LLC, of which Patrick Gahan and Ankur Chatterjee are members, pursuant to which Alder Technology Funding Partners, LLC organized investors to buy and lease equipment and provided ongoing management services. As of March 31, 2026, we have made payments of $24,650 under this agreement.

*Service Agreement*

On September 1, 2023, TCM entered into a service agreement with Alder Technology, LLC, pursuant to which Alder Technology, LLC provided funding to test the deployment of GPUs and received a negotiated share of profits in return. Patrick Gahan and Ankur Chatterjee are members of Alder Technology, LLC, and Robert C. Bissell, our current Advisory Board Chairman, former President and former Chief Executive Officer, is a participant funder of Alder Technology, LLC. Concurrently, Alder Technology, LLC and Gratus Holdings, LLC entered into a participation agreement, pursuant to which a portion of the investment made by Alder Technology, LLC under the service agreement was transferred to Gratus Holdings, LLC.

On June 1, 2024, TCM entered into an assignment and assumption of participation interest agreement with Alder Technology, LLC, Gratus Holdings, LLC, Rabalais Investments, LLC, and ASIC Juice, LLC. Pursuant to this assignment agreement, a percentage interest in the service agreement described above was assigned to TCM in exchange for issuing an aggregate of 140,000 shares of TCM preferred stock to the assignors. We made profit share payments of $224,000 under this agreement.

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As consideration for entering into the assignment and assumption of participation interest agreement, the assignors were to receive 140,000 shares of TCM's preferred stock; however, through mutual mistake of TCM and the assignors, entered into four convertible promissory notes. On May 23, 2025, the Company, TCM and the assignors entered into a settlement agreement to resolve all potential disputes between them in respect of these four promissory notes, the participation assignment and service agreement. Pursuant to this settlement agreement, the Company agreed to issue to the assignors 84,756 shares of the Company's Series D preferred stock in exchange for the four promissory notes.

On May 21, 2025, TCM entered into a second assignment and assumption of participation interest agreement with Gratus Holdings, LLC and a Bill of Sale with Alder Technology, LLC. Pursuant to this second assignment agreement, the remaining percentage interest in the service agreement described above was assigned to TCM, together with title to the entirety of the equipment governed by the service agreement, in exchange for $67,502.

*Alder Hold Co, LLC Stock Option Assumption and Exchange Agreement*

On December 13, 2022, we entered into a contribution and exchange agreement with Patrick Gahan, Ankur Chatterjee, and Alder Hold Co, LLC, of which Patrick Gahan and Ankur Chatterjee are members, pursuant to which Alder Hold Co, LLC was issued 209,716 shares of our Series B preferred stock, which, together with a $492,638 liquidation preference, converted into 115,520 shares of common stock in connection with the Conversion, and a non-qualified stock option for the purchase of 950 shares of our common stock.

***Agreements with Focus Partners GP***

As described below, we, directly or through WAHA Technologies, Inc., are party to certain transactions with Trailhead Growth, LP and Trailhead Income, LP, and GC Opportunities 2 Private Fund, LP, limited partners of Focus Partners, GP, of which Todd Jones, a former member of our Board, serves as Chief Investment Officer and member.

*Trailhead Growth, LP Loan*

On April 26, 2024, we entered into an amended and restated loan and security agreement and amended and restated collateralized line of credit for $700,000 with Trailhead Growth, LP. This line of credit was never used. Interest under this loan was payable at a rate of 6% per annum. As consideration, on April 26, 2024, we issued a warrant to purchase 9,333 shares of common stock with a value of $28,000 as of that date. Since April 26, 2024, the largest aggregate amount of principal outstanding was $648,262, and we made principal payments of $648,262 and interest payments of $25,063. This loan was paid in full in March 2025 and matured on April 26, 2025, and no amounts remained outstanding as of April 26, 2025.

*Trailhead Income, LP Loan*

On September 1, 2021, WAHA Technologies, Inc. entered into a $4,000,000 interest only balloon note and a security agreement with Trailhead Income LP. This loan was modified on October 4, 2022, and $2,000,000 of the principal was converted to equity. On June 19, 2025, the maturity date was extended from September 1, 2025 to October 1, 2026. Interest under this loan is payable at a rate of 12% per annum. Since January 1, 2024, the largest aggregate amount of principal outstanding was $2,000,000, and we have made principal payments of $0 and interest payments of $520,000. As of March 31, 2026, $2,000,000 in principal and $370,000 in deferred interest was outstanding.

*GC Opportunities 2 Private Fund, LP Loan*

On February 15, 2022, WAHA Technologies, Inc. entered into a $1,850,000 interest only balloon note and loan and security agreement with GC Opportunities 2 Private Fund, LP. This loan was modified on October 4, 2022. The maturity date is February 15, 2026 and interest is payable at a rate of 12% per annum. Since January 1, 2024, the largest aggregate amount of principal outstanding was $1,850,000, and we have made principal payments of $0 and interest payments of $656,711. This note was paid in full including deferred interest of $203,488 on January 31, 2026.

***Private Placements***

From November 2023 through January 2025, the Company issued 9,103,000 shares of Series D Preferred Stock at a price of $1.00 per share to accredited investors, including the following related parties, who invested on the same terms as all other participants: Fluent Holdings, LLC ($50,000); Steve Gertz ($75,000); Barry Schwartz, through his living trust ($200,000); Stephen Hunton ($55,000); and Patrick Gahan's children ($28,000).

From July 1, 2025 through March 9, 2026, the Company issued 2,657,195 shares of common stock at a price of $10.80 per share to accredited investors in a private placement, including the following related parties, who invested on the same terms as all other participants: WOOO-YES! LP, an entity owned by David Rench and his wife ($507,600); ATP Fund II, LP, an Alder Entity ($250,009); and ATP 2025 QAI SPV LLC, an Alder entity ($270,000).

***Conversion of Convertible Note***

On September 5, 2025, the Company issued 429,836 shares of Series D Preferred Stock for the partial conversion of convertible notes previously issued to accredited investors. Steve Gertz and ALDER Opportunity II, LP, an Alder Entity each received 30,270 shares of Series D Preferred Stock in exchange for the conversion of $33,333 each.

***Hosting Agreement***

On April 1, 2023, FCNC Venture, LLC, a joint venture between our subsidiary, SPRE Commercial Group, Inc., and 1617 Digital, LLC entered into a bitcoin miner hosting agreement, pursuant to which FCNC Venture, LLC agreed to provide certain cryptocurrency mining hosting services. This agreement was subsequently amended on December 1, 2023, and we assumed the hosting obligations thereunder. Robert C. Bissell, our current Advisory Board Chairman, former President and former Chief Executive Officer, and Houston Aderhold, our Senior Vice President of Infrastructure and Construction, are managing directors of FCNC Venture, LLC. Under this agreement, which has terminated, we received payments of $73,361.

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***Master Service Agreement***

On October 31, 2023, TCM entered into a master service agreement with Performive LLC, pursuant to which we have leased certain office space, data center cabinets, and other equipment. Ryan DiRocco, who became an advisor to our Board in 2025, co-founded Performive LLC and served as its Chief Technology Officer until October 2024. As of March 31, 2026, we have made payments of $1,868,158 under this agreement.

***TCM Loan from Founder***

On December 31, 2021, TCM entered into an $800,000 line of credit agreement with Ian Gerard, a founder of TCM. This agreement was subsequently amended on December 18, 2024. Interest under this loan was payable at a rate of 5.00% per annum. Since January 1, 2024, the largest aggregate amount of principal outstanding was $859,923 and accrued interest payable totaling $53,658. During the year ended December 31, 2024, $495,582 of the loan was repaid, the remaining unpaid balance was converted to equity, and the accrued interest was forfeited.

***TCM Convertible Note***

In March 2024, TCM issued a $3 million convertible note to accredited investors, which converted into three million shares of preferred stock. On July 1, 2024, a portion of the convertible note converted into 1,356,676 shares of TCM preferred stock. The remainder will convert at maturity, as adjusted for any portion of the note paid. The following related parties participated in this transaction: Ian Gerard; Carlos Rincon, a founder of TCM; Mark Jackson, a founder of TCM; Ankur Chatterjee; Slim Mint Group, LLC; Window Macaroni Group, LLC; Adam Brown, an employee of the Company; Patrick Gahan; Gratus Holdings, LLC; Gahan LTC SPE, LLC, of which Patrick Gahan serves as manager; Steve Gertz; ALDER Technology, LLC; ALDER Opportunity II, LP; ATFP Cloud SPV I, LP; Alder Technology Funding Group, LLC, an Alder Entity; and certain other employees and affiliates who participated at de minimis amounts.

***TCM Acquisition***

On April 1, 2025, the Company entered into Contribution and Exchange Agreements, as amended, with shareholders of TCM, pursuant to which each TCM shareholder contributed all outstanding equity securities in TCM to the Company in exchange for equity securities of the Company. As a result, TCM became a wholly owned subsidiary of the Company, with 75% of the Company's capital stock held by Company shareholders and 25% of the Company's capital stock held by former TCM shareholders. The total acquisition consideration was $39,350,572. The following related parties participated in this transaction and received equity securities of the Company in exchange for their TCM equity securities valued as indicated: Ian Gerard ($8,015,656); Carlos Rincon ($2,986,096); Mark Jackson ($1,467,997); Ankur Chatterjee ($525,550); Slim Mint Group, LLC ($303,760); Window Macaroni Group, LLC ($303,760); Adam Brown ($271,205); Patrick Gahan ($320,661); Gratus Holdings, LLC ($214,192); Gahan LTC SPE, LLC ($50,627); Steve Gertz ($45,869); ALDER Technology, LLC ($40,501); ALDER Opportunity II, LP, ($33,752); ATFP Cloud SPV I, LP ($25,986); Alder Technology Funding Group, LLC ($6,497); and certain other employees and affiliates who participated at de minimis amounts.

***Warrants***

In fiscal 2024, Steve Gertz received 38,375 warrants as compensation for professional services rendered to the Company. The exercise price was $3.00, and all warrants vested immediately.

***Independent Contractor Agreements***

On April 1, 2025, TCM entered into an independent contractor agreement with Rhythmic Ventures, LLC, of which Steve Gertz is a member. Pursuant to this agreement, Mr. Gertz manages our sales activities. As of March 31, 2026, there had been no payments for services rendered and commissions under this agreement.

We have made payments to Robert C. Bissell's company, Chalin Inc., for services Mr. Bissell rendered as our former President and former Chief Executive Officer. Since January 1, 2024, we have made payments of $500,000 under this arrangement. Please see "*Executive Compensation* – *Summary Compensation Table*" for additional information.

We have made payments to Houston Aderhold's company, MHA Technologies Inc., for services Mr. Aderhold rendered as our Senior Vice President of Infrastructure and Construction. Since January 1, 2024, we have made payments of $500,000 under this arrangement. Please see "*Executive Compensation* – *Summary Compensation Table*" for additional information.

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***Indemnification Agreements***

Our Amended and Restated Bylaws ("Bylaws") provide that any person, their heirs, executors, or administrators, may be indemnified or reimbursed by the Company to the fullest extent of the Georgia Business Corporation Code for reasonable expenses actually incurred in connection with any action, suit or proceeding, civil or criminal, to which such person shall be made a party by reason of the fact that such person is or was a director, trustee, officer, employee, or agent of the Company, or that such person is or was serving, at the request of the Company, as a director, trustee, officer, employee, or agent of any other enterprise.

In addition, we intend to enter into separate indemnification agreements with our directors and certain officers. Each indemnification agreement will provide, among other things, for indemnification to the fullest extent permitted by law and our Bylaws against any and all expenses, judgments, fines, penalties and amounts paid in settlement of any claim. The indemnification agreements will provide for the advancement or payment of all expenses to the indemnitee and for the reimbursement to us if it is found that such indemnitee is not entitled to such indemnification under applicable law and our Bylaws.

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**PRINCIPAL SHAREHOLDERS**

**Security Ownership of Certain Beneficial Owners and Management**

The following table sets forth the beneficial ownership of our common stock that, upon the consummation of the direct listing, will be owned by:

● each shareholder who is known to us to own beneficially 5% or more of our outstanding common stock;

● each of our directors;

● each of our named executive officers;

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

● the Registered Shareholders.

The shareholders include substantially all holders of our common stock, including (i) affiliates of the Company and certain other shareholders with "restricted securities" (as defined in Rule 144 under the Securities Act) who, because of their status as affiliates pursuant to Rule 144 or because they acquired their common stock from an affiliate or the Company within the prior 12 months, would be unable to sell their securities pursuant to Rule 144 until the Company has been subject to the reporting requirements of Section 13 or Section 15(d) the Exchange Act for a period of at least 90 days and (ii) our employees. The shareholders may, or may not, elect to sell their common stock through transactions on Nasdaq at prevailing market prices. As such, the Company will have no input if and when any shareholder may, or may not, elect to sell their common stock or the prices at which any such sales may occur. See "*Plan of Distribution*."

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

The shareholders (other than ATW AI Opportunities LLC) are not entitled to any registration rights with respect to the common stock. However, we currently intend to use our reasonable efforts to keep the registration statement effective for a period of 90 days after the effectiveness of the registration statement. We are not party to any arrangement with any shareholder or any broker-dealer with respect to sales of common stock by the shareholders. See "*Plan of Distribution*."

Under the terms of the ATW Notes, ATW AI Opportunities LLC may not convert the ATW Notes to the extent (but only to the extent) ATW AI Opportunities LLC or any of its affiliates would beneficially own a number of shares of our common stock which would exceed 4.99% (the "Maximum Percentage") of the outstanding shares of the Company. The number of shares below reflect these limitations.

The amounts and percentage of shares of common stock beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. Under the rules of the SEC, a person is deemed to be a "beneficial owner" of a security if that person has or shares "voting power," which includes the power to vote or to direct the voting of such security, or "investment power," which includes the power to dispose of or to direct the disposition of such security. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, common stock subject to options, warrants or other securities convertible into common stock held by that person that are currently exercisable or exercisable within 60 days of the date of this prospectus, if any, are deemed outstanding for computing the percentage of the class beneficially owned by the person holding such securities, but are not deemed outstanding for computing the percentage ownership of any other person. Except as indicated by footnote, the persons named in the table below have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable.

Other than described below under "*Material Relationships Between Selling Shareholders and QumulusAI*" and in the sections titled "*Management*" and "*Certain Relationships and Related Party Transactions,*" the shareholders have not, nor have they within the past three years had, any position, office, or other material relationship with us, other than as disclosed in this prospectus. The business address of each shareholder is c/o QumulusAI, Inc., 1130 Powers Ferry Pl SE, Marietta, Georgia 30067, unless otherwise indicated below.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Title of Class**  | **Name and Address of Beneficial Owner**  | **Amount and** <br> **Nature of** <br> **Beneficial** <br> **Ownership<sup>(1)</sup>**  | **Percent of** <br> **Class<sup>(2)</sup>**  | **Percent of** <br> **Class<sup>(2)</sup>**  | **Shares of** <br> **Common** <br> **Stock Being** <br> **Registered**  |
| **Greater than 5% Shareholders:**  | **Greater than 5% Shareholders:**  |  |  |  |  |
| Common Stock  | Robert C. Bissell<sup>(3)</sup>  | 5858484 |  | 17.92% | 5858484 |
| Common Stock  | Houston Aderhold<sup>(4)</sup>  | 5677512 |  | 17.37% | 5677512 |
| Common Stock | Alder Opportunity LP<sup>(5)</sup> |  |  |  |  |
|  | 3600 Dallas Highway, Suite 230-350 |  |  |  |  |
|  | Marietta, Georgia 30064  | 1856079 |  | 5.68% | 1856079 |
| Common Stock | Focus Partners, GP<sup>(6)</sup> |  |  |  |  |
|  | 3535 Piedmont Road NE |  |  |  |  |
|  | Building 14, 5<sup>th</sup> Floor |  |  |  |  |
|  | Atlanta, Georgia 30305  | 1804650 |  | 5.52% | 1804650 |
| **Directors and Officers:** | **Directors and Officers:** |  |  |  |  |
| Common Stock  | Houston Aderhold<sup>(4)</sup>  | 5677512 |  | 17.37% | 5677512 |
| Common Stock | Homaira Akbari |  |  |  |  |
| Common Stock | Robert C. Bissell<sup>(3)</sup> | 5858484 |  | 17.92% | 5858484 |
| Common Stock | Ankur Chatterjee<sup>(7)</sup> | 270421 |  | \* | 28811 |
| Common Stock  | Michael Maniscalco  | —  | —  | —  | —  |
| Common Stock  | Patrick Gahan<sup>(8)</sup>  | 720987 |  | 2.20% | 672193 |
| Common Stock  | Stacy Kenworthy  | 13334 |  | \* | 13334 |
| Common Stock | Scott Krosnowski | 267360 |  | \* | 33334 |
| Common Stock  | Michael Mulica  | 4630 |  | \* | 4630 |
| Common Stock  | David Rench<sup>(9)</sup>  | 47000 |  | \* | 47000 |
| Common Stock  | Barry Schwartz<sup>(10)</sup>  | 86397 |  | \* | 85186 |
| Common Stock  | ***All current directors and executive officers as a group (12 persons)***<sup>(11)</sup>  | 1752703 |  | 5.26% | 1142327 |
| **Other:**  |  |  |  |  |  |
| Common Stock  | Current Employees (excluding employees listed above), Advisory Board Members, Consultants and Service Providers  | 1137070 |  | 3.44% | 733704 |
| Common Stock  | Chardan Capital Markets LLC  | 1140930 |  | 3.49% | 1140930 |
| Common Stock  | ATW AI Opportunities LLC<sup>(12)</sup>  | 1717022 |  | 4.99% | 4480043 |
| Common Stock  | All Other Shareholders  | 15398723 | 45.80 | 45.80% | 14466873 |
| Common Stock  | ***Total Number of Shares Being Registered***  | 37172292 |  | 100.00% | 37172292 |

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\* Less than 1% of outstanding shares of common stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Includes for the persons listed below the following shares subject to warrants and options held by that person that are currently exercisable or become exercisable within 60 days of [•], 2026.

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| | | |
|:---|:---|:---|
| **Name**  | **Warrants**  | **Options**  |
| Alder Opportunity LP  | 0 | 0 |
| Focus Partners, GP  | 0 | 0 |
| Houston Aderhold | 0 | 0 |
| Homaira Akbari | 0 | 0 |
| Robert C. Bissell  | 0 | 0 |
| Ankur Chatterjee  | 0 | 241610 |
| Michael Maniscalco  | 0 | 0 |
| Patrick Gahan  | 4440 | 44354 |
| Stacy Kenworthy  | 0 | 0 |
| Scott Krosnowski | 0 | 234026 |
| Michael Mulica  | 0 | 0 |
| David Rench  | 0 | 0 |
| Barry Schwartz  | 0 | 1211 |
| ***All current directors and executive officers as a group (12 persons)***<sup>(11)</sup>  | 58282 | 552094 |
| Current Employees (excluding employees listed above), Advisory Board Members, Consultants and Service Providers | 64362  | 339004  |
| All Other Shareholders  | 640914 | 290936 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Percent of class is based on 32,692,249 shares of our common stock outstanding as of [•], 2026.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Mr. Bissell beneficially owns 4,101,909 shares through Gratus Holdings, LLC and 316,919 shares through Chalin, Inc., over which he has sole voting and investment power. He beneficially owns 1,439,656 shares individually.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Mr. Aderhold beneficially owns 96,293 shares through MHA Technologies LLC, over which he has sole voting and investment power. He beneficially owns 5,581,219 shares individually.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Includes 1,856,079 shares held of record by Alder Opportunity, LP, in which he serves as a manager and has sole voting and investment power. Craig Heiser, manager of Alder Opportunity, LP, exercises voting and investment control over the shares beneficially owned by Alder Opportunity, LP and disclaims beneficial ownership of such shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) Includes 838,229 shares held of record by Trailhead Growth, LP and 966,421 shares held of record by Trailhead Income, LP. PPB Trailhead Growth Mgt LLC is the general partner of Trailhead Growth, LP and PPB Trailhead Mgt., LLC is the general partner of Trailhead Income, LP (collectively, the "Trailhead General Partners"). By virtue of such relationships, the Trailhead General Partners may be deemed to have voting and investment power with respect to the securities held by Trailhead Growth, LP and Trailhead Income, LP as noted above and as a result may be deemed to have beneficial ownership over such securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) Mr. Chatterjee beneficially owns 28,811 shares through Kesston Group, LLC, over which he has sole voting and investment power. He beneficially owns 241,610 options individually.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) Mr. Gahan and his wife hold 103,488 shares, warrants to purchase 1,595 shares, and options to purchase 182 shares through Slim Mint Group LLC and 212,394 shares, warrants to purchase 2,845 shares and options to purchase 182 shares through Window Macaroni Group LLC. Mr. Gahan holds 39,757 shares through Gahan LTC SPE, LLC, over which he has sole voting and investment power. His children hold a total of 11,926 shares. Mr. Gahan holds 19,765 shares in his trust. He beneficially owns 284,863 shares and 43,990 options individually.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) Mr. Rench and his wife hold 47,000 shares through WOOO-YES! LP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) Mr. Schwartz beneficially owns 85,186 shares and options that may be exercised for 1,211 shares through his living trust.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11) Includes current directors (Michael Maniscalco (who also serves as our Chief Executive Officer), Homaira Akbari, Patrick Gahan, Stacy Kenworthy, Michael Mulica, David Rench, Barry Schwartz) and our current executive officers (Ankur Chatterjee, Ryan DiRocco, Steve Gertz, Stephen Hunton, Scott Krosnowski). Due to changes in our slate of executive officers, this group differs from the 2025 named executive officers included in the tables above pursuant to Item 403(b) of Regulation S-K.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12) For the purposes of the calculations of the shares to be sold by ATW AI Opportunities LLC pursuant to the prospectus, we have assumed (a) no event of default has occurred under the ATW Notes, (b) all ATW Notes are converted in full at a conversion price of $11.50 without regard to any limitations set forth therein, and (c) interest on the ATW Notes has accrued through March 26, 2028, and is paid in shares of common stock, at an interest rate of 7%. This row represents the amount of shares that will be held by the selling shareholder after completion of this offering based on the assumptions that (a) all shares underlying the Initial ATW Notes registered for sale by the registration statement of which this prospectus is a part will be sold and (b) no other shares are acquired or sold by such selling shareholder prior to completion of this offering. However, the selling shareholder may sell all, some or none of such shares offered pursuant to this prospectus and may sell other shares that it may own pursuant to another registration statement under the Securities Act or sell some or all of its shares pursuant to an exemption from the registration provisions of the Securities Act, including under Rule 144. This row also lists the number of shares of common stock beneficially owned by this selling shareholder, as of the date of the prospectus, after giving effect to the Maximum Percentage (as defined in the paragraph above). Without regard to the Maximum Percentage, as of the date of the prospectus, this selling shareholder would beneficially own an aggregate of 4,480,043 shares of common stock, consisting of 4,480,043 shares of common stock underlying the ATW Notes held by this selling shareholder, determined as if the ATW Notes (including interest on the ATW Notes through March 26, 2028) were converted in full (without regard to any limitations on conversion contained therein solely for the purpose of such calculation) at the conversion price of $11.50, all of which shares are being registered for resale under this prospectus. The ATW Notes are directly held by ATW AI Opportunities LLC, which is wholly owned by ATW Master Fund V LP (the "Fund"), and may be deemed to be beneficially owned by: (i) ATW Partners Opportunities Management LLC, which serves as the investment manager of the Fund; and (ii) Antonio Ruiz-Gimenez and Kerry Propper, who serve as the managing members of the investment manager (the selling shareholder and Fund, together with (i) and (ii), the "Reporting Persons"). While the Reporting Persons may be deemed to have shared voting and dispositive power with respect to the securities beneficially owned by the selling shareholder, each of the Reporting Persons disclaim beneficial ownership of the Company's securities reported herein. The address of ATW AI Opportunities LLC is c/o ATW Partners Opportunities Management, LLC, 1 Pennsylvania Plaza, Suite 4810, New York, NY 10119.

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**Material Relationships Between Selling Shareholders and QumulusAI**

Craig Heiser serves as a manager of ALDER Opportunity, LP and related Alder Entities have entered into transactions with the Company, as described above under "*Certain Relationships and Related Party Transactions*."

The following shareholders are also members of ALDER Opportunity, LP; ALDER Opportunity II, LLC; and ALDER Funding Partners as well as Alder Technology Funding Partner, LLC; Fluent ATFP, LLC; and SGCA ATFP, LLC: Brad Noonan, Suketu Sonecha, Jonathan Lyman, Tom Rainey, Ankur Chatterjee, Patrick Gahan, and Lisa Kolb. Steve Gertz is also a member of Fluent ATFP, LLC.

Focus Partners, GP is the general partner of Trailhead Growth, LP, Trailhead Income, LP, and GC Opportunities 2 Private Fund, LP. Each of these entities has made certain investments in the Company, as described above under "*Certain Relationships and Related Party Transactions*." In connection with these investments and among certain other rights and preferences included in the Company's Second Amended and Restated Articles of Incorporation (which have been amended and restated to, among other things, eliminate these rights and preferences) and the Company's Bylaws (which will be amended and restated in connection with the direct listing to, among other things, eliminate these rights and preferences), the Company agreed to designate a Series A Preferred Stock Board seat and appointed Todd Jones as a director. Mr. Jones resigned from the Board in September 2025.

Robert C. Bissell currently serves as our Advisory Board Chairman, previously served as our President from January 2025 to September 2025, and previously served as the Chief Executive Officer of WAHA, and subsequently GDH, from July 2019 to January 2025. Mr. Bissell served on the Board and as the Chairman of our Advisory Board. For additional details regarding certain related party transactions Mr. Bissell is party to directly or indirectly, see "*Certain Relationships and Related Party Transactions*."

Houston Aderhold served as our Executive Vice President of Infrastructure and Construction from September 2019 to September 2025. Mr. Aderhold currently serves as our Senior Vice President – Blockchain Core Infrastructure. Mr. Aderhold additionally served as the Assistant Chairman of our Board until September 2025. For additional details regarding certain related party transactions Mr. Bissell is party to directly or indirectly, see "*Certain Relationships and Related Party Transactions*."

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**DESCRIPTION OF SECURITIES**

The following description, together with the additional information we include in any applicable prospectus supplement, summarizes the material terms and provisions of our common stock and does not purport to be complete. It is subject to and qualified in its entirety by reference to the provisions of our Second Amended and Restated Articles of Incorporation, which we intend to adopt in connection with the direct listing, and our Amended and Restated Bylaws, which we have adopted in connection with the direct listing, and each of which are filed as exhibits to the registration statement that includes this prospectus and are incorporated by reference herein. We encourage you to read our Second Amended and Restated Articles of Incorporation (the "Charter"), which we intend to adopt in connection with the direct listing, Bylaws, and the applicable provisions of the Georgia Business Corporation Code ("GBCC") for additional information.

**Authorized and Outstanding Capital Stock**

Our Charter will provide that we have authority to issue 1,000,000,000 shares of common stock, 31,551,319 of which were issued and outstanding as of April 27, 2026, and 100,000,000 shares of preferred stock, no par value per share ("preferred stock"), none of which are issued and outstanding as of March 31, 2026. As of March 31, 2026, in the aggregate, we had outstanding warrants to purchase 763,558 shares of our common stock. In addition, we had outstanding stock options to purchase 1,182,034 shares of our common stock under the 2022 Plan, and, once effective, 4,770,000 shares available for issuance under the 2026 Plan.

We may amend from time to time our Charter to increase the number of authorized shares of common stock. Any such amendment would require the approval of the holders of two-thirds of the voting power of the shares entitled to vote generally in the election of directors.

**Common Stock**

***Voting Rights***

Each holder of our common stock is entitled to one vote per share on each matter submitted to a vote at a meeting of shareholders, including in all elections of directors. Shareholders are not entitled to cumulative voting in the election of directors. Subject to applicable law and the rights of the holders of outstanding shares of any series of preferred stock, holders of our common stock are entitled to vote on all matters on which shareholders are generally entitled to vote.

Our shareholders may vote either in person or by proxy. At all meetings of shareholders for the election of directors at which a quorum is present, a plurality of the votes cast shall be sufficient to elect. All other elections and questions presented to the shareholders at a meeting at which a quorum is present shall, unless otherwise provided by our Charter, our Bylaws, the rules or regulations of any stock exchange applicable to us or applicable law or pursuant to any regulation applicable to us or our securities, be decided by the affirmative vote of the holders of a majority of the shares of stock present in person or represented by proxy at a meeting at which a quorum is present. The affirmative vote of the holders of at least two-thirds of all the votes entitled to be cast by shareholders generally in the election of directors voting together as a single voting group is required to remove directors and to alter, amend or repeal any provision of the Bylaws.

***Dividends***

The Board may declare and pay dividends upon the outstanding shares of stock of the Company, subject to any restriction in our Charter and to those limitations prescribed by law and contractual restrictions. The holders of our common stock will be entitled to share ratably in any dividends that the Board may determine to issue from time to time.

***Liquidation Rights***

Upon liquidation, dissolution or winding up, all holders of our common stock are entitled to share ratably in our assets available for distribution, subject to applicable law.

***Other Rights and Preferences***

Under the terms of our Charter and Bylaws, holders of our common stock have no preemptive rights, conversion rights or subscription rights, and there are no redemption or sinking fund provisions applicable to our common stock. Our Charter and Bylaws do not restrict the ability of a holder of our common stock to transfer his, her or its shares of common stock. All shares of our common stock currently outstanding are fully paid and non-assessable.

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***Transfer Agent***

The transfer agent for our common stock is Continental Stock Transfer & Trust Company.

***Exchange Listing***

We will apply to list our common stock on the Nasdaq Global Market under the symbol "QMLS."

**Anti-Takeover Effects of Certain Provisions of our Charter and Bylaws** 

Anti-takeover provisions in our Charter and Bylaws may have the effect of delaying, deferring or preventing a change in control of the Company, even if such a change in control could be beneficial to our shareholders. These provisions include the following:

● We have shares of common stock and preferred stock available for issuance without shareholder approval. Our preferred stock may be created and issued from time to time in one or more series, with such voting powers, full or limited, or no voting powers, and such designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, as shall be stated and expressed in the resolution or resolutions providing for the issue of such stock adopted by the Board pursuant to authority to do so vested in the Board. The existence of unissued and unreserved common stock and preferred stock may enable the Board to issue shares to persons friendly to current management or to issue preferred stock with terms that could render more difficult or discourage a third-party attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise, thereby protecting the continuity of our management.

● Shares of our common stock do not have cumulative voting rights in the election of directors, so our shareholders holding a majority of the shares of common stock outstanding will be able to elect all of our directors

● The Board may alter, amend or repeal the Bylaws.

● The affirmative vote of the holders of at least two-thirds of all the votes entitled to be cast by shareholders generally in the election of directors voting together as a single voting group is required to remove directors and to alter, amend or repeal any provision of the Bylaws.

● Special meetings of shareholders may be called only by the Board, the Chairman of the Board, by the Chief Executive Officer, by the President or upon a resolution or affirmative vote of the Board.

● The chair of any meeting of shareholders shall have the right and authority to convene and (for any or no reason) to recess, adjourn and/or postpone the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chair, are appropriate for the proper conduct of the meeting.

● Shareholders must follow advance notice procedures to submit nominations of candidates for election to the Board at an annual or special meeting of our shareholders, including director election contests subject to the SEC's universal proxy rules, and must follow advance notice procedures to submit other proposals for business to be brought before an annual meeting or special meeting of our shareholders.

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● The Board may fill any vacancies and newly created directorships resulting from any increased in the authorized number of directors by a majority vote, even if such majority vote is less than a quorum.

● Unless we consent in writing to an alternative forum, a state court located within the State of Georgia or, if no state court located within the State of Georgia has subject matter jurisdiction, the federal district court for the Northern District of Georgia, will be the exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee to us or our shareholders, (iii) any action asserting a claim arising under any provision of the GBCC, our Charter or our Bylaws, or (iv) any action asserting a claim governed by the internal-affairs doctrine; provided, however, that unless we consent in writing to an alternative forum, the federal district courts of the United States of America shall be, to the fullest extent permitted by applicable law, the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.

● The Company is governed by the requirements of Article 11A of the GBCC, which imposes certain limitations on business combinations with interested shareholders.

**Limitations of Liability and Indemnification Matters**

Our Charter provides that a director of the Company shall not be personally liable to the Company or its shareholders for monetary damages for breach of duty of care or other duty as a director, except for liability (i) for any appropriate, in violation of his duties, of any business opportunity of the Company, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) of the types set forth in Section 14-2-832 of the GBCC, or (iv) for any transaction from which the director derived an improper personal benefit. Our Bylaws provide that any person, their heirs, executors, or administrators, may be indemnified or reimbursed by the Company to the fullest extent of the GBCC for reasonable expenses actually incurred in connection with any action, suit or proceeding, civil or criminal, to which such person shall be made a party by reason of the fact that such person is or was a director, trustee, officer, employee, or agent of the Company, or that such person is or was serving, at the request of the Company, as a director, trustee, officer, employee, or agent of any other enterprise.

This limitation of liability does not apply to liabilities arising under the federal securities laws and does not affect the availability of equitable remedies such as injunctive relief or rescission. If Georgia law is amended to authorize the further elimination or limiting of director or officer liability, then the liability of our directors and/or officers will be eliminated or limited to the fullest extent permitted by Georgia law as so amended.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, the opinion of the SEC is that such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

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**PLAN OF DISTRIBUTION**

The shares covered in this registration statement represent 100% of the Company's currently issued and outstanding common stock. Subject to the restrictions described below, all such shares being registered under this prospectus may be freely sold upon effectiveness of this registration statement, and the shares of common stock beneficially owned by the Registered Shareholders covered by this prospectus may be offered and sold from time to time by the Registered Shareholders. The term "Registered Shareholders" includes donees, pledgees, transferees or other successors in interest selling securities received after the date of this prospectus from a Registered Shareholder as a gift, pledge, partnership distribution or other transfer. We will not receive any of the proceeds from the sale of the securities by the Registered Shareholders. Neither we nor the Registered Shareholders (except Chardan) will be involved in Nasdaq's price-setting mechanism, including any decision to delay or proceed with trading, nor will these parties control or influence Chardan in carrying out its role as a financial adviser. We will not be involved in the price setting process. Additionally, the price of our shares in prior private transactions may have little or no relation to the opening price and subsequent public price of our stock on Nasdaq. The Registered Shareholders will act independently of us in making decisions with respect to the timing, manner and size of each sale. The Registered Shareholders may offer, sell or distribute all or a portion of the securities hereby registered publicly at prevailing market prices. Other than as described below, we are not party to any arrangement with any Registered Shareholder or any broker-dealer with respect to sales of shares of common stock by the Registered Shareholders. As such, we do not anticipate receiving notice as to if and when any Registered Shareholder may, or may not, elect to sell their shares of common stock or the prices at which any such sales may occur, and there can be no assurance that any Registered Shareholders will sell any or all of the shares of common stock covered by this prospectus.

Our directors, officers and greater than 10% shareholders have entered into contractual lock-up agreements with respect to an aggregate of 12,678,323 shares of common stock, plus 610,376 shares of common stock underlying options and warrants. Pursuant to the lock-up agreements, signatories irrevocably agree that, from the date thereof until 180 days following the date the common stock is first listed for trading on the Nasdaq Global Market in connection with the direct listing, the signatory will not offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of any common stock or securities convertible, exchangeable or exercisable into shares of common stock beneficially owned, held or acquired by the signatory. Substantially all of the remaining shares may be immediately sold either by the Registered Shareholders pursuant to this prospectus or by our other existing shareholders under Rule 144 since such common stock will have been beneficially owned by non-affiliates who beneficially owned such common stock for at least one year. Moreover, once we have been a reporting company subject to the reporting requirements of Section 13 or Section 15(d) of the Exchange Act for 90 days and assuming the availability of certain public information about us, (i) a non-affiliate who has beneficially owned common stock for at least six months may rely on Rule 144 to sell their common stock, and (ii) an affiliate who has beneficially owned common stock for at least six months, including certain of the common stock covered by this prospectus to the extent not sold hereunder, would be entitled to sell within any three-month period a number of shares of common stock that does not exceed the greater of either of the following: (a) 1% of the number of common stock then outstanding, and (b) the average weekly reported volume of trading of our common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.

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

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

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

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

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

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

Chardan will determine when our shares of common stock are ready to trade and approve proceeding at the Current Reference Price primarily based on considerations of volume, timing and price. In particular, Chardan will determine, based primarily on pre-opening buy and sell orders, when a reasonable amount of volume will cross on the opening trade such that sufficient price discovery has been made to open trading at the Current Reference Price. If Chardan does not approve proceeding at the Current Reference Price (for example, due to the absence of adequate pre-opening buy and sell interest), Chardan will request that Nasdaq delay the opening until such a time that sufficient price discovery has been made to ensure that a reasonable amount of volume crosses on the opening trade. Further, in the highly unlikely event that Nasdaq consults with Chardan as described in clause (iv) of the definition of Current Reference Price, Chardan would request that Nasdaq delay the opening to ensure a single opening price within clauses (i), (ii) or (iii) of the definition of the Current Reference Price. Neither we nor the Registered Shareholders (except Chardan) will be involved in Nasdaq's price-setting mechanism, and these parties will not coordinate or be in communication with Chardan including with respect to any decision by Chardan to delay or proceed with trading.

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

In connection with our listing, we will issue approximately 1,140,930 shares of our common stock to Chardan in connection with the engagement of Chardan as our financial advisor for this direct listing and have agreed to register such shares pursuant to this prospectus. Chardan will be involved in Nasdaq's price-setting mechanism, including any decision to delay or proceed with trading. While we have engaged an independent valuation agent as required by applicable Nasdaq listing rules, Chardan's dual role as our financial advisor that will be involved in Nasdaq's price-setting mechanism and a Registered Stockholder whose shares are being registered for resale under this registration statement may create a conflict of interest as Chardan's interests may differ from those of our other shareholders.

Pursuant to the terms of our engagement with Chardan, for a period of 12 months beginning on the date this registration statement is effective, we have granted Chardan the right of first refusal to act as exclusive underwriter and book running manager, exclusive placement or sales agent, or our exclusive advisor, as applicable, in connection with any and all public offerings of our securities on a US stock exchange, private placement of our securities or other such financing during such 12 month period. Such right of first refusal is subject to our termination of our engagement with Chardan for gross negligence, willful misconduct or an uncured material breach of our engagement with Chardan.

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

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

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

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

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

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

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

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

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**SHARES ELIGIBLE FOR FUTURE SALE**

Prior to the listing of our common stock on Nasdaq, there has been no public market for our common stock. Sales of a substantial number of shares our common stock in the public market following our listing on Nasdaq, or the perception that such sales could occur, could adversely affect the public price of our common stock and may make it more difficult for you to sell your shares at a time and price that you deem appropriate. We will have no input if and when any shareholders may, or may not, elect to sell their shares or the prices at which any such sales may occur.

Upon our registration, a total of 32,692,249 shares of common stock will be outstanding, and 37,172,292 shares will be registered under this registration statement, constituting substantially all of our outstanding shares of common stock. Any shares not registered hereunder will be "restricted securities," as that term is defined in Rule 144 under the Securities Act. These restricted securities are eligible for public sale only if they are registered under the Securities Act, including, but not limited to, the shares registered hereunder, or if they qualify for an exemption from registration, including under Rules 144 or 701 under the Securities Act, which are summarized below. Restricted securities also may be sold outside of the United States to non-U.S. persons in accordance with Rule 904 of Regulation S. With the exception of shares owned by our directors, officers and certain shareholders, substantially all of our common stock may be sold after our initial listing on Nasdaq, either by the Registered Shareholders pursuant to this prospectus or by our other existing shareholders in accordance with Rule 144 of the Securities Act.

**Rule 144**

In general, under Rule 144 as currently in effect, once we have been subject to and in compliance with public company reporting requirements of Section 13 or Section 15(d) of the Exchange Act for at least 90 days, an eligible shareholder is entitled to sell such shares without complying with the manner of sale, volume limitation, or notice provisions of Rule 144, subject to compliance with the public information requirements of Rule 144. To be an eligible shareholder under Rule 144, such shareholder must not be deemed to have been one of our affiliates for purposes of the Securities Act at any time during the 90 days preceding a sale and who has beneficially owned the shares of common stock proposed to be sold for at least six months, including the holding period of any prior owner other than our affiliates. If such a person has beneficially owned the shares of common stock proposed to be sold for at least one year, including the holding period of any prior owner other than our affiliates, then such person is entitled to sell such shares without complying with any of the requirements of Rule 144.

In general, under Rule 144, as currently in effect, our affiliates or persons selling common stock on behalf of our affiliates are entitled to sell shares 90 days after we become a reporting company. Within any three-month period, such shareholders may sell a number of shares that does not exceed the greater of:

● 1% of the number of shares of common stock then outstanding, which will equal approximately shares immediately after our registration; or

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

Sales under Rule 144 by our affiliates or persons selling shares of common stock on behalf of our affiliates also are subject to certain manner of sale provisions and notice requirements and to the availability of current public information about us.

As described herein, substantially all of our outstanding shares of our common stock will be registered under this registration statement and need not be sold under Rule 144.

**Rule 701**

Rule 701 generally allows a shareholder who was issued shares under a written compensatory plan or contract and who is not deemed to have been an affiliate of our Company during the immediately preceding 90 days, to sell these shares in reliance on Rule 144, but without being required to comply with the public information, holding period, volume limitation, or notice provisions of Rule 144. Rule 701 also permits affiliates of our Company to sell their Rule 701 shares under Rule 144 without complying with the holding period requirements of Rule 144. All holders of Rule 701 shares, however, are required by that rule to wait until 90 days after we become a reporting company before selling those shares under Rule 701.

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As described herein, substantially all of our outstanding shares of our common stock will be registered under this registration statement and need not be sold under Rule 701.

**Registration Statements on Form S-8**

We intend to file one or more registration statements on Form S-8 under the Securities Act to register shares of our common stock subject to outstanding stock options under the 2022 Plan and shares of our common stock reserved for issuance under the 2026 Plan as soon as permitted under the Securities Act. Such registration statements will automatically become effective upon filing with the SEC. However, shares registered on Form S-8 may be subject to the volume limitations and the manner of sale, notice, and public information requirements of Rule 144.

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**SALE PRICE HISTORY OF COMMON STOCK**

We intend to apply to list our common stock on Nasdaq. Prior to the initial listing, no public market existed for our common stock. Our common stock has a limited history of trading in private transactions. Most recently, beginning in March 2026, we issued shares of our common stock to investors in a private placement at a price of $23.15 per share. While Chardan is expected to consider this price in connection with setting the opening public price of our common stock, this information may have little or no relation to broader market demand for our common stock and thus the opening public price and subsequent public price of our common stock on Nasdaq. As a result, you should not place undue reliance on this historical private sale price as it may differ materially from the opening public price and subsequent public price of our common stock on Nasdaq. See "*Risk Factors*—*Risks Related to this Direct Listing and Ownership of Our Common Stock*."

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

The following discussion is a summary of the material U.S. federal income tax considerations applicable to Non-U.S. Holders (as defined below) with respect to their acquisition, ownership and disposition of shares of our common stock issued pursuant to this direct listing. This summary does not provide a complete analysis of all potential U.S. federal income tax considerations relating thereto. The information provided below is based upon provisions of the U.S. Internal Revenue Code of 1986, as amended (the "Code"), Treasury regulations promulgated thereunder, administrative rulings, and judicial decisions currently in effect. These authorities may change at any time, possibly retroactively, or the Internal Revenue Service (the "IRS") might interpret the existing authorities differently. In either case, the tax considerations of owning or disposing of our common stock could differ from those described below. As a result, we cannot assure you that the tax consequences described in this discussion will not be challenged by the IRS or will be sustained by a court if challenged by the IRS.

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

● banks, insurance companies or other financial institutions;

● partnerships or entities or arrangements treated as partnerships or other pass-through entities for U.S. federal tax purposes (or investors in such entities);

● corporations that accumulate earnings to avoid U.S. federal income tax;

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

● tax-exempt organizations or tax-qualified retirement plans;

● controlled foreign corporations or passive foreign investment companies;

● dealers in securities or currencies;

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

● persons that own, or are deemed to own, more than 5% of our capital stock (except to the extent specifically set forth below);

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

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

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

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

In addition, if a partnership or entity classified as a partnership for U.S. federal income tax purposes is a beneficial owner of our common stock, the tax treatment of a partner in the partnership or an owner of the entity will depend upon the status of the partner or other owner and the activities of the partnership or other entity. Accordingly, this summary does not address tax considerations applicable to partnerships that hold our common stock, and partners in such partnerships should consult their tax advisors.

INVESTORS CONSIDERING THE PURCHASE OF OUR COMMON STOCK SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OF THE U.S. FEDERAL INCOME AND ESTATE TAX LAWS TO THEIR PARTICULAR SITUATIONS AND THE CONSEQUENCES OF FOREIGN, STATE OR LOCAL LAWS, AND TAX TREATIES.

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

For purposes of this summary, a Non-U.S. Holder is any beneficial owner of our common stock, other than a partnership, that is not:

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

● a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized under the laws of the United States, any state therein or the District of Columbia;

● a trust if it (i) is subject to the primary supervision of a U.S. court and one of more U.S. persons have authority to control all substantial decisions of the trust or (ii) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person; or

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● an estate whose income is subject to U.S. income tax regardless of source.

If you are a non-U.S. citizen that is an individual, you may, in many cases, be treated as a resident alien, as opposed to a non-resident alien, by virtue of being present in the United States for at least 31 days in the calendar year and for an aggregate of at least 183 days during a three-year period ending in the current calendar year. For these purposes, all the days present in the current year, one-third of the days present in the immediately preceding year, and one-sixth of the days present in the second preceding year are counted. Resident aliens are subject to U.S. federal income tax as if they were U.S. citizens. Such an individual is urged to consult his or her own tax advisor regarding the U.S. federal income tax consequences of the ownership or disposition of our common stock.

**Dividends**

As discussed under "*Dividend Policy*" above, we do not currently expect to declare or pay dividends to our common shareholders in the foreseeable future. In the event that we do make distributions of cash or other property on our common stock, those distributions will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Amounts not treated as dividends for U.S. federal income tax purposes will constitute a return of capital, which will first reduce a Non-U.S. Holder's adjusted tax basis in shares of our common stock, but not below zero. Any remaining excess will be treated as gain realized on the sale or other disposition of our common stock and will be treated as described below under "⸺*Gain on Sale or Other Taxable Disposition of Our Common Stock*." Any such distribution will also be subject to the tax treatment described below under the heading "*Foreign Account Tax Compliance Act*."

Subject to the discussion below on effectively connected income, dividends paid to a Non-U.S. Holder of our common stock that is not effectively connected with the Non-U.S. Holder's conduct of a trade or business in the United States will generally be subject to U.S. federal withholding tax at a rate of 30% of the gross amount of the dividends (or such lower rate specified by an applicable income tax treaty, provided the Non-U.S. Holder furnishes a properly executed IRS Form W-8BEN or W-8BEN-E (or other applicable or successor form) certifying the Non-U.S. Holder's qualification for the lower treaty rate). A Non-U.S. Holder that does not timely furnish the required documentation, but that qualifies for a reduced treaty rate, may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS. Non-U.S. Holders should consult their tax advisors regarding their entitlement to benefits under any applicable income tax treaty. If the Non-U.S. Holder holds the stock through a financial institution or other agent acting on the holder's behalf, the holder will be required to provide appropriate documentation to the agent. The holder's agent will then be required to provide certification to us or our paying agent, either directly or through other intermediaries. If you are eligible for a reduced rate of U.S. federal withholding tax under an income tax treaty, you may obtain a refund or credit of any excess amounts withheld by filing an appropriate claim for a refund with the IRS in a timely manner.

If dividends paid to a Non-U.S. Holder are effectively connected with the Non-U.S. Holder's conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, are attributable to a permanent establishment or fixed base maintained by the Non-U.S. Holder in the United States), the Non-U.S. Holder will be exempt from the U.S. federal withholding tax described above. To claim the exemption, the Non-U.S. Holder must furnish to the applicable withholding agent a valid IRS Form W-8ECI, certifying that the dividends are effectively connected with the Non-U.S. Holder's conduct of a trade or business within the United States.

Any such effectively connected dividends will be subject to U.S. federal income tax on a net income basis at the regular rates. A Non-U.S. Holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on such effectively connected dividends, as adjusted for certain items. Non-U.S. Holders should consult their tax advisors regarding any applicable tax treaties that may provide for different rules.

**Gain on Sale or Other Taxable Disposition of Our Common Stock** 

Subject to the discussion below under "⸺*Information Reporting and Backup Withholding*" and "⸺*Foreign Account Tax Compliance Act*," a Non-U.S. Holder will generally not be subject to U.S. federal income tax on any gain realized upon the sale, exchange, or other taxable disposition of our common stock unless:

● the gain (i) is effectively connected with the conduct by the Non-U.S. Holder of a U.S. trade or business, and (ii) if required by an applicable income tax treaty between the United States and the Non-U.S. holder's country of residence, is attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States (in which the special rules described below apply);

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● the Non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year of the sale, exchange or other disposition of our common stock, and certain other requirements are met (in which case the gain would be subject to a flat 30% tax, or such reduced rate as may be specified by an applicable income tax treaty, which may be offset by certain U.S. source capital losses, even though the individual is not considered a resident of the United States); or

● the rules of the Foreign Investment in Real Property Tax Act ("FIRPTA") treat the stock as a "U.S. real property interest" as defined in Section 897 of the Code.

The FIRPTA rules may apply to a sale, exchange or other disposition of our Common Stock if we are, or were within the shorter of the five-year period preceding the disposition and the Non-U.S. Holder's holding period, a "U.S. real property holding corporation" (a "USRPHC"), as defined in Section 897 of the Code. In general, we would be a USRPHC if interests in U.S. real estate comprised at least half of the value of our business assets. We do not believe that we are a USRPHC and we do not anticipate becoming one in the future. Even if we become a USRPHC, as long as our common stock is regularly traded on an established securities market, such common stock will be treated as U.S. real property interests only if beneficially owned by a Non-U.S. Holder that actually or constructively owned more than 5% of our outstanding common stock at sometime within the five-year period preceding the disposition.

If any gain from the sale, exchange or other disposition of our common stock (1) is effectively connected with a U.S. trade or business conducted by a Non-U.S. Holder, and (2) if required by an applicable income tax treaty between the United States and the Non-U.S. Holder's country of residence, is attributable to a permanent establishment maintained by such Non-U.S. Holder in the United States, then the gain generally will be subject to U.S. federal income tax at the same graduated rates applicable to U.S. persons, net of certain deductions and credits. If the Non-U.S. Holder is a corporation, under certain circumstances, that portion of its earnings and profits that is effectively connected with its U.S. trade or business, subject to certain adjustments, generally would be subject also to a "branch profits tax." The branch profits tax rate is 30% unless reduced by applicable income tax treaty.

Non-U.S. Holders should consult their tax advisors regarding potentially applicable income tax treaties that may provide for different rules.

**U.S. Federal Estate Tax** 

The estates of non-resident alien individuals generally are subject to U.S. federal estate tax on property with a U.S. situs. Because we are a U.S. corporation, our common stock will be U.S. situs property and therefore will be included in the taxable estate of a non-resident alien decedent, unless an applicable estate tax treaty between the United States and the decedent's country of residence provides otherwise.

**Informational Reporting and Backup Withholding** 

The Code and the Treasury regulations require those who make specified payments to report the payments to the IRS. Among the specified payments are dividends and proceeds paid by brokers to their customers. The required information returns enable the IRS to determine whether the recipient properly included the payments in income. This reporting regime is reinforced by "backup withholding" rules. These rules require the payors to withhold tax from payments subject to information reporting if the recipient fails to cooperate with the reporting regime by failing to provide his taxpayer identification number to the payor, furnishing an incorrect identification number, or failing to report interest or dividends on his returns. The backup withholding tax rate is currently 24%. The backup withholding rules do not apply to payments to corporations, whether domestic or foreign, provided they establish such exemption.

Payments to Non-U.S. Holders of dividends on our common stock generally will not be subject to backup withholding, and payments of proceeds made to Non-U.S. Holders by a broker upon a sale of common stock will not be subject to information reporting or backup withholding, in each case so long as the Non-U.S. Holder certifies its status as a Non-U.S. Holder (and we or our paying agent do not have actual knowledge or reason to know the holder is a U.S. person or that the conditions of any other exemption are not, in fact, satisfied) or otherwise establishes an exemption. The certification procedures to claim treaty benefits described under "⸺*Distributions*" will generally satisfy the certification requirements necessary to avoid the backup withholding tax. We must report annually to the IRS any dividends paid to each Non-U.S. Holder and the tax withheld, if any, with respect to these dividends. Copies of these reports may be made available to tax authorities in the country where the Non-U.S. Holder resides. Under the applicable Treasury regulations, information returns are required to be filed with the IRS in connection with any dividends on our common stock paid to a Non-U.S. Holder, regardless of whether any tax was actually withheld. In addition, proceeds of the sale or other taxable disposition of our common stock within the United States or conducted through certain U.S.-related brokers generally will not be subject to backup withholding or information reporting, if the beneficial owner certifies, under penalties of perjury, among other things, its status as a Non-U.S. Holder (and the broker does not have actual knowledge or reason to know the holder is a U.S. person) or otherwise establishes an exemption. The payment of proceeds from the disposition of shares of our common stock by a Non-U.S. Holder made to or through a non-U.S. office of a broker generally will not be subject to backup withholding and information reporting, except as noted below. Information reporting, but not backup withholding, will apply to a payment of proceeds, even if that payment is made outside of the United States, if you sell our common stock through a non-U.S. office of a broker that is:

● a U.S. person (including a foreign branch or office of such person);

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● a "controlled foreign corporation" for U.S. federal income tax purposes;

● a foreign person 50% or more of whose gross income from certain periods is effectively connected with a U.S. trade or business; or

● a foreign partnership if at any time during its tax year (a) one or more of its partners are U.S. persons who, in the aggregate, hold more than 50% of the income or capital interests of the partnership or (b) the foreign partnership is engaged in a U.S. trade or business, unless the broker has documentary evidence that the beneficial owner is a Non-U.S. Holder and certain other conditions are satisfied, or the beneficial owner otherwise establishes an exemption (and the broker has no actual knowledge or reason to know to the contrary).

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a Non-U.S. Holder's U.S. federal income tax liability, provided the required information is timely furnished to the IRS. Non-U.S. holders should consult their own tax advisors regarding the application of the information reporting and backup withholding rules to them.

**Foreign Account Tax Compliance Act** 

Sections 1471 through 1474 of the Code, the U.S. Treasury Regulations promulgated thereunder and other applicable guidance, commonly referred to as "FATCA," generally impose a U.S. federal withholding tax of 30% on dividends on stock in a U.S. corporation paid to (i) a foreign financial institution (as specifically defined by the applicable rules) unless such institution enters into an agreement with the U.S. government to withhold on certain payments and to collect and provide to the U.S. tax authorities substantial information regarding U.S. account holders of such institution (which includes certain equity holders of such institution, as well as certain account holders that are foreign entities with U.S. owners) and (ii) a non-financial foreign entity unless such entity provides the withholding agent with either a certification that it does not have any substantial direct or indirect U.S. owners or provides information regarding direct and indirect U.S. owners of the entity. The 30% federal withholding tax described in this paragraph cannot be reduced under an income tax treaty with the United States or by providing an IRS Form W-8BEN or similar documentation. The withholding tax described above will not apply if the foreign financial institution or non-financial foreign entity otherwise qualifies for an exemption from the rules and certifies as such on a Form W-8BEN-E (or any successor of such form). U.S. Treasury Regulations proposed in December 2018 (and upon which taxpayers and withholding agents are entitled to rely) eliminate possible FATCA withholding on the gross proceeds from any sale or other disposition of shares of stock of a U.S. corporation, previously scheduled to apply beginning January 1, 2019. Under certain circumstances, a Non-U.S. Holder might be eligible for refunds or credits of such taxes. Holders should consult with their own tax advisors regarding the possible implications of the withholding described herein. An intergovernmental agreement between the United States and an applicable foreign country may modify the requirements described in this paragraph.

THE PRECEDING DISCUSSION OF MATERIAL U.S. FEDERAL TAX CONSIDERATIONS IS FOR GENERAL INFORMATION ONLY. IT IS NOT TAX ADVICE. EACH PROSPECTIVE INVESTOR SHOULD CONSULT ITS OWN TAX ADVISOR REGARDING THE PARTICULAR U.S. FEDERAL, STATE, LOCAL, AND FOREIGN TAX CONSEQUENCES OF PURCHASING, HOLDING AND DISPOSING OF OUR COMMON STOCK, INCLUDING THE CONSEQUENCES OF ANY PROPOSED CHANGE IN APPLICABLE LAWS.

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**LEGAL MATTERS**

The validity of the shares of our common stock being offered by this prospectus will be passed upon for us by Fox Rothschild LLP, Minneapolis, Minnesota.

**INTERESTS OF NAMED EXPERTS AND COUNSEL**

No expert or counsel named in this prospectus as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being registered or upon other legal matters in connection with the registration or offering of the securities was employed on a contingency basis, or had, or is to receive, in connection with the offering, a substantial interest, direct or indirect, in the registrant or any of its parents or subsidiaries. Nor was any such person connected with the registrant or any of its parents or subsidiaries as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee.

**EXPERTS**

The audited financial statements of QumulusAI, Inc., formerly known as Global Digital Holdings, Inc., as of and for the years ended December 31, 2025 and 2024 included in this prospectus and in the registration statement have been so included in reliance upon the report of WithumSmith+Brown, PC, independent registered public accountants, upon the authority of said firm as experts in accounting and auditing.

The audited financial statements of The Cloud Minders, Inc., as of and for the years ended December 31, 2024 and 2023 included in this prospectus and in the registration statement, have been so included in reliance upon the report of BPS & Associates, LLC, independent auditors, upon the authority of said firm as experts in accounting and auditing.

**WHERE YOU CAN FIND MORE INFORMATION**

We have filed with the SEC a registration statement on Form S-1 under the Securities Act, with respect to the shares of common stock being offered by this prospectus. This prospectus, which constitutes part of the registration statement, does not contain all of the information set forth in the registration statement or the exhibits and schedules filed therewith. Statements contained in this prospectus regarding the contents of any contract or any other document that is filed as an exhibit to the registration statement are not necessarily complete, and each such statement is qualified in all respects by reference to the full text of such contract or other document filed as an exhibit to the registration statement.

Immediately upon the effectiveness of the registration statement of which this prospectus forms a part, we will become subject to the information and reporting requirements of the Exchange Act and, in accordance with this law, will file periodic reports, proxy statements and other information with the SEC through its website at *www.sec.gov*. We also maintain a website at *www.qumulusai.com*. Upon the effectiveness of the registration statement of which this prospectus forms a part, you may access these materials free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. Information contained on our website is not a part of this prospectus and the inclusion of our website address in this prospectus is an inactive textual reference only.

**DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITY**

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the registrant pursuant to the foregoing provisions, the registrant has been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

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**INDEX TO FINANCIAL STATEMENTS**

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| | |
|:---|:---|
|  | **<u>Page</u>** |
| **QUMULUSAI, INC. AND SUBSIDIARIES** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; **Report of Independent Registered Public Accounting Firm** | F-1 |
| &nbsp;&nbsp;&nbsp;&nbsp; **Consolidated Financial Statements:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Consolidated Balance Sheets as of December 31, 2025 and 2024 | F-2 |
| &nbsp;&nbsp;&nbsp;&nbsp; Consolidated Statements of Operations for the years ended December 31, 2025 and 2024 | F-4 |
| &nbsp;&nbsp;&nbsp;&nbsp; Consolidated Statements of Stockholders' Equity (Deficit) for the years ended December 31, 2025 and 2024 | F-6 |
| &nbsp;&nbsp;&nbsp;&nbsp; Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024 | F-8 |
| &nbsp;&nbsp;&nbsp;&nbsp; Notes to Consolidated Financial Statements | F-9 |
| **THE CLOUD MINDERS, INC.** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;**Condensed Financial Statements:** | F-51 |
| &nbsp;&nbsp;&nbsp;&nbsp;Balance Sheets as of March 31, 2025 and December 31, 2024 | F-51 |
| &nbsp;&nbsp;&nbsp;&nbsp;Statement of Net Loss for the three months ended March 31, 2025 and 2024 | F-52 |
| &nbsp;&nbsp;&nbsp;&nbsp;Statement of Changes in Stockholders' and Members' Equity for the three months ended March 31, 2025 and 2024 | F-53 |
| &nbsp;&nbsp;&nbsp;&nbsp;Statement of Cash Flows for the three months ended March 31, 2025 and 2024 | F-54 |
| &nbsp;&nbsp;&nbsp;&nbsp;Notes to Financial Statements | F-55 |
| &nbsp;&nbsp;&nbsp;&nbsp; **Independent Auditor**'**s Report** | F-69 |
| &nbsp;&nbsp;&nbsp;&nbsp; **Financial Statements:**  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Balance Sheets as of December 31, 2024 and 2023 | F-71 |
| &nbsp;&nbsp;&nbsp;&nbsp; Statements of Income (Loss) for the years ended December 31, 2024 and 2023 | F-73 |
| &nbsp;&nbsp;&nbsp;&nbsp; Statements of Changes in Stockholders' and Members' Equity for the years ended December 31, 2024 and 2023 | F-74 |
| &nbsp;&nbsp;&nbsp;&nbsp; Statements of Cash Flows for the years ended December 31, 2024 and 2023 | F-75 |
| &nbsp;&nbsp;&nbsp;&nbsp; Notes to Financial Statements | F-77 |

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**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the Board of Directors and Stockholders of

QumulusAI, Inc., formerly Global Digital Holdings Inc. and Subsidiaries

**Opinion on the Financial Statements**

We have audited the accompanying consolidated balance sheets of QumulusAI, Inc., formerly Global Digital Holdings Inc. and Subsidiaries (the "Company) as of December 31, 2025 and 2024 and the related consolidated statements of operations, stockholders' equity (deficit), cash flows for the years ended, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years ended December 31, 2025 and 2024 in conformity with accounting principles generally accepted in the United States of America.

**Emphasis of Matter** – **Uncertainties Related to Digital Assets**

As disclosed in Note 2 to the consolidated financial statements, the recorded amounts of digital assets on the consolidated balance sheets as of December 31, 2025 and 2024, representing approximately 0% and 4% of total assets, respectively.

**Basis for Opinion**

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ WithumSmith+Brown, PC

We have served as the Company's auditors since 2025.

Whippany, New Jersey

April 7, 2026

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**QUMULUSAI, INC. (formerly known as GLOBAL DIGITAL HOLDINGS, INC.) AND SUBSIDIARIES**

**Consolidated Balance Sheets**

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| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
| **ASSETS** |  |  |
| **Current assets:** |  |  |
| Cash | $11712493 | $3970466 |
| U.S. dollar coin |  | 391584 |
| Accounts receivable, net of allowance for credit losses of $2,263 and $3,617, respectively | 57889 | 42781 |
| Loans receivable, net - related party |  | 95698 |
| Due from related party |  | 82213 |
| Prepaid expenses and other current assets | 1134851 | 203241 |
| Total current assets | 12905233 | 4785983 |
| Property and equipment, net | 12502886 | 2737019 |
| Operating right-of-use assets, net | 1438970 | 1548502 |
| Finance right-of-use assets, net | 6996077 |  |
| Digital assets, net of current portion |  | 511376 |
| Equity method investments | 4227130 | 8657615 |
| Loans receivable, net of current portion - related party |  | 136754 |
| Deposits on power equipment | 13622641 | 1326801 |
| Goodwill | 31416827 |  |
| Intangible assets, net | 7268513 |  |
| Other assets | 1356216 | 641844 |
| Total assets | $91734493 | $20345894 |
| **LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY (DEFICIT)** |  |  |
| **Current liabilities:** |  |  |
| Accounts payable | $1248175 | $803407 |
| Dividend payable | 359188 | 395947 |
| Accrued expenses and other current liabilities | 2833337 | 2314089 |
| Current portion of notes payable | 1684554 | 46088 |
| Current portion of notes payable - related party | 3848915 | 1111921 |
| Current portion of convertible note payable, net of discount - related party |  | 3008474 |
| Operating lease liabilities - current portion | 97463 | 62035 |
| Finance lease liabilities - current portion | 1645069 |  |
| Deferred tax liability | 423381 |  |
| Due to related party |  | 547484 |
| Line of credit |  | 292659 |
| Total current liabilities | 12140082 | 8582104 |
| Long-term notes payable, net of current portion | 6241948 | 62075 |
| Long-term notes payable, net of current portion - related party |  | 3848915 |
| Operating lease liabilities, net of current portion | 1497549 | 1595009 |
| Finance lease liabilities, net of current portion | 5179828 |  |
| Warrant liability | 1382955 | 4815890 |
| Total long-term liabilities | 14302280 | 10321889 |
| Total liabilities | $26442362 | $18903993 |
| Commitments and contingencies (Note 23) |  |  |
| **Mezzanine Equity** |  |  |
| Series A Redeemable Preferred stock, - and 5,453,876 shares authorized as of December 31, 2025 and 2024, respectively, - and 729,448 shares issued and outstanding as of December 31, 2025 and 2024, respectively |  | 811049 |
| Series B Redeemable Preferred stock, - and 5,856,097 shares authorized as of December 31, 2025 and 2024, respectively, - and 634,132 shares issued and outstanding as of December 31, 2025 and 2024, respectively |  | 1221512 |
| Total mezzanine equity |  | 2032561 |
| **Stockholders' Equity (Deficit)** |  |  |
| Preferred stock - no par value; - and 25,000,000 shares authorized as of December 31, 2025 and 2024, respectively |  |  |
| Series A Preferred stock, - and 5,453,876 shares authorized as of December 31, 2025 and 2024, respectively, - and 4,713,515 shares issued and outstanding as of December 31, 2025 and 2024, respectively |  | 5224127 |
| Series B Preferred stock, - and 5,856,097 shares authorized as of December 31, 2025 and 2024, respectively, - and 5,205,630 shares issued and outstanding as of December 31, 2025 and 2024, respectively |  | 10027471 |
| Series C Preferred stock, - and 3,690,027 shares authorized as of December 31, 2025 and 2024, respectively, - and 3,663,841 shares issued and outstanding as of December 31, 2025 and 2024, respectively |  | 5990371 |
| Series D Preferred stock, - and 10,000,000 shares authorized as of December 31, 2025 and 2024, - shares issued and outstanding as of December 31, 2025; and 9,089,000 shares issued and outstanding as of December 31, 2024 |  | 9008512 |
| Common stock - no par value; 500,000,000 shares authorized, 31,365,090 shares issued and outstanding as of December 31, 2025; and 75,000,000 authorized and 12,835,535 shares issued and outstanding as of December 31, 2024 | 93400180 | 408505 |
| Additional paid-in capital | 6318290 | 2007227 |
| Accumulated deficit | (37546254) | (33256873) |
| Total stockholders' equity (deficit) attributable to QumulusAI stockholders | 62172216 | (590660) |
| Non-controlling interests | 3119915 |  |
| Total stockholders' equity (deficit) | 65292131 | (590660) |
| Total liabilities, mezzanine equity and stockholders' equity (deficit) | $91734493 | $20345894 |

---

*See accompanying notes to consolidated financial statements.*

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**QUMULUSAI, INC. (formerly known as GLOBAL DIGITAL HOLDINGS, INC.) AND SUBSIDIARIES**

**Consolidated Balance Sheets**

All periods presented have been adjusted to reflect the 1-for-3 reverse stock split effected on September 30, 2025. Additional information may be found in Note 1, included in the notes to the consolidated financial statements.

*See accompanying notes to consolidated financial statements.*

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**QUMULUSAI, INC. (formerly known as GLOBAL DIGITAL HOLDINGS, INC.) AND SUBSIDIARIES**

**Consolidated Statements of Operations**

---

| | | |
|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** |
|  | **2025** | **2024** |
| **Revenue** |  |  |
| Revenue from cryptocurrency mining | $816195 | $4184239 |
| Revenue from mining hosting services | 6090970 | 3911433 |
| Revenue from compute power | 4938705 |  |
| Total revenue | 11845870 | 8095672 |
| **Costs and expenses** |  |  |
| Cost of revenue | 6421207 | 5371049 |
| General and administrative expenses | 10001385 | 3346547 |
| Depreciation and amortization expense | 5682455 | 7164034 |
| Total costs and expenses | 22105047 | 15881630 |
| **Operating loss** | (10259177) | (7785958) |
| **Other income (expenses)** |  |  |
| Income (loss) from equity method investments | 1355374 | (274270) |
| Gain on sale of equity method investments |  | 835046 |
| Gain on sale of investment in joint venture |  | 155286 |
| Gain on remeasurement of investment in TCM | 14549536 |  |
| Change in fair value of warrant liability | (5536816) | (2566552) |
| Change in fair value of digital assets | 81919 | 188682 |
| Gain (loss) on disposal of property and equipment | 462 | (2525408) |
| Loss on settlement of lease liability | (1206067) |  |
| Loss on extinguishment of debt | (1037501) | (83757) |
| Other income (expense), net | (54373) | (7947) |
| Interest expense, net | (1929855) | (1119496) |
| Total other income (expenses), net | 6222679 | (5398416) |
| **Loss before income tax expense** | (4036498) | (13184374) |
| **Income tax expense** | 423381 |  |
| **Net loss** | $(4459879) | $(13184374) |
| Net loss in non-controlling interests | (170498) |  |
| Less deemed dividend on conversion of preferred stock | 89386947 |  |
| **Net loss attributable to common stockholders** | $(93676328) | $(13184374) |
| Net loss per share, basic and diluted | $(4.63) | $(0.96) |
| Weighted-average common stock outstanding, basic and diluted | 20249377 | 13796790 |

---

*See accompanying notes to consolidated financial statements.*

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**QUMULUSAI, INC. (formerly known as GLOBAL DIGITAL HOLDINGS, INC.) AND SUBSIDIARIES**

**Consolidated Statements of Operations**

All periods presented have been adjusted to reflect the 1-for-3 reverse stock split effected on September 30, 2025. Additional information may be found in Note 1, included in the notes to the consolidated financial statements.

*See accompanying notes to consolidated financial statements.*

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**QUMULUSAI, INC. (formerly known as GLOBAL DIGITAL HOLDINGS, INC.) AND SUBSIDIARIES**

**Consolidated Statements of Stockholders' Equity (Deficit)**

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| | | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Series A Preferred Stock** | **Series A Preferred Stock** | **Series B Preferred Stock** | **Series B Preferred Stock** | **Series C Preferred Stock** | **Series C Preferred Stock** | **Series D Preferred Stock** | **Series D Preferred Stock** | **Common Stock** | **Common Stock** |  |  |  |  |  |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Additional**<br> **Paid-In** <br> **Capital**  | **Accumulated**<br> **Deficit** | **Total**<br> **Stockholders'**<br> **Equity**<br> **(Deficit)**<br> **attributable to**<br> **QumulusAI** <br> **stockholders** | **Non-**<br> **Controlling**<br> **Interests** | **Total**<br> **Stockholders'**<br> **Equity**<br> **(Deficit)** |
| **Balance at January 1, 2024** | **4713515** | $**5224127** | **5205630** | $**10027471** | **3663841** | $**5990371** | **500000** | $**475113** | **12835535** | $**408505** | $**624026** | $**(20072499)** | $**2677114** | $**—** | $**2677114** |
| Issuance of preferred stock, net of issuance cost |  |  |  |  |  |  | 8589000 | 8533399 |  |  | 69601 |  | 8603000 |  | 8603000 |
| Issuance of warrants for services |  |  |  |  |  |  |  |  |  |  | 188352 |  | 188352 |  | 188352 |
| Issuance of stock options for partial payment on convertible note payable |  |  |  |  |  |  |  |  |  |  | 180776 |  | 180776 |  | 180776 |
| Issuance of warrants for extinguishment of debt |  |  |  |  |  |  |  |  |  |  | 154687 |  | 154687 |  | 154687 |
| Issuance of warrants as a deemed contribution to equity method investment |  |  |  |  |  |  |  |  |  |  | 476145 |  | 476145 |  | 476145 |
| Stock-based compensation |  |  |  |  |  |  |  |  |  |  | 313640 |  | 313640 |  | 313640 |
| Net loss |  |  |  |  |  |  |  |  |  |  |  | **(13184374)** | (13184374) |  | (13184374) |
| **Balance at December 31, 2024** | **4713515** | $**5224127** | **5205630** | $**10027471** | **3663841** | $**5990371** | **9089000** | $**9008512** | **12835535** | $**408505** | $**2007227** | $**(33256873)** | $**(590660)** | $**—** | $**(590660)** |
| Issuance of common stock, net of issuance costs |  |  |  |  |  |  |  |  | 3075761 | 27466741 | 544645 |  | 28011386 |  | 28011386 |
| Issuance of common stock for settlement of lease liability |  |  |  |  |  |  |  |  | 193650 | 2203937 |  |  | 2203937 |  | 2203937 |
| Issuance of common stock for exercise of warrants |  |  |  |  |  |  |  |  | 866787 | 9043112 |  |  | 9043112 |  | 9043112 |
| Issuance of common stock for exercise of options |  |  |  |  |  |  |  |  | 54470 | 113735 |  |  | 113735 |  | 113735 |
| Reissuance of common stock to TCM founders for shares previously forfeited |  |  |  |  |  |  |  |  | 22703 |  |  |  |  |  |  |
| Repurchase of founder shares |  |  |  |  |  |  |  |  | (66667) |  |  |  |  |  |  |
| Redemption of preferred stock for cash |  |  |  |  |  |  | (266749) | (293742) |  |  |  |  | (293742) |  | (293742) |
| Conversion of preferred stock to common stock | (4713515) | (5224127) | (5205630) | (10027471) | (3663841) | (5990371) | (10783025) | (13621746) | 11790879 | 36896276 |  |  | 2032561 |  | 2032561 |
| Issuance of preferred stock |  |  |  |  |  |  | 14000 |  |  |  |  |  |  |  |  |
| Issuance of preferred stock upon partial conversion of convertible note |  |  |  |  |  |  | 514592 | 1711837 |  |  |  |  | 1711837 |  | 1711837 |
| Issuance of warrants for settlement of lease liability |  |  |  |  |  |  |  |  |  |  | 720366 |  | 720366 |  | 720366 |
| Issuance of warrants to purchase equipment |  |  |  |  |  |  |  |  |  |  | 104854 |  | 104854 |  | 104854 |
| Issuance of warrants for services |  |  |  |  |  |  |  |  |  |  | 134502 |  | 134502 |  | 134502 |
| Issuance of Common Stock and Series D Preferred Stock for the acquisition of TCM |  |  |  |  |  |  | 1432182 | 3195139 | 2574718 | 17054874 |  |  | 20250013 |  | 20250013 |
| Exchange of TCM stock options resulting in issuance of stock options in acquisition |  |  |  |  |  |  |  |  |  |  | 1883956 |  | 1883956 |  | 1883956 |
| Issuance of common stock for the acquisition of QAI Moon |  |  |  |  |  |  |  |  | 19723 | 213000 |  |  | 213000 |  | 213000 |
| Capital contributions from joint venture partners |  |  |  |  |  |  |  |  |  |  |  |  |  | 3290413 | 3290413 |
| Deemed dividend on conversion of preferred stock of $89,386,947 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Stock-based compensation |  |  |  |  |  |  |  |  |  |  | 922740 |  | 922740 |  | 922740 |
| Net loss |  |  |  |  |  |  |  |  |  |  |  | (4289381) | (4289381) | (170498) | (4459879) |
| **Balance at December 31, 2025** |  | $**—** |  | $**—** |  | $**—** |  | $**—** | **31367559** | $**93400180** | $**6318290** | $**(37546254)** | $**62172216** | $**3119915** | $**65292131** |

---

*See accompanying notes to consolidated financial statements.*

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**QUMULUSAI, INC. (formerly known as GLOBAL DIGITAL HOLDINGS, INC.) AND SUBSIDIARIES**

**Consolidated Statements of Stockholders' Equity (Deficit)**

All periods presented have been adjusted to reflect the 1-for-3 reverse stock split effected on September 30, 2025. Additional information may be found in Note 1, included in the notes to the consolidated financial statements.

*See accompanying notes to consolidated financial statements.*

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**QUMULUSAI, INC. (formerly known as GLOBAL DIGITAL HOLDINGS, INC.) AND SUBSIDIARIES**

**Consolidated Statements of Cash Flows** 

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| | | |
|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2025** | **2024** |
| **CASH FLOWS FROM OPERATING ACTIVITIES:** |  |  |
| Net loss | $(4459879) | $(13184374) |
| Adjustments to reconcile net income (loss) to net cash used in operating activities: |  |  |
| Depreciation and amortization expense | 4215492 | 7164034 |
| Amortization of loan origination costs | 32325 | 36159 |
| Amortization of discount on convertible note | 135334 | 286500 |
| Bad debt expense |  | 6859 |
| Amortization of premium on loan receivable | (16281) |  |
| Non-cash interest expense | 6418 |  |
| Recovery of credit losses | (36921) |  |
| Amortization of right-of-use assets | 1576495 | 93171 |
| Interest expense under finance lease obligations | 496736 |  |
| Income (loss) from equity method investments | (1355374) | 274270 |
| Gain on sale of investment in joint venture |  | (155286) |
| Gain on sale of equity method investments |  | (835046) |
| Gain on remeasurement of investment in TCM | (14549536) |  |
| Change in fair value of warrant liability | 5536816 | 2566552 |
| Change in fair value of digital assets | (81919) | (188682) |
| Change in deferred taxes | 423381 |  |
| Stock-based compensation | 922740 | 313640 |
| Issuance of warrants for services | 134502 | 188352 |
| (Loss) gain on disposal of property and equipment | (462) | 2525408 |
| Loss on extinguishment of debt | 1037501 | 83757 |
| Loss on extinguishment of lease liability | 1206067 |  |
| Changes in operating assets and liabilities: |  |  |
| Accounts receivable | (15108) | 261594 |
| Due from related party | 82213 | (77865) |
| Prepaid expenses and other current assets | (919776) | (76655) |
| Proceeds from sale of digital assets | 3768568 | 4348874 |
| Other assets |  | (331844) |
| Mining of digital assets | (3568733) | (4843537) |
| Accounts payable | 272513 | (107028) |
| Accrued expenses | 153779 | 756883 |
| Operating lease liabilities | (62032) | 35372 |
| Intangible assets | (64437) |  |
| Due to related party | (547484) | (462516) |
| Other non-current liabilities |  | (700000) |
| Net cash used in operating activities | (5677062) | (2021408) |
| **CASH FLOWS FROM INVESTING ACTIVITIES:** |  |  |
| Purchase of property and equipment | (3933522) | (1523600) |
| Proceeds from disposal of property and equipment | 4000 |  |
| Proceeds from collections of loans receivable | 285654 | 145549 |
| Deposits on power equipment | (10659328) | (1326801) |
| Data center set up costs | (714372) |  |
| Proceeds from sale of joint venture |  | 227463 |
| Proceeds from sale of digital asset reserve | 393460 |  |
| Proceeds from sale of U.S. dollar coin | 391584 |  |
| Cash acquired as part of business acquisition | 2441275 |  |
| Dividends paid on common stock | (36759) |  |
| Distributions from equity method investments | 3234000 | 1250000 |
| Investment in equity method investments |  | (643933) |
| Net cash used in investing activities | (8594008) | (1871322) |
| **CASH FLOWS FROM FINANCING ACTIVITIES:** |  |  |
| Proceeds from issuance of Series D Preferred stock, net of issuance costs |  | 8603000 |
| Proceeds from sale of common stock, net of issuance costs | 28011386 |  |
| Redemption of preferred stock | (293742) |  |
| Repayments on finance lease obligations | (2022552) |  |
| Proceeds from notes payable - related party | 7170 |  |
| Proceeds from exercise of warrants | 73361 |  |
| Proceeds from exercise of options | 113735 |  |
| Proceeds from line of credit |  | 648262 |
| Repayment of line of credit | (299077) | (355603) |
| Repayments of notes payable | (945438) | (159417) |
| Repayments of notes payable - related party | (1255198) | (1023960) |
| Repayments of convertible notes payable | (1150000) | (480430) |
| Repayments of convertible note payable - related party | (3226548) |  |
| Contributions from non-controlling interest | 3000000 |  |
| Net cash provided by financing activities | 22013097 | 7231852 |
| **NET CHANGE IN CASH** | 7742027 | 3339122 |
| **CASH, beginning of year** | 3970466 | 631344 |
| **CASH, end of year** | $11712493 | $3970466 |
| **SUPPLEMENTAL CASH FLOW INFORMATION** |  |  |
| Cash paid for income taxes | $— | $— |
| Cash paid for interest | $907788 | $793120 |
| *Non-cash financing and investing activities* | | |
| Issuance of warrants as a deemed contribution to equity method investment | $— | $476145 |
| Issuance of warrants for property and equipment | $104854 | $— |
| Issuance of warrants as offering costs | $544645 | $— |
| Issuance of stock options for partial payment on convertible note payable | $— | 180776 |
| Issuance of warrants in connection with Series D Preferred Stock | $— | $69601 |
| Issuance of common stock for settlement of lease liability | $2203937 | $— |
| Conversion of preferred stock to common stock | $36896276 | $— |
| Non-cash contribution to equity method investment | $115210 | $926240 |
| Issuance of Common Stock and Series D Preferred Stock for the acquisition of TCM | $20250013 | $— |
| Exchange of TCM stock options resulting in issuance of stock options in acquisition | $1883956 | $— |
| Issuance of Common Stock for the acquisition of QAI Moon | $213000 | $— |
| Issuance of preferred stock upon partial conversion of convertible note | $1711837 | $— |
| Fair value of penny warrants exercised for common stock | $8969751 | $— |
| Forgiveness of FCNC loan receivable | $— | $22294 |
| Transfer of leased assets to property and equipment upon lease buyout | $2792827 | $— |
| Note payable issued to fund deposits on power equipment | $1636512 | $— |
| Note payable issued for settlement of lease liabilities | $858013 | $— |
| Non-cash contribution of leased assets to QAI Moon | $426000 | $— |
| Acquisition of right-of-use asset in exchange for lease obligations | $10829867 | $1641673 |
| Lease liabilities arising from obtaining right-of-use assets | $11004375 | $— |

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*See accompanying notes to consolidated financial statements.*

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**QUMULUSAI, INC. (formerly known as GLOBAL DIGITAL HOLDINGS, INC.) AND SUBSIDIARIES**

**Notes to Consolidated Financial Statements**

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

***The Company***

WAHA Technologies, Inc. ("WAHA") was organized in the state of Georgia in 2019 and is primarily engaged in bitcoin mining hosting services. WAHA buys and maintains digital asset mining equipment and the required infrastructure in order to mine bitcoin.

SPRE Commercial Group, Inc. ("SPRE") was organized in the state of Georgia in 2019 for the purpose of owning and leasing land, buildings, and digital assets mining facilities.

QumulusAI, Inc. (formerly known as Global Digital Holdings, Inc.) ("QumulusAI", or the "Company") was organized in the state of Georgia in 2022 to serve as the holding Company for WAHA and SPRE. On October 10, 2022, the Board of Directors of WAHA and SPRE approved the decision to merge all equity of WAHA and SPRE to the Company, with the Company directly owning WAHA and SPRE. Effective December 13, 2022, the shareholders of WAHA and SPRE entered into a contribution and exchange agreement with the Company, in which all their outstanding equity securities and ownership rights in WAHA and SPRE were contributed to the Company in exchange for shares and ownership rights in the Company.

SPRE Watonga OK, LLC ("Watonga") was organized in the state of Georgia in 2024 as an entity for one of the Company's main operating sites, which opened in the same year. The entity is primarily engaged in mining of digital currency and in digital currency mining hosting services. The Company will also serve as a holding company for Watonga.

On April 1, 2025, the Company acquired 100% of The Cloud Minders, Inc. ("TCM"). See Note 3 - Business Combinations for additional information.

On October 1, 2025, the Company entered into joint ventures, QAI Moon, LLC ("QAI Moon"), SPRE NKC MO, LLC ("SPRE NKC"), and SPRE Brooklyn NY, LLC ("SPRE Brooklyn"). The Company consolidates these entities, however they are not wholly-owned subsidiaries. See Note 10 - Joint Ventures for additional information.

Effective August 18, 2025, the Company changed its corporate name to QumulusAI.

***Reverse Stock Split***

The Company effected a 1-for-3 reverse stock split ("Reverse Stock Split") on September 30, 2025, pursuant to which every three shares of the Company's issued and outstanding common stock were combined into one share of common stock. The Reverse Stock Split had no impact on the par value of the Company's no par value common stock or the authorized number of shares of common stock. Unless otherwise indicated, all share and per share information prior to the Reverse Stock Split date of September 30, 2025 in these consolidated financial statements are retroactively adjusted to reflect the Reverse Stock Split, prior to the rounding of any fractional shares. Any fractional share resulting from the Reverse Stock Split were rounded up to the next whole number of shares.

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***Going Concern***

Pursuant to Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2014-15, *Presentation of Financial Statements-Going Concern* (Subtopic 205-40), management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for one year after the date the financial statements are issued. Management's evaluations are based on relevant conditions and events that are known and reasonably knowable as of the date the financial statements were issued.

The Company has incurred recurring operating losses since inception resulting in an accumulated deficit of $37,546,254 as of December 31, 2025. For the year ended December 31, 2025, the Company has operating cash outflows of $5,677,062 and had an operating loss of $10,259,177. The Company's operations have been funded partially through the issuance of debt. These factors raise substantial doubt about the Company's ability to continue as a going concern for a period of one year from the issuance of these consolidated financial statements.

In assessing the Company's ability to continue as a going concern, the Company monitors and analyzes its cash and its ability to generate sufficient cash flow in the future to support its operating and capital expenditure commitments. At December 31, 2025, the Company had cash of $11,712,493. The Company's plans to alleviate the substantial doubt include drawing on its $500 million credit facility and receiving net proceeds from a convertible note of $14 million. Management concluded these plans will alleviate the substantial doubt about the Company's ability to continue as a going concern for the one-year period extending from the date of issuance of these financial statements.

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

***Principles of Consolidation***

The accompanying consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, WAHA, SPRE, Watonga, and TCM and its partially owned consolidated entities, QAI Moon, SPRE Brooklyn and SPRE NKC. The Company uses the equity method to account for investments in other companies if the investment provides management with the ability to exercise significant influence over the operating and financial policies of the investee. The consolidated net loss includes the Company's proportionate share of the net income or loss of these companies. Management's judgment regarding the level of influence over each equity method investee includes considering key factors, such as ownership interest, representation on the board of directors and participation in policy-making decisions. All significant intercompany transactions and balances have been eliminated in consolidation. For financial and income tax reporting purposes, the Company has adopted a calendar year-end.

***Basis of Presentation***

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The FASB establishes these principles to ensure financial condition, results of operations, and cash flows are consistently reported. Any reference in these notes to applicable accounting guidance is meant to refer to the authoritative U.S. GAAP included in the Accounting Standards Codification ("ASC") and ASU issued by the FASB.

***Non-Controlling Interests***

The Company follows ASC 810, *Consolidation,* which governs the accounting for and reporting of non-controlling interests ("NCIs") in partially owned consolidated entities and the loss of control of those entities. Non-controlling interest positions are reported as a separate component of consolidated stockholders' equity from the equity attributable to QumulusAI's stockholders for all years presented. The net income (loss) attributed to the NCIs is separately designated in the accompanying consolidated statements of operations resulting from the Company's controlling position in QAI Moon, SPRE Brooklyn and SPRE NKC.

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***Correction of an Immaterial Error in Prior Period Financial Statements***

The Company received $14,000 during the year ended December 31, 2024 for 14,000 shares of Series D Preferred Stock that were not issued until 2025. The Company recorded the issuance of the shares in the consolidated statements of stockholders' equity for the year ended December 31, 2025. The $14,000 was already recorded in Series D Preferred Stock on the consolidated balance sheets as of December 31, 2024.

***Reclassifications***

Certain reclassifications have been made to the prior period financial statements to conform to the current period financial statement presentation. U.S. Dollar Coin that was previously classified as digital assets, net was reclassified to its own caption on the consolidated balance sheets.

***Use of Estimates***

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Management's estimates and assumptions include, but are not limited to, estimating the fair value of consideration of acquisitions, the accounting for business combinations and allocating purchase price, valuation and estimating the useful life of identifiable intangible assets, valuation of goodwill, estimates used for forecast in business combinations, allowance for credit losses, financial instruments recorded at a fair value on a recurring basis, revenue recognition from digital asset mining, collectability of accounts receivable and loans receivable, valuation of convertible note payable, fair value of consideration transferred for equity method investments and joint ventures, fair value of assets and liabilities assumed in acquisitions, valuation of stock-based awards, salvage values and estimated useful lives of property and equipment, valuation of deferred taxes and uncertain tax positions, valuation of common stock and warrant liabilities, and other assumptions used to measure stock-based compensation, calculation of incremental borrowing rate, and estimates for transfers of investments and valuation of assets. Management's estimates and assumptions are derived from and are continually evaluated based upon available information, judgment, and experience.

***Concentration of Credit Risk***

Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash and accounts receivable.

The Company maintains cash balances in various financial institutions. At times, such balances may be in excess of the Federal Deposit Insurance Corporation insurance limit. As of December 31, 2025 and 2024, interest-bearing accounts and non-interest bearing accounts were insured by the Federal Deposit Insurance Corporation up to $250,000 per financial institution. In lieu of insurance, the financial institution may collateralize the commercial paper with U.S. government securities, in which case they become repurchase agreements. The Company has not experienced any losses in such accounts and monitors the credit worthiness of the financial institutions with which they conduct business. Management believes that the Company is not exposed to significant credit risk with respect to its cash balances.

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The Company is exposed to counterparty risk through the deposits it places with suppliers of mining and mining related equipment to secure orders and delivery dates. The risk of a supplier failing to meet its contractual obligations may result in late deliveries or mining prepayments that are not realized. The Company attempts to mitigate this risk by procuring mining hardware from larger, more established suppliers and those whom the Company has existing relationships and knowledge of their reputation in the market.

During the year ended December 31, 2025, the Company had two customers that accounted for approximately 67% of the Company's total revenues. During the year ended December 31, 2024, the Company had four customers that accounted for approximately 100% of the Company's total revenues. For each significant customer, revenue as a percentage of total revenue are as follows:

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| | | |
|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
| **Customers** | **2025** | **2024** |
| Customer A | 36% | 21% |
| Customer B | 31% |  |
| Customer C | —% | 17% |
| Customer D | —% | 52% |
| Customer E | —% | 10% |

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***Cash***

For purposes of the consolidated balance sheets and consolidated statements of cash flows, the Company considers cash in operating bank accounts and cash on hand as cash.

***U.S. Dollar Coin***

U.S. Dollar Coin ("USDC") is a stablecoin digital asset that is backed by U.S. dollars or other liquid assets and accounted for as a financial instrument. USDC can be redeemed for one U.S. Dollar.

***Digital Assets***

*Crypto Assets*

The Company accounts for crypto assets in accordance with ASU 2023-08, *Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets*, which requires entities to measure certain crypto assets at fair value with changes recognized in the consolidated statements of operations for each reporting period. The Company's crypto assets, Bitcoin and Ethereum Classic ("ETC"), which have not been determined to be stablecoins or derivatives, are within the scope of ASU 2023-08. The Company has deemed the price of crypto assets to be a Level 1 input under ASC 820 hierarchy as these were based on observable quoted prices in the Company's principal market for identical assets. The Company's crypto assets are received in exchange for services transferred to a customer and are converted to cash daily. Cash proceeds from the sale of digital assets are classified within operating activities in the Company's consolidated statements of cash flows.

The Company acquires crypto assets through its network operations and holds these crypto assets. Each crypto asset acquisition is considered its own "lot" with its own cost basis based on the crypto asset-to-USD conversion price from the Company's principal market at time of acquisition. Any realized gain/loss on the disposition of crypto assets is calculated on a weighted-average basis.

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*Principal Market and Fair Value Determination*

To determine which market is the Company's principal market (or in the absence of a principal market, the most advantageous market) for purposes of determining fair value of individual digital assets, the Company follows ASC 820, *Fair Value Measurement,* which outlines the application of fair value accounting. ASC 820 determines fair value to be the price that would be received for digital assets in a current sale, which assumes an orderly transaction between market participants on the measurement date. ASC 820 requires the Company to assume that the digital asset is sold in its principal market to market participants or, in the absence of a principal market, the most advantageous market. Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact.

The Company transacts in a Brokered Market, a Dealer Market, Principal-to-Principal Markets and Exchange Markets, each as defined in the FASB Master Glossary (collectively, "Digital Asset Markets"). In determining which of the eligible Digital Asset Markets is the Company's principal market, the Company reviews these criteria in the following order:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• First, the Company determines which Digital Asset Markets for the relevant digital asset are accessible to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Second, the Company sorts the remaining Digital Asset Markets from high to low by market-based volume of the digital asset traded on each Digital Asset Markets in the trailing twelve months.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Third, the Company then selects a Digital Asset Market as its principal market based on the highest market-based volume in comparison to the other Digital Asset Markets on the list.

The Company determines its principal market (or in the absence of a principal market, the most advantageous market) annually to determine (i) if there have been recent changes to each Digital Asset Market's trading volume in the trailing twelve months, (ii) if any Digital Asset Markets have developed that the Company has access to, or (iii) if recent changes to each Digital Asset Market's price stability have occurred that would materially impact the selection of the principal market and necessitate a change in the Company's determination of its principal market.

The Company's Bitcoin and ETC is recorded at fair value, as determined using the period-end closing price at 16:00:00 UTC of Bitcoin and ETC on the Company's principal market, New York Digital Investment Group and Coinbase (the "Principal Markets"), and changes in fair value are recognized change in fair value of digital assets on the consolidated Statements of Operations.

***Fair Value Measurements***

Fair value is defined as the price that would be received to sell an asset in the principal or most advantageous market for the asset in an orderly transaction between market participants on the measurement date. Fair value should be based on assumptions market participants would use when pricing an asset. U.S. GAAP provides a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

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Assets and liabilities that are required to be recorded at fair value on the balance sheet are categorized based on the inputs to valuation techniques as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 1. These are assets and liabilities where values are based on unadjusted quoted prices for identical assets in an active market the Company has the ability to access.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 2. These are assets and liabilities where values are based on similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active, and model derived prices whose inputs are observable or whose significant value drivers are observable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 3. Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The fair values of financial instruments including cash, accounts receivable, accounts payable, accrued expenses, and other current assets and liabilities approximate their respective the carrying values due to the short maturities of those instruments. The fair value of notes payable approximates the carrying value, principally because of the maturity dates and the current terms applicable to the notes payable.

***Financial Instruments*** — ***Credit Losses (ASU 2016-13)***

Under the current expected credit loss ("CECL") impairment model, the Company develops and documents its allowance for credit losses on its accounts receivables based on two portfolio segments: Bitcoin mining trade receivables and Bitcoin mining hosting trade receivables. The determination of portfolio segments is primarily based on customer type, while also taking into account factors that may influence credit risk, such as macroeconomic conditions, industry trends, and the geographic location of customers and mining facilities. The Company develops and documents the allowance for credit losses on its loans receivable based on debtor type, while also taking into account factors that may influence credit risk, such as macroeconomic conditions and liquidity risks.

The Company's quantitative allowance for credit loss estimates under CECL was determined using the loss rate method for trade receivables and the Probability of Default and Loss Given Default Methods ("PD method" and "LGD method") for loans receivables. In addition to the quantitative allowance for credit losses, the Company also incorporates qualitative adjustments that may relate to unique risks, changes in current economic conditions that may not be reflected in quantitatively derived results, or other relevant factors to further inform the Company's estimate of the allowance for credit losses.

***Accounts Receivable, Net***

Accounts receivable are stated at the amount management expects to collect from balances outstanding at year-end. Accounts receivable are due 30 days after issuance of the invoice. Accounts receivable past due more than 90 days are considered delinquent. If amounts become uncollectible, they will be charged to operations when that determination is made. Under ASC 326, the Company determines its allowance by applying a peer-based loss rate method to the Company's trade receivables.

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The following table represents the impact of the CECL allowance on accounts receivable:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Balance as of** <br> **January 1, 2024** | **Provision for** <br> **credit losses** | **Recoveries** <br> **collected** | **Balance as of** <br> **December 31, 2024** |
| Provision for credit losses | $1903 | $1714 | $– $| 3617 |

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Balance as of** <br> **January 1, 2025** | **Provision for** <br> **credit losses** | **Recoveries**<br> **collected** | **Balance as of** <br> **December 31, 2025** |
| Provision for credit losses | $3617 | $– $| (1354) | $2263 |

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***Loans Receivable, Net - Related Party***

Loans receivable, net are loans that are carried at unpaid principal and interest balances, less the allowance for expected credit losses on loans receivable and write-offs, if any. Under ASC 326, the Company determines its allowance by multiplying the probability the asset will default within a given time frame ("PD") by the percentage of the asset not expected to be collected due to default ("LGD") and applying to the Company's loan receivables. The PD/LGD method is based on market data on current and past default credit ratings. 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. All past and current debtors are concentrated in the U.S., are in the digital assets industry, and are not known to be in bankruptcy or other serious financial difficulty.

During 2024, the Company advanced a loan receivable in the original amount of $298,062 as a part of the Company's sale of its investment in the FCNC Venture, LLC ("FCNC") joint venture. The loan receivable carries interest of 0.1%, and requires 24 consecutive monthly principal and interest payments of $12,432. The loan was fully paid off in January 2025.

The CECL allowance related to the principal loans receivables outstanding are presented within, "Loans receivable, net - related party" in the Company's consolidated balance sheets. 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 bad debt expense in the period incurred.

The following table represents the activity in of the CECL allowance:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Balance as of** <br> **January 1, 2024** | **Provision for** <br> **credit losses** | **Recoveries** <br> **collected** | **Balance as of** <br> **December 31, 2024** |
| Provision for credit losses | $30062 | $6859 | $– $| 36921 |

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Balance as of** <br> **January 1, 2025** | **Provision for** <br> **credit losses** | **Recoveries** <br> **collected** | **Balance as of** <br> **December 31, 2025** |
| Provision for credit losses | $36921 | $– $| (36921) | $— |

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***Property and Equipment, Net***

Property and equipment are recorded at cost, less accumulated depreciation. Expenditures for additions, improvements, betterments, if material, and individual purchases are generally capitalized. Minor replacements, maintenance, and repairs that do not improve or extend the lives of the assets are charged to expense as incurred. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period.

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The useful life of the Company's mining related equipment, consisting of pods and transformers, is five years. Long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In the event that facts and circumstances indicate that the cost of any long-lived assets may be impaired, an evaluation of recoverability would be performed.

Management reviews the carrying value of property and equipment for impairment whenever events and circumstances indicate that the carrying value of property and equipment may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of property and equipment. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property and equipment is used, and the effects of obsolescence, demand, competition, and other economic factors. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes. The Company uses other depreciation methods, generally, Modified Accelerated Cost Recovery System, for income tax purposes. These differences in depreciation methods result in related deferred taxes.

*Digital Asset Machines*

Management assesses and adjusts the estimated useful lives of its digital asset machines (miners) when there are indicators that productivity of the mining assets are higher or lower than the assigned estimated useful life. The rate at which the Company generates digital assets and, therefore, consumes the economic benefits of its transaction verification servers, is influenced by a number of factors including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The complexity of the transaction verification process which is driven by the algorithms contained within the Bitcoin open source software;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The general availability of appropriate computer processing capacity on a global basis (commonly referred to in the industry as hashing capacity which is measured in petahash units); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Technological obsolescence reflecting rapid development in the transaction verification server industry such that more recently developed hardware is more economically efficient to run in terms of digital assets generated as a function of operating costs, primarily power costs, i.e., the speed of hardware evolution in the industry is such that later hardware models generally have faster processing capacity combined with lower operating costs and a lower cost of purchase. The Company operates in an emerging industry for which limited data is available to make estimates of the useful economic lives of specialized equipment. To the extent that any of the assumptions underlying management's estimate of useful life of its transaction verification servers are subject to revision in a future reporting period, either as a result of changes in circumstances or through the availability of greater quantities of data then the estimated useful life could change and have a prospective impact on depreciation expense and the carrying amounts of these assets.

***Equity Method Investments***

The Company holds certain investments accounted for under the equity method. The Company also uses the equity method to account for investments in joint ventures. Under the equity method, investments are carried at cost and increased or decreased by the Company's pro rata share of the investee earnings or losses. The carrying cost of this investment is also increased or decreased to reflect additional contributions or distributions of capital. Any difference in book equity and the Company's pro rata share of the net assets of the investment will be reported as gain or loss at the time of the liquidation of the investment. It is the Company's policy to record losses in excess of the investment if the Company is committed to provide financial support to the investee.

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At acquisition, any excess of the acquisition cost over the total fair value of the net assets acquired constitutes equity method goodwill. Equity method goodwill is included in the balance of equity method investments and is not reported separately as goodwill on the Company's consolidated balance sheet. Equity method goodwill is not reviewed for impairment; however, the equity method investment is reviewed for impairment.

***Business Combinations***

The Company accounts for business acquisitions using the acquisition method of accounting, in accordance with ASC 805, *Business Combinations* under which assets acquired and liabilities assumed are recorded at their respective fair values at the acquisition date. The fair value of the consideration paid is assigned to the assets acquired and liabilities assumed based on their respective fair values. Goodwill represents the excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed.

The Company's management exercises significant judgments in determining the fair value of assets acquired and liabilities assumed, as well as intangibles and their estimated useful lives. Fair value and useful life determinations are based on, among other factors, estimates of future expected cash flows and appropriate discount rates used in computing present values. These judgments may materially impact the estimates used in allocating acquisition date fair values to assets acquired and liabilities assumed, as well as the Company's current and future operating results. Actual results may vary from these estimates which may result in adjustments to goodwill and acquisition date fair values of assets and liabilities during a measurement period or upon a final determination of asset and liability fair values, whichever occurs first. Adjustments to the fair value of assets and liabilities made after the end of the measurement period are recorded within the Company's operating results.

***Long-Lived Assets, Including Definite-Lived Intangible Assets***

The Company reviews for the impairment of long-lived assets annually and whenever events and or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Such indicators include, among others, the nature of the asset, the projected future economic benefit of the asset, historical and future cash flows and profitability measurements. Definite-lived intangible assets primarily consist of customer relationships and trade names. An impairment loss would be recognized when the value of the undiscounted estimated future cash flows expected to result from the use of the asset and its eventual disposition is less than the carrying value. The Company measures the impairment loss based on the difference between the carrying amount and the estimated fair value. When an impairment exists, the related assets are written down to fair value. There were no impairment losses recognized during the for the years ended December 31, 2025 and 2024.

***Goodwill***

Goodwill, which represents the excess of purchase price over the fair value of net assets acquired in business combinations, is carried at cost. Goodwill is not amortized; rather, it is subject to a periodic assessment for impairment by applying a fair value-based test. Goodwill represents the excess of the purchase price in a business combination over the fair value of net assets acquired. Goodwill is not amortized but tested annually for impairment or when indicators of impairment are present. The test for goodwill impairment involves a qualitative assessment of impairment indicators. If indicators are present, a quantitative test of impairment is performed. Goodwill impairment, if any, is determined by comparing the reporting unit's fair value to its carrying value. An impairment loss is recognized in an amount equal to the excess of the reporting unit's carrying value over its fair value, up to the amount of goodwill allocated to the reporting unit. The Company's policy is to review goodwill for impairment on an annual basis as of the last day of the Company's fiscal year or more frequently, unless a triggering event requires an analysis sooner. There was no impairment of goodwill for the year ended December 31, 2025.

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***Revenue and Cost Recognition***

*Overview*

The Company generates revenue from the following sources: (1) cryptocurrency mining, (2) mining hosting services and (3) compute power.

In accordance with ASC 606, *Revenue Recognition,* the Company recognizes revenue from contracts with customers using a five-step model, which is described as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• identify the customer contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• identify performance obligations that are distinct;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• determine the transaction price;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• allocate the transaction price to the distinct performance obligations; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• recognize revenue as the performance obligations are satisfied.

*Revenue from Cryptocurrency Mining*

The Company participates in a third-party operated mining pool. As of April 2025, the pool operator is Luxor. Prior to April 2025, the pool operator was Foundry. As a result of the change in pool operator the Company updated its accounting policy to change the end of its contract period from 16:00:00 UTC to 23:59:59 UTC. As a participant in the third-party operated mining pool, the Company provides a service to provide computing power to the third-party operated mining pool. The Company's enforceable right to compensation begins when, and lasts as long as, the Company provides computing power to the mining pool operator.

**Step 1**: The Company has identified the third-party mining pool operator as its customer. The Company enters into a contract with the customer to provide its computing power to the customer's mining pool. The contracts are terminable without penalty at any time by either party, and thus the contract term is shorter than a 24-hour period and the contracts are continuously renewed.

Applying the criteria per ASC 606-10-25-1, the contract arises at the point that the Company provides computing power to the customer's mining pool, which is considered contract inception, because customer consumption is in tandem with delivery of the computing power.

**Step 2**: In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606's definition of a "distinct" good or service (or bundle of goods or services) if both of the following criteria are met:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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 (i.e., the good or service is capable of being distinct); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The entity's promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract).

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Based on these criteria, the Company has identified a single performance obligation of providing computing power to the mining pool operator. The continuous renewal options do not represent material rights because they do not provide the customer with the right to purchase additional goods or services at a discount. Specifically, the contract is renewed at the same terms, conditions, and rate as the current contract which is consistent with market rates, and there are no upfront or incremental fees in the initial contract.

**Step 3**: The Company receives non-cash consideration in the form of bitcoin, fair value of which the Company measures at 23:59:59 UTC and 16:00:00 UTC on the date of contract inception using the Company's principal market for bitcoin, Bitcoin Reference Rate, when the pool operator is Luxor and Foundry, respectively. The contract renews continuously throughout the day, and thus the value of the consideration should be assessed continuously throughout the day, and the Company has concluded to use the 23:59:59 UTC and 16:00:00 UTC bitcoin price each day when the pool operator is Luxor and Foundry, respectively. Revenue is recognized on the same day that control of the services transfers to the customer, which is the same day as contract inception. According to the customer contract, daily settlements are made to the Company by the customer based on the computing power provided over the contract periods occurring over a 24-hour period and the payout is made the following day. There are no other forms of variable considerations, such as discounts, rebates, refunds, credits, price concessions, incentives, performance bonuses, penalties, or other similar items.

The Company earns non-cash consideration based on the Full-Pay-Per-Share ("FPPS") payout method set forth by the customer in the form of bitcoin. The amount of bitcoin the Company is entitled to for providing hash calculations to the customer's mining pool under the FPPS payout method is made up of block rewards and transaction fees less mining pool fees determined as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The non-cash consideration calculated as a block reward over the continuously renewed contract periods is based on the total blocks expected to be generated on the Bitcoin Network for the daily 24-hour period beginning 0:00:00 UTC and 16:00:01 UTC and ending 23:59:59 UTC and 16:00:00 UTC when the pool operator is Luxor and Foundry, respectively, in accordance with the following formula: the computing power that the Company provides to the customer as a percent of the Bitcoin Network's total computing power, multiplied by the total Bitcoin Network block rewards expected to be generated for the same period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The non-cash consideration calculated as transaction fees paid by transaction requestors is based on the share of total actual fees paid over the continuously renewed contract periods beginning 0:00:00 UTC and 16:00:01 UTC and ending 23:59:59 UTC and 16:00:00 UTC when the pool operator is Luxor and Foundry, respectively, in accordance with the following formula: total actual transaction fees generated on the Bitcoin Network during the contract period as a percent of total block rewards the Bitcoin Network actually generated during the same period, multiplied by the block rewards the Company earned for the same period noted above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The sum of the block reward and transaction fees earned by the Company is reduced by mining pool fees charged by the customer for operating the mining pool based on a rate schedule per the mining pool contract. The fee charged during December 31, 2025 and 2024 end was 2.50% 0.43%, respectively. The mining pool fee is only incurred to the extent the Company provides computing power and generates revenue in accordance with the customer's payout formula during the continuously renewed contract periods beginning 0:00:00 UTC and 16:00:01 UTC and ending 23:59:59 UTC and 16:00:00 UTC daily, when the pool operator is Luxor and Foundry, respectively.

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**Step 4**: There is a single performance obligation (i.e., to provide computing power to the customer) for the contract; therefore, all consideration from the customer is allocated to this single performance obligation.

**Step 5**: The Company's performance is completed over time as the customer obtains control of the computing power. The performance obligation of computing power is fulfilled over time, as opposed to a point in time, because the Company provides the computing power throughout the contract period and the customer simultaneously obtains control of the service and uses it to produce bitcoin.

There is no deferred revenue or other liability obligations recorded by the Company since there are no payments in advance of the performance, and there are no remaining performance obligations after providing computing power.

*Revenue from Mining Hosting Services*

The Company has also entered into hosting contracts where it operates mining equipment owned by third parties within its facilities in exchange for a fee or reimbursement of electricity cost at a markup.

**Step 1**: The Company has identified the third-party mining equipment owners as its customer. The Company enters into a contract with the customer to host its miners on the Company's network. The contracts are terminable without penalty at any time if the termination is agreed upon by both parties, and thus the contract term is the stated term.

**Step 2:** In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606's definition of a "distinct" good or service (or bundle of goods or services) if both of the following criteria are met:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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 (i.e., the good or service is capable of being distinct); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The entity's promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract).

Based on these criteria, the Company has identified one performance obligation of hosting the mining equipment. The service the Company provides also includes monitoring, active troubleshooting, and various maintenance levels for the mining equipment.

**Step 3**: The Company receives non-cash consideration in the form of US Digital Coin ("USDC"). The Company uses a spot rate on of the date of payment from the customer to convert USDC to USD.

The Company's hosting contracts can contain service level agreement clauses, which guarantee a certain percentage of time the power will be available to its customer. In the rare case that the Company may incur penalties under these clauses, the Company recognizes the payment as variable consideration and a reduction of the transaction price and, therefore, of revenue, when not in exchange for a good or service from the customer.

Customer contracts can include advance payment terms in the form of monthly cash prepayments and/or upfront cash payments at contract inception. Advance payments are recorded as deferred revenue and recognized over time (generally, the month of hosting service to which they relate) as the customer simultaneously receives and consumes the benefits of the Company's performance. There is no significant financing component in these transactions due to the short-term nature of the payments.

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**Step 4**: No allocation of transaction price is required as there is only one performance obligation in each contract.

**Step 5**: The Company recognizes variable hosting revenue each month as the uncertainty related to the consideration is resolved, hosting services are provided to its customer, and its customer utilizes the hosting service (the customer simultaneously receives and consumes the benefits of the Company's performance). The Company's performance obligation related to these services is satisfied over time.

*Revenue from Compute Power*

The Company generates revenue primarily from providing compute power to a marketplace, but in some instances provides power directly to end users. The compute power is maintained by the Company and made available to customers for large-scale cloud processing.

Marketplace provider partners (RunPod Inc., for example) manage orchestration and customer acquisition in exchange for a revenue share. In RunPod's case, currently 80% of revenue is shared to QumulusAI and 20% to RunPod under RunPod's standard service terms.

**Step 1**: In arrangements with a marketplace provider partner, the Company has identified the marketplace as its customer. In arrangements entered into directly with end users, the end user is the customer.

The Company has entered into agreements which are structured around ongoing service delivery, with compute power provided on a usage basis. The contract is enforceable and includes defined terms for service levels, pricing, and revenue sharing. The contract is continuously active and renewed, with no penalties for termination, and services are delivered daily based on actual usage.

Applying the criteria per ASC 606-10-25-1, the contract arises at the point the Company begins providing compute power through its bare metal servers. This marks contract inception, as the customer's consumption of compute power is simultaneous with the Company's delivery of the service. The contract supports continuous usage-based billing, and the Company's enforceable right to compensation begins and continues as long as compute power hours are delivered and consumed by customers.

**Step 2**: In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606's definition of a "distinct" good or service (or bundle of goods or services) if both of the following criteria are met:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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 (i.e., the good or service is capable of being distinct); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The entity's promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract).

Based on these criteria, the Company has identified a single performance obligation to provide compute power customers. The continuous renewal options do not represent material rights because they do not provide the customer with the right to purchase additional goods or services at a discount. Specifically, the contract is renewed at the same terms, conditions, and rate as the current contract which is consistent with market rates, and there are no upfront or incremental fees in the initial contract.

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**Step 3**: In arrangements with a marketplace provider partner, the transaction price is based on net revenue shared by the marketplace to the Company. In arrangements entered into directly with end users, the transaction price is based on revenue received directly from end users for compute power. There is no non-cash consideration involved, and all payments are made in U.S. dollars. The contract does not include other forms of variable consideration such as rebates, penalties, or bonuses, except for service credits tied to uptime performance, which are treated as variable consideration and reduce the transaction price when applicable.

**Step 4**: There is a single performance obligation (i.e., to provide compute power) for the contract; therefore, all consideration from the customer is allocated to this single performance obligation.

**Step 5**: The Company's performance is completed over time as compute power is delivered and consumed. The performance obligation of computing power is fulfilled over time, as opposed to a point in time, because the Company provides the compute power throughout the contract period and the customer simultaneously obtains control of the service and integrates it into its platform offerings.

There are no deferred revenues or remaining obligations once compute power is delivered.

***Income Taxes***

The Company accounts for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and income tax basis of assets and liabilities, and for operating losses and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the years in which those items are expected to be realized. Tax law and rate changes are recorded in the period such changes are enacted. The Company establishes a valuation allowance when it is more likely than not that certain deferred tax assets will not be realized.

The Company recognizes a tax benefit from any uncertain tax positions only if they are more likely than not to be sustained upon examination based on the technical merits of the position. The amount of the accrual for which an exposure exists is measured as the largest amount of benefit determined on a cumulative probability basis that the Company believes is more likely than not to be realized upon ultimate settlement of the position. Interest and penalties related to unrecognized tax benefits are recognized as a component of income tax expense.

The "One Big Beautiful Bill Act" ("OBBBA") was signed into law in the United States on July 4, 2025. Key tax provisions under OBBBA include the restoration of 100% bonus depreciation, immediate expensing for domestic research and experimental expenditures, changes to the interest limitations in Section 163(j) of the U.S. Internal Revenue Code (the "Code"), updates to Global Intangible Low Taxed Income and Foreign-Derived Intangible Income rules, and expanded aggregation requirements under Section 162(m) of the Code. The application of the OBBBA to the Company did not have a material impact on its consolidated financial statements during the year ended December 31, 2025.

***Leases***

The Company accounts for leases in accordance with ASC 842, *Leases*. The Company determines if an arrangement is a lease at inception and classifies its leases at commencement. Operating and finance leases are presented as right-of-use ("ROU") assets and the corresponding lease liabilities are included in operating or finance lease liabilities, current and operating or finance lease liabilities on the Company's consolidated balance sheets. ROU assets represent the Company's right to use an underlying asset, and lease liabilities represent the Company's obligation for lease payments in exchange for the ability to use the asset for the duration of the lease term.

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ROU assets and lease liabilities are recognized at commencement date and determined using the present value of the future minimum lease payments over the lease term. For leases in which the rate is not implicit in the lease, the Company uses a discount rate based on a benchmark approach to derive an appropriate incremental borrowing rate to discount remaining lease payments. The Company benchmarked itself against other companies of similar credit ratings and comparable quality and derived imputed rates for a lease term length of 10 years. Some leases include multiple year renewal options. The Company's decision to exercise these renewal options is based on an assessment of its current business needs and market factors at the time of the renewal. Currently, the Company has certain leases for which the option to renew is reasonably certain, and therefore, options to renew were factored into the calculation of its right-of-use asset and lease liability as of December 31, 2025 and 2024. In addition, the Company does not recognize short-term leases that have a term of twelve months or less as ROU assets or lease liabilities for all asset classes. The Company recognizes operating lease expense on a straight-line basis over the lease term.

The Company has lease agreements which contain both lease and non-lease components, which it has elected to account for as a single lease component for all asset classes when the payments are fixed. As such, variable lease payments, including those not dependent on an index or rate, such as real estate taxes, common area maintenance, and other costs that are subject to fluctuation from period to period are not included in lease measurement.

***Segment Reporting***

In November 2023, the FASB issued ASU No. 2023-07, *Improvements to Reportable Segment Disclosures* (Topic 280). This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker ("CODM") and included within each reported measure of a segment's profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment's profit or loss in assessing segment performance and deciding how to allocate resources. See Note 22 - Segment Reporting for additional disclosures

***Net Income (Loss) per Share***

The calculation of earnings per share is based on the weighted average number of common shares or common stock equivalents outstanding during the applicable period. The dilutive effect of common stock equivalents is excluded from basic earnings per share and is included in the calculation of diluted earnings per share, unless their impact is antidilutive. Convertible notes, employee stock options and similar equity instruments granted by the Company are treated as potential ordinary shares outstanding in computing diluted earnings per share. Diluted shares outstanding are calculated using the if converted method for convertible notes and the treasury stock method for other potentially dilutive securities. Under the if converted method, the dilutive impact of securities is calculated as if conversion occurred at the beginning of the reporting period. Under the treasury stock method, the amount the employee must pay for exercising stock options, the amount of compensation cost for future service that the Company has not yet recognized and the amount of benefits that would be recorded in common shares when the award becomes deductible for tax purposes are assumed to be used to repurchase shares.

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On September 30, 2025, the Company affected the conversion of all authorized and issued shares of Preferred Stock into Common Stock. The conversion did not occur in accordance with the original terms of the Preferred Stock, and as such, the transaction was accounted for as an extinguishment of preferred stock (see Note 18) and the difference between the then current carrying amount of the preferred stock extinguished and the fair value of the common stock issued is accounted for as a deemed dividend. The deemed dividend was included within the net loss attributable to common stockholders.

***Loan Origination Costs***

Costs incurred in connection with securing loans payable have been capitalized and are being amortized as a component of interest expense over the term of the respective debt using the effective interest method. The unamortized balance of loan origination costs are reflected on the consolidated balance sheets as a direct deduction of the outstanding balance owed on the long-term debt.

***Stock Issuance Costs***

Stock issuance costs represent incremental costs incurred that are directly attributable to the sale of securities. The costs are charged against the gross proceeds of the respective sale and recorded as a reduction to equity.

***Distinguishing Liabilities from Equity***

The Company relies on the guidance provided by ASC 480, *Distinguishing Liabilities from Equit*y, and ASC 815-40, *Derivatives and Hedging: Contracts in Entity*'*s Own Equity,* 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 balance sheet ("mezzanine equity"). The Company will determine mezzanine 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.

***Stock-Based Compensation***

The Company measures the cost of employee and non-employee services in exchange for awards of equity instruments based on the grant-date fair value of the award. The fair value is determined using an option pricing model. The cost of awards of equity instruments is recognized on a straight-line basis over the vesting period, which is the requisite service period, and is recorded as stock-based compensation expense together with a corresponding increase in paid-in capital. The Company has elected to account for forfeitures of awards as they occur.

***Variable Interest Entities ("VIEs")***

The Company evaluates its interests in VIEs and will consolidate any VIE in which the Company has a controlling financial interest and are deemed to be the primary beneficiary. A controlling financial interest has both of the following characteristics: (1) the power to direct the activities of the VIE that most significantly impact its economic performance; and (2) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could be significant to the VIE. If both of the characteristics are met, the Company is considered to be the primary beneficiary and therefore will consolidate that VIE into its consolidated financial statements. See Note 9 - Equity Method Investments and Note 10 - Joint Ventures for additional disclosures.

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***Recently Issued Accounting Pronouncements - Adopted***

In August 2023, the FASB issued ASU 2023-05, *Business Combinations - Joint Venture Formations (Topic 805): Recognition and Initial Measurement.* This standard addresses the accounting for contributions made to a joint venture, upon formation, in a joint venture's separate financial statements. The new requirements are effective for all joint ventures within the ASU's scope that are formed on or after January 1, 2025. The Company adopted this standard on January 1, 2025. The adoption of this standard is reflected in the Company's consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, *Improvements to Income Tax Disclosures*, a final standard on improvements to income tax disclosures. The standard requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. The standard applies to all entities subject to income taxes and is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. For public business entities, the new requirements will be effective for annual periods beginning after December 15, 2024. The Company has adopted this standard effective January 1, 2025. The adoption of this standard is reflected in the Company's consolidated financial statements.

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

In November 2024, the FASB issued ASU 2024-03, *Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Topic 220): Disaggregation of Income Statement Expenses*. This guidance requires additional disclosure of certain amounts included in the expense captions presented on the statement of operations as well as disclosures about selling expenses. The ASU is effective on a prospective basis, with the option for retrospective application, for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted for annual financial statements that have not yet been issued. The Company is currently evaluating the impact of ASU 2024-03 on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-04, *Debt - Debt with Conversion and Other Options (Topic 470).* This guidance clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The ASU is effective on a prospective basis, with the option for retrospective application, for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities that have adopted the amendments in ASU 2020-06. As of December 31, 2025, the Company does not hold convertible debt instruments and therefore does not expect the adoption of this standard to have any impact on its consolidated financial statements.

In July 2025, the FASB issued ASU 2025-05, *Financial Instruments*—*Credit Losses (Topic 326).* This guidance contains amendments that provide decision-useful information to investors and other financial statement users while reducing the time and effort necessary to analyze and estimate credit losses for current accounts receivable and current contract assets. The amendments will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.

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In September 2025, the FASB issued ASU 2025-06, *Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40).* This guidance updates the capitalization guidance for internal-use software development costs by removing all references to software project development stages and provide further guidance on when an entity is required to start capitalizing eligible costs. This ASU is effective for annual periods beginning after December 15, 2027, and interim periods within those annual reporting periods. The Company is currently evaluating the impact of ASU 2025-06 on its consolidated financial statements and related disclosures.

Other recent accounting pronouncements did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements.

**Note 3. Business Combination**

On April 1, 2025 (the "Effective Date"), the Company entered into Contribution and Exchange Agreements, as amended (together, the "Acquisition Agreement"), with shareholders of The Cloud Minders, Inc. ("TCM"), pursuant to which each TCM shareholder contributed all outstanding equity securities in TCM to the Company in exchange for equity securities of the Company. As a result, TCM became a wholly owned subsidiary of the Company, with 75% of the Company's capital stock held by Company shareholders and 25% of the Company's capital stock held by former TCM shareholders (the "Acquisition"). The Acquisition formally closed on the Effective Date. The Company expects TCM's operations to diversify the Company's revenue base beyond Bitcoin mining and hosting. The addition of GPU-based infrastructure is anticipated to generate more stable, recurring revenue streams aligned with demand for high-performance computing resources across AI, machine learning, and data analytics sectors.

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| | | |
|:---|:---|:---|
|  | **Common** | **Series D** |
| Total Number of TCM Shares Exchanged | 8505783 | 1577085 |
| Conversion Ratio | 0.9081 | 0.9081 |
| Fair Value per Share (Controlling Interest) | $2.21 | $2.23 |
| Fair Value | $17054874 | $3195139 |
| **Total Fair Value Shares Exchanged**  | $**20250013** |  |
| Total Number of TCM Shares Held By the Company | 8966981 |  |
| Company Fair Value per Share (Non-Controlling) | $1.92 |  |
| **Fair Value Company's Investment in TCM** | $**17216604** |  |
| **Fair Value Replacement Options** | $**1883955** |  |
| **Total Purchase Price**  | $**39350572** |  |

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The following table summarizes the estimated fair value of the consideration and the estimated fair value of assets acquired and liabilities assumed associated with the Acquisition:

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| | |
|:---|:---|
| **Description** | **Fair Value** |
| Total purchase price | $39350572 |
| Estimated fair value of assets acquired: |  |
| Cash | $2441275 |
| Prepaid expenses | 96029 |
| Property and equipment | 7136180 |
| Customer relationships | 411700 |
| Trade name | 148080 |
| In-process research & development ("IPR&D") | 6777020 |
| Finance right-of-use assets, net | 5820225 |
| Total assets acquired | $22830509 |
| Estimated fair value of liabilities assumed: |  |
| Accounts payable | 172255 |
| Current portion of convertible note payable | 1716657 |
| Current portion of notes payable - related party | 104713 |
| Accrued expenses and other current liabilities | 555888 |
| Finance lease liabilities | 6078929 |
| Long-term notes payable, net of current portion | 6268321 |
| Total liabilities assumed | 14896763 |
| Goodwill | $31416827 |

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| | | |
|:---|:---|:---|
| **Intangible Assets** | **Estimated Fair Value** | **Estimated Useful Life** |
| Customer relationships | $411700 | 4 |
| Trade name | 148080 | 2 |
| IPR&D | 6777020 | N/A |
|  | $7336800 |  |

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The Company has applied the acquisition method of accounting in accordance with ASC 805 and recognized assets acquired and liabilities assumed of TCM at their fair value as of the date of acquisition, with the excess purchase consideration recorded to goodwill. As the Company finalizes the estimation of the fair value of the assets acquired and liabilities assumed, additional adjustments to the amount of goodwill may be necessary.

The preliminary purchase price allocation has not been finalized as of December 31, 2025 due to the final assessment of the fair values of the intangible assets, fair value estimates of assets acquired and liabilities assumed and is pending the completion of various items, including obtaining further information regarding the identification and valuation of all assets acquired and liabilities assumed. The Company recorded $23,542 of acquisition related costs within general and administrative expenses. Any adjustments to the estimates of purchase price allocation will be made in the periods in which the adjustments are determined, and the cumulative effect of such adjustments will be calculated as if the adjustments had been completed as of the acquisition date. The Company expects to finalize the purchase price allocation within 12 months from the acquisition date.

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*Pro Forma Financial Information*

The following table represents the revenue, net loss and net loss per share effect of the acquired company, as reported on a pro forma basis as if the acquisition occurred on January 1, 2024. These pro forma results are not necessarily indicative of the results that would have occurred if the acquisition had occurred on the first day of the period presented, nor does the pro forma financial information purport to represent the results of operations for future periods.

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| | | |
|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** |
|  | **2025** | **2024** |
| Revenues | $13158349 | $10778477 |
| Net loss | (5249286) | (15621718) |
| Net loss attributable to common stockholders | (94636233) | (15621718) |
| Basic and diluted net loss per share – on a pro forma basis | $(4.49) | $(0.95) |

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**Note 4. Revenue and Cost Recognition**

The following table provides the Company's revenue disaggregated by revenue stream:

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| | | |
|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2025** | **2024** |
| Revenue |  |  |
| Revenue from cryptocurrency mining | $816195 | $4184239 |
| Revenue from mining hosting services | 6090970 | 3911433 |
| Revenue from compute power | 4938705 |  |
|  | $11845870 | $8095672 |

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In accordance with ASC 606-10-50-13, the Company is required to include disclosure on its remaining performance obligations as of the end of the current reporting period. Due to the nature of the Company's contracts, these reporting requirements are not applicable, because the majority of the Company's remaining contracts meet certain exemptions as defined in ASC 606-10-50-14 through 606-10-50-14A, including (i) performance obligation is part of a contract that has an original expected duration of one year or less and (ii) the right to invoice practical expedient.

**Note 5. Fair Value of Financial Instruments**

The Company accounts for certain assets and liabilities at fair value and classify these assets and liabilities within the fair value hierarchy (Level 1, Level 2, or Level 3). The Company's other current assets and other current liabilities have fair values that approximate their carrying values.

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| | | | |
|:---|:---|:---|:---|
| **Description** | **Level** | **December 31, 2025** | **December 31, 2024** |
| Assets: |  |  |  |
| Digital assets | 1 | $— | $511376 |
| Liabilities: |  |  |  |
| Warrant liability | 3 | $1382955 | $4815890 |

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The Company accounts for its consideration transferred for the Company's equity method investments and investment in joint venture at fair value. The consideration transferred includes leased mining equipment, which is fair valued using Level 3 inputs under the fair value hierarchy as there are unobservable and significant inputs that provide asset value.

There were no financial liabilities that were transferred out of a Level 3 category.

**Note 6. Property and Equipment, Net**

The major classifications of property and equipment, including their estimated useful lives, are summarized as follows at the balance sheet dates:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Estimated Useful** <br> **Life (Years)** | **Estimated Useful** <br> **Life (Years)** | **Estimated Useful** <br> **Life (Years)** | **December 31, 2025** | **December 31, 2024** |
| Buildings and improvements | 10 |  | 40 | $961539 | $961539 |
| Miners |  | 3 |  | 9597138 | 9452284 |
| Mining related equipment |  | 5 |  | 2074733 | 2126123 |
| Transportation equipment | 3 |  | 7 |  | 11426 |
| Server equipment |  | 3 |  | 12146199 |  |
| Other equipment and furniture | 5 |  | 7 | 287112 | 1402 |
|  |  |  |  | 25066721 | 12552774 |
| Less: Accumulated depreciation |  |  |  | (13890636) | (9815755) |
|  |  |  |  | 11176085 | 2737019 |
| Construction in progress |  |  |  | 1326801 |  |
| Total property and equipment, net |  |  |  | $12502886 | $2737019 |

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For the years ended December 31, 2025 and 2024, depreciation expense relating to property and equipment amounted to $4,082,768 and $7,164,034, respectively.

During the year ended December 31, 2025, the Company recorded a gain on disposal of property and equipment of $462 relating to the sale of equipment during the year. During the year ended December 31, 2024, the Company recorded a loss on disposal of property and equipment of $2,525,408 related to the partial sale of T20 Mining Group, LLC.

**Note 7. Digital Assets, Net**

Changes in the Company's digital assets for the years ended December 31, 2025 and 2024, were as follows:

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| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
| Balance as of January 1 | $511376 | $109615 |
| Additions of digital assets | 3568733 | 4561953 |
| Sales of digital assets | (4162028) | (4348874) |
| Change in fair value of digital assets | 81919 | 188682 |
| Balance as of December 31 | $— | $511376 |

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The following table summarizes units held, cost basis and fair value of digital assets held as of December 31, 2024:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Asset** | **Symbol** | **Quantity of Digital Assets Held** | **Price** | **Cost Basis** | **Fair Value of** <br> **Crypto assets** |
| Bitcoin | BTC | 5.39 | $93970.45 | $298122 | $506230 |
| Ethereum Classic | ETC | 187.66 | 27.42 | 9913 | 5146 |
|  |  |  |  | $308035 | $511376 |

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**Note 8. Intangible Assets, Net**

As of December 31, 2025, intangible assets were comprised of the following:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Estimated** <br> **Useful Life** <br> **(Years)** | **Gross Carrying** <br> **Amount at** <br> **December 31,** <br> **2025** | **Accumulated Amortization** | **Net Book Value** <br> **at December** <br> **31, 2025** |
| Customer relationships | 4 | $411700 | $77194 | $334506 |
| Trade name | 2 | 148080 | 55530 | 92550 |
| IPR&D | N/A | 6777020 |  | 6777020 |
| Capitalized Software | N/A | 64437 |  | 64437 |
|  |  | $7401237 | $132724 | $7268513 |

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IPR&D and capitalized software are not amortized until the assets are substantially complete and ready for their intended use.

Amortization expense for the years ended December 31, 2025 and 2024 was $132,724 and zero, respectively.

As of December 31, 2024, the Company had no intangible assets.

The estimated future amortization expense for the next five years and thereafter is as follows:

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| | |
|:---|:---|
|  | **Future Amortization** <br> **Expense** |
| 2026 | $176965 |
| 2027 | 121435 |
| 2028 | 102925 |
| 2029 | 25731 |
| Total | $427056 |

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The weighted average remaining amortization period for the Company's intangible assets as of December 31, 2025 was 2.82 years.

**Note 9. Equity Method Investments**

*T20 Mining Group, LLC*

In March 2023, the Company entered into a Limited Liability Company Interest Purchase Agreement with Turn Key Mountain, LLC and 913 Hero, LLC ("T20 Purchase Agreement") to acquire a 50.01% ownership interest in T20 Mining Group, LLC ("T20"). Under the terms of the T20 Purchase Agreement, the Company leases certain equipment to T20 and promised to contribute $450,090 to T20 for the development of its digital asset mining operations. The Company determined that T20 is a VIE as the Company has a variable interest in T20 and T20 relies on funding from the Company, Turn Key Mountain, LLC, and 913 Hero, LLC to sustain its operations. The Company has determined that it is not the primary beneficiary of T20 as power to direct or control its significant activities related to the bitcoin mining hosting is shared with Turn Key Mountain, LLC and 913 Hero, LLC. Accordingly, the Company has not consolidated T20's results of operations and financial position. As the entity is not consolidated, it is accounted for as an equity method investment. The initial investment in T20 amounted to $1,677,197. The Company is entitled to 50.01% of the profits and losses of T20.

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In April 2024, the Company entered into a subsequent Limited Liability Company Interest Purchase Agreement with Bishops Bowl Capital, LLC ("Bishops Bowl Purchase Agreement"), whereby the Company sold 10.01% of its ownership interest in T20 to Bishops Bowl for consideration of $1,000,000. As the Company retained significant influence in T20 following its execution of the Bishops Bowl Purchase Agreement, the Company reduced the carrying amount of its equity method investment for the proportion sold in the amount of $164,954 and also recognized a gain of $835,046 related to the difference between the proceeds received and the carrying amount of the equity method investment sold. The Company will continue to account for its retained ownership interest of 40% under the equity method. During the second half of the year ended December 31, 2024, the Company and Bishops Bowl contributed equipment to T20 for the expansion of its digital asset mining operations. The Company increased the carrying amount of its equity method investment for the fair value of the assets contributed in the amount of $926,240 and also recognized a loss of $2,094,030 on the contribution of the assets. In February 2025, the Company contributed additional assets in the amount of $115,210. The additional contributions were made such that each partner's ownership percentages remained the same, with the Company and Bishops Bowl continuing to own 40% and 60%, respectively, of T20. The Company will continue to account for its retained ownership interest of 40% under the equity method.

During the years ended December 31, 2025 and 2024, the Company received distributions of $3,234,000 and $1,225,000 from T20, respectively. During the years ended December 31, 2025 and 2024, the Company's share of net income in T20 amounted to $1,917,517 and $1,008,559, respectively, which is included within income from equity method investments in the Company's consolidated statements of operations. As of December 31, 2025 and 2024, the Company's investment in T20 amounted to $4,227,130 and $5,428,404, respectively, and is included in the balance of equity method investments in the accompanying consolidated balance sheets.

Summarized financial information for T20 as of and for the years ended December 31, 2025 and 2024 is as follows:

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| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
| Total assets | $10754967 | $5620420 |
| Total liabilities | $2186787 | $1888902 |

---

For the years ended December 31, 2025 and 2024, T20 had net income of $3,781,347 and $2,373,079, respectively.

*The Cloud Minders LLC*

On November 1, 2023, the Company acquired an interest in TCM, a partnership that is involved in graphics processing unit cloud hosting services. The Company is initially entitled to 43% of the profit and losses from the investee. The acquisition cost totaled $4,300,000 and consisted of the issuance of the Company's common stock via a convertible note payable with TCM for $3,300,000 (see Note 16 - Convertible Note Payable) and a payable to TCM totaling $1,000,000 to be repaid over 12 months at no interest. Payments commence on January 1, 2024, and continue on the first of each subsequent month, in exchange for an additional 19,608 (approximately 6%) membership interest to the Company over the twelve months. TCM specializes in high-performance computing and artificial intelligence infrastructure within the cloud computing industry and offers graphics processing unit server hosting, equipped with the latest hardware for deep learning, data science, graphics rendering, and scientific research applications. Its services include configuration, reliability assurance, testing and validation, security measures, installation, and hardware rental for monetization. Accordingly, the Company has not consolidated TCM's results of operations and financial position. As the entity is not consolidated as of December 31, 2024, but the Company has significant influence over the investee, it is accounted for as an equity method investment.

------

During the year ended December 31, 2024, the Company's share of net loss in TCM amounted to $1,279,268, which is included within income from equity method investments in the Company's consolidated statements of operations. As of December 31, 2024, the Company's investment in TCM amounted to $3,229,211 and is included in the balance of equity method investments in the accompanying consolidated balance sheets. On April 1, 2025, the Company acquired 100% of TCM. Therefore, as of April 1, 2025, the Company does not account for TCM as an equity method investment as the entity is consolidated. See Note 3 - Business Combinations for additional details on the acquisition. From January 1, 2025 to the acquisition on April 1, 2025 the Company's share of net loss in TCM was $562,143. On April 1, 2025, the Company marked the value of its investment in TCM to its fair value of $17,216,604 immediately prior to the acquisition and recognized a gain of $14,549,536.

Summarized financial information for TCM as of and for the year ended December 31, 2024 is as follows:

---

| | |
|:---|:---|
|  | **December 31, 2024** |
| Total assets | $14479018 |
| Total liabilities | $11679962 |

---

From January 1, 2025 to the acquisition on April 1, 2025, TCM had a net loss of $1,307,308. For the year ended December 31, 2024, TCM had a net loss of $2,975,042.

*FCNC Venture, LLC*

In January 2023, the Company entered into a joint venture agreement with Blokbuster, LLC ("Blokbuster") to form FCNC. The Company has determined that it does not control the joint venture, as the Company's ownership is less than 50% and all major decisions of the joint venture require unanimous consent with Blokbuster. Accordingly, the Company has not consolidated the entity's results of operations and financial position. As the entity is not consolidated, it is accounted for as an equity method investment. The initial investment in FCNC amounts to $531,395, which was composed of $500,000 in cash and a promissory note for $31,395. The Company is entitled to 33% of the profit and losses and distributions of the entity. During the year ended December 31, 2024, the Company's share of net income in the joint venture amounted to $3,561, which is included within income from equity method investments in the Company's consolidated statements of operations.

During the second half of 2024, the Company sold its equity interest in FCNC. As of December 31, 2024, the balance of the Company's investment in the joint venture was zero.

**Note 10. Joint Ventures**

In October 2025, the Company entered into a joint venture agreement with ME Luna Qumulus LLC ("Moonshot") to form QAI Moon, which serves as the manager for two additional joint ventures: SPRE Brooklyn and SPRE NKC (Collectively, the "QAI Moon JVs").

------

Under the QAI Moon Operating Agreement, QumulusAI holds a 51% interest and Moonshot holds a 49% interest. QumulusAI appoints three of the five managers on the Board of Managers, giving it majority governance rights over significant decisions such as approving budgets, financing arrangements, and strategic initiatives.

For its ownership interests in QAI Moon, the Company contributed $213,000, funded through a share exchange rather than a direct cash payment. Under this arrangement, QumulusAI issued 19,723 common shares valued at $10.80 per share for a total value of $213,000.

For SPRE Brooklyn, QAI Moon contributed $900 and holds 900 Common Units, which comprises 100% of the entity's ownership interests.

For SPRE NKC, the Operating Agreement is between QAI Moon, LLC, DAF Compute LLC, and TCM. QAI Moon contributed $300 and holds 300 Common Units which represents 100% of the voting rights while DAF Compute LLC contributed $3,000,000 and holds 350 Preferred Units and TCM contributed $3,000,000 and holds 350 Preferred Units, for a total of 700 Preferred Units. Preferred Units provide economic rights only and do not carry any voting rights.

The QAI Moon JVs were formed to provide high-performance computing (HPC) infrastructure and services. Based on the governance structure and capital requirements, QAI Moon, SPRE Brooklyn and SPRE NKC are variable interest entities (VIEs), and QumulusAI consolidates the three JVs in its financial statements.

Accordingly, the entities are deemed VIEs because they rely on the Company's capital to sustain future operating expenses. QumulusAI is deemed the primary beneficiary of the VIEs because it has the power to direct the activities of the QAI Moon JVs determined to be most significant and has the benefits through its equity interests held. Accordingly, the Company consolidates the QAI Moon JVs balance sheet and results of operations.

As of December 31, 2025, the Company's consolidated balance sheets included $10,020,328 of assets due to the consolidation of the QAI Moon JVs included within property, plant, and equipment, net. Upon consolidating the QAI Moon JVs, no gain or loss was recognized. The Company's total risk of loss is the total $3,213,900 contributed into the QAI Moon JV's, as noted above.

**Note 11. Deposits on Power Equipment**

The Company makes deposits that represent prepayments made to premier suppliers and manufacturers to purchase compute power and related equipment at a preset price. The prepayments are applied to the purchase price when the vendor ships the equipment. As of December 31, 2025 and 2024, the Company had outstanding deposits for power equipment totaling $13,622,641 and $1,326,801, respectively.

**Note 12. Transactions with Related Parties**

As of and for the years ended December 31, 2025 and 2024, the Company had the following related party transactions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• As of December 31, 2025 and 2024, the Company had an outstanding loan payable due to a related affiliate of one of the stockholders in the amounts of $1,849,888 and $2,967,109, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• As of December 31, 2025 and 2024, the Company had an outstanding loan payable due to one of the stockholders in the amount of $2,000,000 and $2,000,000, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• As of December 31, 2025 and 2024, the Company had an outstanding loan payable due to various stockholders in the amount of $— and $20,000, respectively.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• As of December 31, 2025 and 2024, the Company had an outstanding line of credit due to a related affiliate in the amount of $— and $292,659, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• As of December 31, 2025 and 2024, the Company had an outstanding loan payable due to an advance to the buyer of its investment in joint venture, FCNC, in the amount of the outstanding balance of the loan receivable amounted to $— and $232,452, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• As referenced on Note 9 - Equity Method Investments, the Company owed $1,000,000 to TCM as a result of the cost to acquire an interest in TCM. As of December 31, 2025 and 2024, the balance outstanding on this payable was $— and $900,000, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• During the year ended December 31, 2024, the Company recognized bitcoin mining operating expenses in the amounts of $248,139 and $1,104,330 from FCNC and T20, respectively. As of December 31, 2024, amounts payable to these entities totaled $68,008 and are included in accounts payable on the Company's consolidated balance sheets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• During the year ended December 31, 2025, the Company recognized bitcoin mining operating expenses in the amounts of $— and $671,863 from FCNC and T20, respectively. As of December 31, 2025, amounts payable to these entities totaled $42,118 and are included in accounts payable on the Company's consolidated balance sheets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• During the years ended December 31, 2025 and 2024, the Company recognized equipment rental income totaling $— and $23,705 from FCNC and T20, respectively. At December 31, 2025 and 2024, amounts receivable from these entities totaled $26,786 and $28,597 and are included in accounts receivable on the Company's consolidated balance sheets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• As referenced in Note 9 – Equity Method Investments, during 2023, the Company acquired an interest in TCM. As part of the acquisition consideration, the Company issued a convertible promissory note (the "Note") to TCM, in the principal amount of $3,900,000. Refer to Note 16 - Convertible Note Payable for further information regarding the Company's accounting for the Note at issuance and as of December 31, 2025. As of December 31, 2025 and 2024, the balance outstanding on this loan was $— and $2,314,089, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Company is party to finance lease agreements with four entities in which a stockholder holds a capital interest. Additional details related to these lease agreements are provided in Note 24 - Leases.

**Note 13. Line of Credit**

During September 2023, the Company secured a line of credit with Trailhead Growth, LP with a maximum principal amount of $300,000 at an interest rate of 12%. The line of credit was collateralized by a blanket lien on certain assets and was guaranteed by certain of the Company's stockholders. The line of credit had a maturity date of October 1, 2024.

During April 2024, the Company amended its line of credit agreement with Trailhead Growth, LP with a maximum principal amount of $700,000 at an interest rate of 6%. The line of credit has a maturity date of 360 days following the first principal advance under the line of credit.

During May 2024, the Company made its first advance on the line of credit in the amount of $648,262, in which $6,418 of this amount is related to line of credit origination fees as a result of the advance. The line of credit had a maturity date of May 15, 2025. The line of credit was repaid in full on March 31, 2025. At December 31, 2025 and December 31, 2024, the Company had an outstanding balance of $0 and $292,659, respectively. Interest expense for the years ended December 31, 2025 and 2024 related to the line of credit was $9,955 and $15,108, respectively.

------

On September 19, 2025, the Company entered into a $500,000,000 non-recourse credit facility with a third party. The facility allows the Company to borrow stablecoins against up to 70% of its approved GPU deployments. The Company is under no obligation to draw financing under this credit facility. As of December 31, 2025, the Company has not made any advance on the line of credit.

**Note 14. Accrued Expenses**

Accrued expenses were comprised of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
| Accrued interest | $653783 | $647162 |
| Sales tax payable | 668543 | 484869 |
| Accrued hosting fees | 462822 | 810818 |
| Accrued payroll | 255637 | 139295 |
| Accrued bonus | 443558 |  |
| Other accrued expenses | 348994 | 231945 |
| Accrued expenses | $2833337 | $2314089 |

---

**Note 15. Notes Payable**

On March 19, 2021, the Company entered into a $2,000,000 convertible balloon note with Trailhead Income, LP. The note bears interest at 12% and matures on September 1, 2025. The note is secured by certain mining equipment. Interest-only payments are due on a quarterly basis through the maturity date. As of December 31, 2025 and 2024, the outstanding principal balance on the note was $2,000,000.

On April 14, 2022, the Company entered into a $5,000,000 balloon note with Alder Mortgage Group. The note bears interest at 12% and had an initial maturity date of May 1, 2023. The maturity date was extended to December 31, 2025. The note is secured by certain mining equipment. Interest-only payments are due on a monthly basis through the maturity date. On October 18, 2022, the Company made a principal payment of $450,000. The Company repaid the loan balance in full on December 19, 2025. As of December 31, 2025 and 2024, the outstanding principal balance was zero and $1,117,221, respectively.

On May 10, 2024, the Company entered into a $385,000 note with various lenders. The loan bears interest of 12% and matures on December 1, 2025. The note was repaid in full during the year ended December 31, 2024.

On February 15, 2022, the Company entered into a $1,849,888 balloon note with GC Opportunities 2 Private Fund. The note bears interest at 12% and matures on February 15, 2026. The Company repaid the loan in full during January 2026. The note is secured by certain mining equipment. The note was amended on October 4, 2022 to provide a onetime waiver of payment default for unpaid monthly interest due for July 15, 2022, August 15, 2022 and September 2022, and to defer interest due for six months from July 2022 to December 2022, until maturity. As of December 31, 2025 and 2024, the outstanding principal balance was $1,849,888.

------

On September 15, 2022, the Company entered into a note payable with Technogistics. The note bears interest at 12% and matures on May 15, 2024. The note is secured by certain mining equipment. During the year ended December 31, 2024, the remaining principal balance of $700,000 was converted to equity.

On April 11, 2022, the Company entered into two notes with Caterpillar Financial Services Corporation for an aggregate of $228,314. The notes bear interest at 1.49% and mature on April 11, 2027. The notes are secured by track loaders. Payments of principal and interest are due on a monthly basis through maturity. As of December 31, 2025 and 2024, the outstanding principal balance was $62,549 and $108,638, respectively.

On December 31, 2021, the Company entered into a $344,000 note with Gratus Holdings. The note bears interest at 8% and had an original maturity date of December 31, 2022. The Company repaid the loan in full during September 2025. As of December 31, 2025 and 2024, the outstanding principal balance was $— and $20,000, respectively.

On April 1, 2025, the Company acquired a loan from TCM as part of the acquisition. In January 2025 TCM, prior to termination of its largest finance lease, purchased the equipment leased under the agreement for a purchase price of $6,454,466. The Company financed the equipment purchase with a loan payable to a commercial bank in the amount of $6,450,000 at prime, subject to a 5% floor. The loan calls for principal and interest payments totaling $129,552 beginning in March 2025, and matures in January, 2030. As of December 31, 2025, the outstanding principal balance was $5,437,993.

On April 1, 2025, the Company acquired a loan from TCM as part of the acquisition. During 2024, TCM entered into a loan with a principal balance of $104,713. The loan bears interest at 0% and has a maturity date of March 16, 2026. The Company repaid the loan in full during November 2025. As of December 31, 2025, the outstanding principal balance was $—.

Notes payable at December 31, 2025 and 2024 consisted of the following:

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| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
| Note payable with interest at current prime rate, subject to 5% floor, maturing January 2030 | $5437993 | $— |
| Balloon notes payable with monthly interest payments of 12%, secured by certain specified mining equipment, maturities ranging from 2023 to 2026 - related party | 3849888 | 4967109 |
| Note payable on demand with monthly interest at 8%, unsecured - related party |  | 20000 |
| Notes payable with interest ranging from 0% to 1.49%, monthly payments of principal and interest, secured by track loaders, maturing 2027 | 62549 | 108638 |
| Note payable with 7% interest, maturing in April 2028 | 2430979 |  |
| Unamortized loan origination costs | (5992) | (26748) |
|  | 11775417 | 5068999 |
| Less: Current maturities | (5533469) | (1158009) |
| Notes payable, net of current maturities | $6241948 | $3910990 |

---

------

Maturities of notes payable are as follows:

---

| | |
|:---|:---|
| 2026 | $5577725 |
| 2027 | 1790194 |
| 2028 | 2804966 |
| 2029 | 1482796 |
| 2030 | 125728 |
| Total | $11781409 |

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**Note 16. Convertible Notes Payable**

On November 1, 2023, the Company entered into a Convertible Promissory Note Agreement (the "Note") with TCM at a face value of $3,900,000. Upon issuance, the Note was entered into at a discount of $600,000 and a fair value of $3,300,000. The Note bears interest at a rate of 0.1% per annum and matures on November 1, 2025. No scheduled payments are due under the Note, and the Note permits early partial or full prepayment under the Note at any time without any prepayment penalty.

Upon the occurrence of an event or events of default under the Note, including bankruptcy, an uncured material breach of the Note Agreement, or a board adopted resolution for liquidation, dissolution or winding-up of the Company, all accrued expenses, accrued interest, and all principal outstanding under the Note shall become immediately due and payable in full.

The Note provides for automatic conversion of the amount of any unpaid principal balance of the Note upon maturity into that number of shares of common stock by dividing such remaining principal balance by the conversion price of $1.00 per share. At maturity, all interest accrued and owing with respect to the remaining principal balance shall be forgiven by TCM.

The Company evaluated the embedded call and put features in accordance with ASC 815-15-25. The embedded puts are clearly and closely related to the debt host instrument and therefore are not required to be bifurcated and separately measured at fair value. The Company additionally determined that the embedded conversion feature did not meet the definition of a derivative under ASC 815 and therefore did not require bifurcation from the host debt instrument.

The Note was initially recorded at fair value, as it was issued as consideration in the acquisition of an equity method investment in TCM (see Note 9 for information regarding the Company's equity method investment). The Company reflected a discount of $600,000 on the Note at issuance to recognize at fair value at issuance. Subsequently, the Company amortizes the Note discount to interest expense over the period from issuance through the maturity date, at an effective interest rate of 8.5%. For the years ended December 31, 2025 and 2024, the Company recognized $135,334 and $294,260 as interest expense, respectively.

For the years ended December 31, 2025 and 2024, the Company recorded accrued interest of $612 and $612, respectively.

Immediately prior to the acquisition of TCM, the Company repaid the principal balance of the Note and accrued interest in full on March 31, 2025. Upon the repayment of the Note, the Company recognized a loss on extinguishment of $153,834 in the consolidated statements of operations.

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As part of its acquisition of TCM, the Company assumed convertible promissory notes to various investors with an aggregate principal amount of $3,000,000. The convertible notes were issued between May 10, 2024 and June 11, 2024, bear interest at 35% per annum, compounded annually, and mature on December 1, 2025, unless earlier converted or repaid.

The notes contain embedded and redemption features subject to bifurcation and separate accounting as derivative liabilities under FASB ASC 815, Derivatives and Hedging. In accordance with ASC 815, the Company evaluated the terms of the notes and determined that the financial impact derived from the embedded and redemption features was immaterial to the Company's financial position and results of operations. As such, no separate liability resulting from bifurcation has been recorded.

On July 1, 2024, $1,283,343 of principal balance was converted to TCM preferred stock at a conversion price of $1.00 per share. In May and September 2025, the Company settled $566,657 in principal through the issuance of 514,592 shares of the Company's Series D Preferred Stock. The fair value of the Series D Preferred Stock was $1,711,837 and recognized a loss on extinguishment of $954,761. On September 5, 2025, the Company paid off $1,150,000 in principal and $519,055 in accrued interest.

The carrying amount of the convertible notes as of December 31, 2025 and 2024 is summarized as follows:

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| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
| Outstanding principal | $– $| 3226548 |
| Unamortized amount | – | (218074) |
| **Net carrying value** | $– $| 3008474 |

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**Note 17. Income Taxes**

The components of the income tax expense were as follows:

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| | | |
|:---|:---|:---|
|  | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
|  | **2025** | **2024** |
| **Current** |  |  |
| Federal | $— | $— |
| State |  |  |
| **Total current expense** |  |  |
| **Deferred** |  |  |
| Federal | 375418 |  |
| State | 47963 |  |
| **Total deferred expense** | 423381 |  |
| **Total income tax expense** | $423381 | $— |

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The Company elected to prospectively adopt the guidance in ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures". The following table reconciles the U.S. federal statutory income tax rate of 21% to the Company's effective income tax rate for the year ended December 31, 2025 in accordance with the guidance in ASU 2023-09:

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| | | |
|:---|:---|:---|
|  | **For the Year Ended December 31, 2025** | **For the Year Ended December 31, 2025** |
|  | **Amount** | **Percentage** |
| U.S. Federal Statutory tax rate | $(847665) | 21.0% |
| State and Local Income Taxes, Net of Federal Income Tax Effect (a) | 47963 | (1.2)% |
| Changes in Valuation Allowances | 1203715 | (29.8)% |
| Nontaxable or Nondeductible items |  |  |
| Stock-based Compensation Expense | 69815 | (1.8)% |
| Change in fair value of warrant liabilities | 1162731 | (28.8)% |
| Gain on debt redemption | 200500 | (5.0)% |
| Equity Investment Remeasure | (3055403) | 75.7% |
| Partnership JV Income | 73070 | (1.8)% |
| Other | 31722 | (0.8)% |
| Other Adjustments |  |  |
| TCM Acquisition | 1043417 | (25.8)% |
| Opening Balance Sheet Adjustments | 493516 | (12.2)% |
| Effective Tax Rate | $423381 | (10.5)% |

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(a) State taxes in Georgia and Oklahoma make up the majority of the tax effect in this category.

The reconciliation of the U.S. statutory rate of 21% to the Company's effective tax rate for the year ended December 31, 2024 in accordance with the guidance prior to the adoption of ASU 2023-09 is summarized as follows:

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| | |
|:---|:---|
|  | **For the Year Ended** <br> **December 31, 2024** |
| Tax expense (benefit) at federal statutory rate (21%) | $(2822472) |
| Increase (decrease) resulting from: |  |
| State income taxes, net of federal income tax benefit | (152024) |
| Change in tax rate | 64518 |
| Permanent differences | 639425 |
| Deferred adjustment | 139118 |
| Change in valuation allowance | 2131435 |
| Income tax expense | $— |

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The significant components of the Company's deferred tax assets and liabilities were as follows:

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| | | |
|:---|:---|:---|
|  | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
|  | **2025** | **2024** |
| **Deferred tax assets:** |  |  |
| Accrual to cash | $725655 | $446232 |
| Cumulative net operating loss carryforwards | 8148363 | 4896576 |
| Depreciation |  | 111340 |
| Amortization |  | 2722 |
| Stock-based compensation | 299750 | 125448 |
| Section 174 | 163151 |  |
| Other | 48299 | 26074 |
| Total deferred tax assets | 9385218 | 5608392 |
| Valuation allowance | (6757870) | (5162310) |
| Net deferred tax assets | 2627348 | 446082 |
| **Deferred tax liabilities:** |  |  |
| Depreciation | (4477) |  |
| Investments | (1237872) | (446082) |
| Amortization | (1808380) |  |
| Total deferred tax liabilities | (3050729) | (446082) |
| **Net deferred tax assets (liabilities)** | $(423381) | $— |

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As of December 31, 2025, the Company had $35,362,165 and $22,201,334 of federal and state gross Net Operating Losses ("NOLs"), respectively, that may be available to offset future taxable income. As of December 31, 2024, the Company had $22,988,528 and $20,294,014 of gross federal and state tax NOLs, respectively. All NOLs were generated after the enactment of the Tax Cuts and Jobs Act, and as such are carried forward indefinitely, but can only be utilized to offset up to 80% of taxable income in any given year.

As of December 31, 2025, the Company had a partial valuation allowance against deferred tax assets due to the TCM acquisition which included IPR&D. The reversal of the IPR&D DTL is a source of income in future years that will not be fully offset by the Company's NOL DTA due to the 80% annual limitation. This income is not subject to a valuation allowance. The Company maintained the valuation allowance against all other DTAs due to the three-year cumulative loss. As of December 31, 2024 the Company had a full valuation allowance against deferred tax assets based on its cumulative operating results and three-year cumulative loss. The Company evaluated all evidence, both positive and negative, in assessing the likelihood of realizability and the Company determined it was not more likely than not it would be able to realize the deferred tax assets As of December 31, 2025 and 2024, the Company had a total valuation allowance of $6,757,870 and $5,162,310, respectively, and the net change in the valuation allowance was $1,595,560.

As of December 31, 2025 and 2024, the Company had no unrecognized tax benefits.

The Company files income tax returns in the U.S. federal jurisdiction and in various state jurisdictions. Due to the NOL carryforward, tax years 2020 through 2025 remain open to examination by the major taxing jurisdictions to which the Company is subject. There are no open examinations that would have a meaningful impact to the Company's consolidated financial statements.

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The utilization of the Company's net operating losses may be subject to a substantial limitation in the event of any significant future changes in its ownership structure under Section 382 of the Internal Revenue Code and similar state provisions. Such limitation may result in the expiration of the net operating loss carryforwards before their utilization. We have not conducted any studies to determine annual limitations, if any, that could result from such changes in ownership.

**Note 18. Stockholders' Equity (Deficit)**

*Preferred Stock*

On September 30, 2025, the Company affected the conversion of all authorized and issued shares of Preferred Stock into Common Stock, as agreed to by all holders of Preferred Stock. Accordingly, there are no shares of Preferred Stock authorized or outstanding as of December 31, 2025. As a result, there is no liquidation preference as of December 31, 2025.

The conversion did not occur in accordance with the original terms of the Preferred Stock (as described below), as the Company provided the holders of the Preferred Stock with one share of Common Stock for every share of Preferred Stock outstanding, plus an additional share of Common Stock for every $10.80 of unpaid liquidation preference prior to the conversion transaction. As such, the transaction was accounted for as an extinguishment of preferred stock. The Company compared the fair value of all shares of Common Stock issued in the conversion transaction to the then current carrying amount of the Preferred Stock, and recognized the difference of $89,386,947 as a deemed dividend in accordance with ASC 260-10-S99-2. In the absence of retained earnings, and as the Common Stock has no par value, the Company recognized the deemed dividend in common stock (as an offset to the recognized issuance of the Common Stock).

Prior to September 30, 2025, the Company has designated a portion of the authorized shares of preferred stock as Series A, Series B, Series C and Series D Preferred stock, and the issuance of total designated shares cannot exceed the aggregate number of preferred stock shares authorized for issuance. As of December 31, 2024, the authorized number of shares of Series A, Series B, Series C, and Series D Preferred stock were 5,453,876, 5,856,097, 3,690,027 and 10,000,000. In connection with the acquisition of TCM, the Company issued 1,432,182 Series D Preferred Stock on April 1, 2025.

All shares of Series A, Series B, Series C and Series D Preferred stock will, with respect to dividend rights, redemption rights and rights upon the liquidation, dissolution or winding-up of this corporation, rank on parity with all other series of Preferred Stock and senior to common stock. Each holder of Series A, Series B, Series C, and Series D Preferred stock shall be entitled to one vote for each share of stock held. Except as required by applicable law, the holders of Series A, Series B, Series C, and Series D Preferred stock and the holders of all other series of preferred stock and of common stock shall vote together as a single voting group on all matters submitted to a vote by the Company. Each share of Preferred Stock held by a particular holder shall automatically, without any further action, convert into one (1) fully paid and nonassessable share of common stock upon a transfer of such share or upon the preferred capital account of such holder of such Preferred Stock being paid in its entirety.

One holder of 729,448 shares of Series A Preferred stock and 634,132 shares of Series B Preferred stock held a non-contingent redemption right, therefore these shares are classified within mezzanine equity on the balance sheet as of December 31, 2024. The remaining shares of Series A and B Preferred stock did not contain this redemption right and are classified in permanent equity.

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Below is a summary of activity of Preferred Stock historically classified within mezzanine equity:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Series A Preferred Stock** | **Series A Preferred Stock** | **Series B Preferred Stock** | **Series B Preferred Stock** |
|  | **Shares** | **Amount** | **Shares** | **Amount** |
| Balance at January 1, 2024 | 729448 | $811049 | 634132 | $1221512 |
| Balance at December 31, 2024 | 729448 | $811049 | 634132 | $1221512 |
| Balance at December 31, 2025 |  | $— |  | $— |

---

*Common Stock*

The Company is authorized to issue up to 500,000,000 shares of common stock, without any par value per share. Each holder of common stock is entitled to one vote for each share held of record on all matters to be voted on by such holders. Holders of common stock are entitled to receive dividends, if declared. Upon liquidation, dissolution or winding-up, holders of common stock are entitled to share ratably in the net assets legally available for distribution after payment of all debts and other liabilities. During the year ended December 31, 2025, the Company paid $36,759 to holders of common stock related to dividends declared during 2021 which had been recorded on the consolidated balance sheet as dividends payable.

**Note 19. Warrants**

*Type 1 Warrants*

The warrants were issued during the year ended December 31, 2022 in conjunction with Series A Preferred Stock in satisfaction of outstanding debt. The warrants were not considered indexed to the issuer's stock pursuant to ASC 815, as the warrants are subject to vesting upon the thirty-six (36) mensiversaries of the issuance date, at a rate of one thirty-sixth (1/36<sup>th</sup>) per month. At the option of the Company, the Company can return to the holder any cash it previously received from the holder. Upon the occurrence of such return of capital, the vesting schedule recasts based on amount return and remaining time period to vest. As this contingency is based on the underlying capital account of the warrant holder it violates the fixed-for-fixed option pricing model. As such, the Company recorded the Warrants as liabilities initially measured at fair value with subsequent changes in fair value recognized in earnings each reporting period. 961,256 of the warrants are pre-funded warrants.

The Type 1 warrants are "penny warrants", meaning they have an exercise price of $0.01 ($0.03 after the Reverse Stock Split). The fair value of these penny warrants was calculated as the Company's stock price less the exercise price of $0.01 ($0.03 after the Reverse Stock Split) (i.e., intrinsic value). The grant date fair value of the Type 1 Warrants were $692,103. The fair value of the warrants as of December 31, 2025 and 2024 was $1,382,955 and $4,815,890, respectively.

*Type 2 Warrants*

Various individuals performed professional services for the Company during the years ended December 31, 2025 and 2024 and were issued warrants as payment for the services. The measurement of fair value of the Warrants was determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance. The grant date fair value of these Warrants issued during the years ended December 31, 2025 and 2024 was estimated to be $134,502 and $188,352, respectively, upon issuance. The warrants issued are not redeemable in cash at the choice of the holder, are not mandatorily redeemable into common stock, and are classified as equity instruments. As the Warrants vest immediately, the fair value of these warrants was recognized in operating expenses in the Company's consolidated statements of operations during the years ended December 31, 2025 and 2024.

------

*Type 3 Warrants*

The warrants were issued in conjunction with the private placement of Series D Preferred Stock and common stock. The measurement of fair value of the Warrants was determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance (i.e., share price, exercise price, term, volatility, risk-free rate, and expected dividend rate).

In connection with issuances of common stock during the year ended December 31, 2025 and preferred stock during the year ended December 31, 2024, the Company issued warrants for common stock of the Company to placement agents, debt holders and Series D Preferred stock holders. The warrants entitle holders to purchase 50,000 shares of common stock at a purchase price of $9.00 per share, 50,514 shares of common stock at a purchase price of $10.80, and 20,000 shares of common stock at a purchase price of $3.00 per share. The warrants issued are not redeemable in cash at the choice of the holder, are not mandatorily redeemable into common stock, and are classified as equity instruments. The warrants were reflected as a reduction to additional paid-in capital as of the issuance date based on relative fair value, with $544,645 and $69,601 recognized during the years ended December 31, 2025 and 2024, respectively.

*Type 4 Warrants*

The warrants were issued in conjunction with the modification of certain loans. The measurement of fair value of the Warrants was determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance (i.e., share price, exercise price, term, volatility, risk-free rate, and expected dividend rate).

In connection with modifications of certain loans during the year ended December 31, 2024, the Company issued warrants for common stock of the Company to debt holders. The warrants entitle holders to purchase 76,718 shares of common stock at a purchase price of $3.00 per share. The warrants issued are not redeemable in cash at the choice of the holder, are not mandatorily redeemable into common stock, and are classified as equity instruments. The fair value of the warrants of $154,687 has been recognized as a loss on extinguishment in the Company's consolidated statements of operations during the year ended December 31, 2024.

*Type 5 Warrants*

The warrants were issued in conjunction with certain investors' investment in TCM. The measurement of fair value of the Warrants was determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance (i.e., share price, exercise price, term, volatility, risk-free rate, and expected dividend rate).

In connection with certain investors' investments in TCM during the year ended December 31, 2024, the Company issued warrants exercisable into common stock of the Company. The warrants entitle holders to purchase 55,500 shares of common stock at a purchase price of $3.00 per share. The warrants issued are not redeemable in cash at the choice of the holder, are not mandatorily redeemable into common stock, and are classified as equity instruments. The grant of these warrants did not result in an increase of the Company's ownership in TCM. As the Company is paying a cost on behalf of TCM, the fair value of the warrants of $476,145 has been recognized in general and administrative expense in the Company's consolidated statements of operations during the year ended December 31, 2024.

------

*Type 6 Warrants*

The warrants were issued in connection with the purchase of mining equipment. The measurement of fair value of the Warrants was determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance (i.e., share price, exercise price, term, volatility, risk-free rate, and expected dividend rate).

In connection with the purchase of mining equipment in September 2025, the Company issued the seller warrants exercisable into common stock of the Company. The warrants entitle holders to purchase 13,334 shares of common stock at a purchase price of $10.80 per share. The warrants issued are not redeemable in cash at the choice of the holder, are not mandatorily redeemable into common stock, and are classified as equity instruments. The fair value of the warrants of $104,854 has been recognized in property and equipment, net in the Company's consolidated balance sheet as of December 31, 2025.

*Type 7 Warrants*

The warrants were issued in connection with the settlement of lease liabilities. The measurement of fair value of the Warrants was determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance (i.e., share price, exercise price, term, volatility, risk-free rate, and expected dividend rate).

In connection with the settlement of certain finance lease liabilities during the year ended December 31, 2025, the Company issued warrants exercisable into common stock of the Company. The warrants entitle holders to purchase 128,275 shares of common stock at purchase prices ranging from $3.00 to $10.80 per share. The warrants issued are not redeemable in cash at the choice of the holder, are not mandatorily redeemable into common stock, and are classified as equity instruments. The fair value of the warrants of $720,366 has been recognized in loss on settlement of lease liability in the Company's consolidated statements of operations during the year ended December 31, 2025.

The summary of stock warrant activity is as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Number of** <br> **Warrants** | **Weighted** <br> **Average** <br> **Exercise price** <br> **($)** | **Weighted** <br> **Average Grant-**<br> **Date Fair Value** <br> **($)** | **Weighted** <br> **Average** <br> **Remaining** <br> **Contractual** <br> **Life (in Years)** |
| Warrants outstanding as of January 1, 2024 | 1004964 | 0.12 | 1.59 | 2.26 |
| Granted | 434998 | 3.00 | 2.01 |  |
| Warrants outstanding as of December 31, 2024 | 1439962 | 1.02 | 1.72 | 2.31 |
| Granted | 195696 | 9.36 | 7.83 |  |
| Exercised | (872100) | 0.27 | 1.78 |  |
| Warrants outstanding as of December 31, 2025 | 763558 | 4.20 | 3.47 | 2.94 |
| Warrants exercisable as of December 31, 2025 | 758568 | 4.26 | 3.55 | 3.21 |

---

------

The total fair value of warrants granted during the years ended December 31, 2025 and 2024 amounted to $1,537,682 and $888,532, respectively. The Black-Scholes model utilized the following inputs to value the warrants granted:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2025** | **2025** | **2024** | **2024** | **2024** |
| **Warrant Valuation Assumptions:** |  |  |  |  |  |
| Risk-free interest rate | 3.5% | 3.7% | 3.9% | to | 4.5% |
| Expected term (years) | 2.83 | 3.42 | 4.82 | to | 5.00 |
| Expected volatility | 117% | 123% | 127% | to | 131% |
| Expected dividend yield |  | —% |  |  | —% |

---

**Note 20. Stock-Based Compensation**

WAHA and SPRE sponsor stock-based compensation plans known as the 2021 Option Plan and 2022 Plan, respectively (the "Plans"). The number of shares of common stock authorized for issuance under the Plans, prior to the merger into the Company, was 74,000. Pursuant to the contribution and exchange agreement with the Company, the total number of shares of common stock authorized for issuance are 1,461,307 shares.

The Plans allow the Company to grant incentive stock options and non-qualified stock options. The persons eligible to receive awards are the employees, consultants and directors of the Company and its affiliates. Other than incentive stock options that are granted to a stockholder who owns more than 10% of the total combined voting power of all classes of the stock of the Company or of its parent or affiliates (a "Ten Percent Stockholder"), stock options are exercisable for up to ten years from the grant date, at an option price per share not less than the fair market value on the date the option is granted. A Ten Percent Stockholder shall not be granted an incentive stock option unless the option exercise price is at least 110% of the fair market value of the common stock at the grant date and the option is not exercisable after the expiration of five years from the grant date. Incentive stock options may be granted to employees of the Company or any subsidiary corporation. Awards other than incentive stock options may be granted to employees, consultants and directors. The option vesting schedule for options granted is determined at the time of the grant. The Plans provide for accelerated vesting of unvested options in the event of a change in control.

------

Pursuant to the contribution and exchange agreement, the number of options outstanding as of the date of the agreement were converted in accordance with the Company's conversion ratio. The following is a summary of stock option activity during the years ended December 31, 2025 and 2024, effective for the conversion:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Number** <br> **of Options** | **Weighted** <br> **Average** <br> **Exercise** <br> **price ($)** | **Weighted** <br> **Average** <br> **Grant-**<br> **Date Fair** <br> **Value ($)** | **Weighted** <br> **Average** <br> **Remaining** <br> **Contractual** <br> **Life (in** <br> **Years)** | **Aggregate** <br> **Intrinsic** <br> **Value** |
| Options outstanding as of January 1, 2024 | 342839 | 2.49 | 2.01 | 9.2 | $238210 |
| Granted | 245332 | 1.50 | 2.08 |  |  |
| Options outstanding as of December 31, 2024 | 588171 | 1.92 | 2.04 | 8.8 | $1976425 |
| Granted | 693692 | 1.79 | 5.12 |  |  |
| Exercised | (54425) | (1.93) | (4.81) |  |  |
| Canceled | (45404) | (0.69) | (5.08) |  |  |
| Options outstanding as of December 31, 2025 | 1182034 | 1.93 | 3.75 | 8.7 | $11611870 |
| Options exercisable as of December 31, 2025 | 1071410 | 1.67 | 2.47 | 6.2 |  |

---

For the years ended December 31, 2025 and 2024, the total fair value of the options granted amounted to $3,489,371 and $510,178, respectively. The Black-Scholes model utilized the following inputs to value the options granted during the years ended December 31, 2025 and 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2025** | **2025** | **2024** | **2024** |
| Option Valuation Assumptions: |  |  |  |  |
| Risk-free interest rate | 3.7% | 4.4% | 3.8% | 4.6% |
| Expected term (years) | 0.04 | 5.0 | 4.06 | 5.0 |
| Fair value of underlying common stock | $5.04 | $10.80 | $— | 2.37 |
| Exercise price | $0.69 | $10.80 | $1.11 | $3.00 |
| Expected volatility | 98.2% | 123.0% | 127.0% | 133.0% |
| Expected dividend yield |  | —% |  | —% |

---

The Company recognized $922,740 and $313,640 in stock-based compensation during the years ended December 31, 2025 and 2024, respectively, in connection with issued stock options. As of December 31, 2025, non-vested outstanding options totaled 111,697 and the Company expects to recognize $535,510 of stock-based compensation for the non-vested options over the remaining weighted-average contractual period of 1.4 years. Stock-based compensation is recorded in general and administrative expenses in the Company's consolidated statements of operations.

------

**Note 21. Earnings (Net Loss) per Share**

The following table sets forth the computation of the basic and diluted net loss per share:

---

| | | |
|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2025** | **2024** |
| Net loss attributable to common stockholders | $(93676328) | $(13184374) |
| Net loss per share attributable to common stockholders, basic and diluted | $(4.63) | $(0.96) |
| Weighted-average common stock outstanding, basic and diluted | 20249377 | 13796790 |

---

The table below sets forth all outstanding potentially dilutive securities which were not included in the calculation of diluted earnings per share because their impact would have been antidilutive.

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
| Potentially dilutive securities: |  |  |
| Warrants | 635150 | 478713 |
| Stock options | 1182034 | 588171 |
| Convertible note |  |  |
| Series A Preferred Stock |  | 4713515 |
| Series B Preferred Stock |  | 5205630 |
| Series C Preferred Stock |  | 3663841 |
| Series D Preferred Stock |  | 9089000 |
| Total | 1817184 | 23738870 |

---

**Note 22. Segment Reporting**

As part of the Acquisition of TCM on April 1, 2025, (See Note 3 - Business Combination), the Company acquired a new revenue stream, "Revenue from compute power" (See Note 2). Accordingly, as of December 31, 2025, the Company operates as two reporting segments. The Company's segments are Bitcoin and High-performance computing ("HPC"). The Bitcoin segment's business is focused on bitcoin mining and hosting. The HPC segment's business is focused on compute power.

The HPC segment was not a part of the Company until the segment was acquired on April 1, 2025. The GDH segment's operations have remained consistent for all periods presented, however, the Company only had one operating and reportable segment prior to the acquisition.

Operating income (loss) is the primary measure used by the Company's CODM to evaluate income generated from segment assets (return on assets) in deciding whether to reinvest profits into specific service offerings within the segment, such as for entering into significant contracts, hiring of key management or executive personnel, or making significant capital investment decisions. While the CODM also reviews segment gross profit and net income, those measures are supplemental and are not the primary basis for assessing segment performance or making resource allocation decisions.

As of December 31, 2025, the Bitcoin and HPC segments had total assets of $14,419,727 and $77,314,766, respectively. As of December 31, 2024, the Bitcoin and HPC segments had total assets of $20,345,894 and $0, respectively. The entire goodwill balance of $31,416,827 as of December 31, 2025 was allocated to the HPC segment.

------

Revenue and costs are directly attributed to our segments, and the revenues recognized as well as the costs incurred in generating those revenues within each segment are distinguishable based on the information systems in which each segment's financial information gets recorded. There are no intersegment revenues or other transactions between the two segments that are eliminated in consolidation by the Company for external reporting. Other (expense) income, net primarily consists of Change in fair value of digital assets and Gain (loss) on disposal of property and equipment for the Bitcoin segment; and Gain on remeasurement of investment in TCM for the HPC segment. The Company also retains various other income and corporate expenses that are not allocated to the reportable segments, which are presented as "Other" in the reconciliation below.

The table below presents information about reported segments for the years ended December 31, 2025 and 2024:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** |
|  | **Bitcoin** | **HPC** | **Total Reportable Segments** | **Other** | **Total** |
| Revenue from cryptocurrency mining | $816195 | $— | $816195 | $— | $816195 |
| Revenue from mining hosting services | 6090970 |  | 6090970 |  | 6090970 |
| Revenue from compute power |  | 4938705 | 4938705 |  | 4938705 |
| Total revenue | 6907165 | 4938705 | 11845870 |  | 11845870 |
| Cost of revenue | 4723646 | 1697561 | 6421207 |  | 6421207 |
| Gross profit | 2183519 | 3241144 | 5424663 |  | 5424663 |
| Operating expenses | 3868949 | 7111668 | 10980617 | 4703223 | 15683840 |
| **Operating loss** | (1685430) | (3870524) | (5555954) | (4703223) | (10259177) |
| Other (expense) income, net | 1999898 | 12781326 | 14781224 | (8558545) | 6222679 |
| Income tax expense |  |  |  | 423381 | 423381 |
| **Net (loss) income** | $314468 | $8910802 | $9225270 | $(13685149) | $(4459879) |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** |
|  | **Bitcoin** | **HPC** | **Total Reportable Segments** | **Other** | **Total** |
| Revenue from cryptocurrency mining | $4184239 | $— | $4184239 | $— | $4184239 |
| Revenue from mining hosting services | 3911433 |  | 3911433 |  | 3911433 |
| Total revenue | 8095672 |  | 8095672 |  | 8095672 |
| Cost of revenue | 5371049 |  | 5371049 |  | 5371049 |
| Gross profit | 2724623 |  | 2724623 |  | 2724623 |
| Operating expenses | 9047961 |  | 9047961 | 1462620 | 10510581 |
| **Operating loss** | (6323338) |  | (6323338) | (1462620) | (7785958) |
| Other (expense) income, net | (1620664) |  | (1620664) | (3777752) | (5398416) |
| Income tax expense |  |  | ⸺ |  |  |
| **Net (loss) income** | $(7944002) | $— | $(7944002) | $(5240372) | $(13184374) |

---

**Note 23. Commitments and Contingencies**

In the normal course of business, the Company is at times subject to pending and threatened legal actions. In management's opinion, any potential loss resulting from the resolution of these matters will not have a material effect on the results of operations, financial position or cash flows of the Company.

As of December 31, 2025 and 2024, the Company had no outstanding litigation.

The Company has various ground leases for bitcoin mining in Oklahoma and Texas that expire on varying dates through 2034 and various equipment leases. For additional information see Note 24.

------

**Note 24. Leases**

*<u>Operating Leases</u>*

The Company entered into two lease agreements in Oklahoma and Texas for land during the year ended December 31, 2024. Both leases expire during 2034. Certain lease arrangements include renewal options and escalation clauses.

Future minimum lease payments included in the measurement of operating lease liabilities on the consolidated balance sheet as of December 31, 2025, were as follows:

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| | |
|:---|:---|
|  | **Operating Lease** |
| 2026 | 257660 |
| 2027 | 260160 |
| 2028 | 260160 |
| 2029 | 315160 |
| 2030 | 320160 |
| Thereafter | 998920 |
| Total minimum lease payments | $2412220 |
| Less: Imputed interest | (817208) |
| Present value of future minimum lease payments | $1595012 |
| Less: Current portion | (97463) |
| Lease liabilities, net of current portion | $1497549 |

---

Total operating lease expense was $285,919 and $254,179 for the years ended December 31, 2025 and 2024, respectively. Operating lease expense is recorded in general and administrative expenses in the Company's consolidated statements of operations. The weighted-average discount rate and remaining lease term in years as of December 31, 2025 was 10.32% and 8.13, respectively. Total amortization expense for the ROU asset was $109,532 and $93,171 for the years ended December 31, 2025 and 2024, respectively.

*<u>Finance Leases</u>*

The Company leases computer equipment under finance lease agreements with four related party entities. See Note 12 - Transactions with Related Parties for additional information. These leases were acquired through the TCM acquisition on April 1, 2025. The lease obligations mature on various dates from 2027 through 2030.

Future minimum lease payments included in the measurement of finance lease liabilities on the consolidated balance sheet as of December 31, 2025, were as follows:

---

| | |
|:---|:---|
|  | **Finance Lease** |
| 2026 | 2623627 |
| 2027 | 4035247 |
| 2028 | 874695 |
| 2029 | 753367 |
| 2030 | 290331 |
| Thereafter |  |
| Total minimum lease payments | $8577267 |
| Less: Imputed interest | (1752370) |
| Present value of future minimum lease payments | $6824897 |
| Less: Current portion | (1645069) |
| Lease liabilities, net of current portion | $5179828 |

---

------

The components of finance lease expense for the year ended December 31, 2025 are as follows. The Company did not incur any finance lease expenses for the year ended December 31, 2024.

---

| | |
|:---|:---|
|  | **For the Year Ended** <br> **December 31, 2025** |
| Finance lease cost: |  |
| Amortization of ROU assets | $1466963 |
| Interest on lease liabilities | 496736 |
| Total lease cost | $1963699 |

---

The weighted-average discount rate and remaining lease term in years as of December 31, 2025 was 16.21% and 3.09, respectively.

Supplemental cash flow information and non-cash activity related to leases are as follows:

---

| | | |
|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2025** | **2024** |
| Operating cash flows for operating leases | $(62032) | $(35371) |
| Amortization of right-of-use assets | $1576495 | $— |
| Financing cash flows from finance leases | $(2022552) | $— |
| Acquisition of right-of-use asset in exchange for lease obligations | $10829867 | $— |
| Supplemental non-cash amounts of lease liabilities arising from obtaining right-of-use assets | $11004375 | $1621672 |

---

**Note 25. Subsequent Events**

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to April 7, 2026, which is the date that the financial statements were issued.

On January 12, 2026, the Company entered into a Limited Liability Company Interest Purchase Agreement to sell its 40% interest in the T20 joint venture to a third party. The transaction closed on February 13, 2026 and the Company received approximately $16,500,000 for the sale.

On February 13, 2026, the Company made its first draw on its credit facility for approximately $4,282,000.

On March 9, 2026, the Company approved a private offering of the Company's common stock to investors, with aggregate proceeds of up to $100,000,000 at a purchase price of $23.15 per share. As of April 7, 2026, the Company has sold 2,160 shares of common stock for proceeds of $50,004.

On March 26, 2026, the Company entered into a securities purchase agreement (the "Securities Purchase Agreement") with a third party (the "Investor"), pursuant to which the Company agreed to issue and sell to the Investor senior secured convertible notes (the "Notes") in an aggregate principal amount of up to $45,000,000 (the "Facility").

The Facility consists of an initial tranche in the principal amount of $15,000,000, which was funded on March 26, 2026, and subsequent tranches in an aggregate principal amount of up to $30,000,000. The Notes bear interest at 7% per annum and the initial tranche matures on March 26, 2028. The Notes are convertible into shares of the Company's common stock at $11.50 per share.

------

**THE CLOUD MINDERS, INC**

**Balance Sheets**

&nbsp;&nbsp;&nbsp;&nbsp;**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **March 31, 2025** | **December 31, 2024** |
|  | **(Unaudited)** |  |
| **ASSETS** |  |  |
| **Current assets:** |  |  |
| Cash and cash equivalents | $2473036 | $371114 |
| Accrued revenues | 96029 | 64894 |
| Current portion of subscription receivable |  | 3226548 |
| Total current assets | 2569065 | 3662556 |
| Property and equipment, net | 7136180 | 1556917 |
| **Other assets:** |  |  |
| Internally developed software | 597444 | 473844 |
| Right of use assets - finance leases | 5612488 | 8244637 |
| Deferred tax asset | 541064 | 541064 |
| Total other assets | 6750996 | 9259545 |
| Total assets | $16456241 | $14479018 |
| **LIABILITIES AND STOCKHOLDERS' AND MEMBERS' EQUITY (DEFICIT)** |  |  |
| **Current liabilities:** |  |  |
| Current portion of finance lease obligations | 1907099 | 4068248 |
| Current portion of long-term debt | 1220344 | 78615 |
| Accounts payable | 47283 | 63679 |
| Accrued expenses | 86500 |  |
| Accrued interest payable | 449388 | 301237 |
| Convertible notes payable | 1716657 | 1716657 |
| Total current liabilities | 5427271 | 6228436 |
| Long-term liabilities: |  |  |
| Finance lease liabilities, net of current portion | 4068594 | 5425428 |
| Long-term debt, net of current portion | 5152690 | 26098 |
| Total long-term liabilities | 9221284 | 5451526 |
| **Stockholders' and Members' Equity** |  |  |
| Series A Preferred stock - $1.00 par value; 3,000,000 shares authorized, 1,577,185 and 1,283,343 shares issued and outstanding as of March 31, 2025 and December 31, 2024 | 1577085 | 1283343 |
| Common stock - no par value; 20,000,000 shares authorized, 17,472,764 shares issued and outstanding as of March 31, 2025; and 18,300,006 shares issued and outstanding as of December 31, 2024 |  |  |
| Additional paid-in capital | 5234456 | 5282259 |
| Subscription receivables |  | (70000) |
| Accumulated deficit | (5003855) | (3696546) |
| Total Stockholders' and Members' Equity | 1807686 | 2799056 |
| Total Liabilities and Stockholders' and Members' Equity | $16456241 | $14479018 |

---

------

**THE CLOUD MINDERS, INC**

**Statement of Net Loss**

&nbsp;&nbsp;&nbsp;&nbsp;**(Unaudited)**

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended March 31,** | **Three Months Ended March 31,** | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
|  | **2025** | **2025** | **2024** | **2024** |
|  | **Amount** | **% To Earned**<br> **Revenues** | **Amount** | **% To Earned**<br> **Revenues** |
| Revenues | $1312479 | 100.00 | $577596 | 100.00 |
| Operating expenses | 282569 | 21.53 | 383608 | 66.41 |
| Gross profit from operations | 1029910 | 78.47 | 193988 | 33.59 |
| General and administrative expenses | 1946832 | 148.33 | 640207 | 110.84 |
| Operating loss | (916922) | (69.86) | (446219) | (77.25) |
| Other expenses | (390387) | (29.74) | (122230) | (21.16) |
| Net loss | $(1307309) | (99.61) | $(568449) | (98.42) |

---

------

**THE CLOUD MINDERS, INC**

**Statement of Changes in Stockholders**' **and Members**' **Equity**

&nbsp;&nbsp;&nbsp;&nbsp;**(Unaudited)**

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred Stock** | **Preferred Stock** | **Common Stock** | **Common Stock** |  |  |  |  |  |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Additional**<br> **Paid-In**<br> **Capital**  | **Members'**<br> **Equity**<br> **(Deficit)** | **Subscription Receivables** | **Accumulated**<br> **Deficit** | **Total**<br> **Stockholders'**<br> **Equity (Deficit)** |
| **Balance at January 1, 2025** | **1283443** | **1283343** | **18300006** | $**—** | $**5282259** | $**—** | $**(70000)** | $**(3696546)** | $**2799056** |
| Issuance of preferred stock for common stock and capital redemption | 293742 | 293742 | (293742) |  | (293742) |  |  |  |  |
| Redemption of common stock |  |  | (533500) |  |  |  |  |  |  |
| Distributions |  |  |  |  | (70599) |  |  |  | (70599) |
| Subscription receivables repaid |  |  |  |  |  |  | 70000 |  | 70000 |
| Stock-based compensation |  |  |  |  | 316538 |  |  |  | 316538 |
| Net loss |  |  |  |  |  |  |  | (1307309) | (1307309) |
| **Balance at March 31, 2025** | **1577185** | $**1577085** | **17472764** | $**—** | $**5234456** | $**—** | $**—** | $**(5003855)** | $**1807686** |

---

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred Stock** | **Preferred Stock** | **Common Stock** | **Common Stock** |  |  |  |  |  |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Additional**<br> **Paid-In**<br> **Capital**  | **Members'**<br> **Equity**<br> **(Deficit)** | **Subscription**<br> **Receivables** | **Accumulated**<br> **Deficit** | **Total**<br> **Stockholders'**<br> **Equity (Deficit)** |
| **Balance at January 1, 2024** |  | **—** |  | **—** | **—** | $**4916700** | $**(4800000)** | $**(721504)** | $**(604804)** |
| Members' contributions, net |  |  |  |  |  | 206379 |  |  | 206379 |
| Net loss |  | **—** |  | **—** | **—** | **—** | **—** | (568449) | (568449) |
| **Balance at March 31, 2024** |  | $**—** |  | $**—** | $**—** | $**5123079** | $**(4800000)** | $**(1289953)** | $**(966874)** |

---

------

**THE CLOUD MINDERS, INC**

**Statement of Cash Flows**

&nbsp;&nbsp;&nbsp;&nbsp;**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **For the Three Months Ended March 31,** | **For the Three Months Ended March 31,** |
|  | **2025** | **2024** |
| **CASH FLOWS FROM OPERATING ACTIVITIES:** |  |  |
| Net loss | $(1307309) | $(568449) |
| Adjustments to reconcile net income to net cash used in operating activities: |  |  |
| Depreciation | 509201 | 46112 |
| Amortization of finance ROU assets | 487239 | 473619 |
| Interest expense under finance lease obligations | 162655 | 172961 |
| Stock based compensation | 316538 |  |
| (Increase) decrease in operating assets: |  |  |
| Accounts receivable |  | 96741 |
| Accrued revenues | (31135) | (58518) |
| (Increase) decrease in operating liabilities: |  |  |
| Accounts payable | (16396) | 21226 |
| Accrued expenses | 86500 | 10000 |
| Accrued interest payable forfeited |  | (53658) |
| Accrued interest payable | 148151 |  |
| Net cash provided by operating activities | 355444 | 140034 |
| **CASH FLOWS FROM INVESTING ACTIVITIES:** |  |  |
| Purchase of fixed assets | (362898) |  |
| Costs incurred on internally developed software | (123600) | (12851) |
| Net cash used in investing activities | (486498) | (12851) |
| **CASH FLOWS FROM FINANCING ACTIVITIES:** |  |  |
| Members' contributions |  | 48240 |
| Members' distributions | (70599) |  |
| Collection of subscription receivables | 3226548 |  |
| Repayments of long-term debt | (181679) |  |
| Repayments on finance lease obligations | (741294) | (73646) |
| Net cash provided by (used in) financing activities | 2232976 | (25406) |
| **Net increase in cash and cash equivalents** | 2101922 | 101777 |
| **Cash and cash equivalents at the beginning of the period** | 371114 | 98993 |
| **Cash and cash equivalents at the end of the period** | $2473036 | $200770 |

---

------

THE CLOUD MINDERS, INC

Notes to Financial Statements

**Note 1 - Summary of Significant Accounting Policies**

**Organization and Nature of Business**

The Cloud Minders, LLC ("the Company") was organized in the State of Delaware in 2021 as a limited liability company. On May 10, 2024, the Company was incorporated in the state of Delaware and changed its name to The Cloud Minders, Inc.

The Company provides GPU (Graphics Processing Unit) cloud hosting services to organizations that require high-performance computing resources. Its platform delivers GPU-accelerated compute power for artificial intelligence (AI), machine learning (ML), data analytics, scientific simulations, rendering, and other compute-intensive workloads.

The Company offers access to its services through a proprietary cloud interface, supporting both virtualized and bare-metal GPU infrastructure. Customers may provision GPU instances on an on-demand basis or via reserved capacity agreements. The Company serves enterprise clients, research institutions, media production firms, and independent developers. For financial and income tax reporting purposes, the Company has adopted the calendar year.

**Adoption of New Accounting Standards**

In November 2024, the FASB issued ASU 2024-04, Debt - Debt with Conversion and Other Options (Topic 470). This guidance clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The ASU is effective on a prospective basis, with the option for retrospective application, for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities that have adopted the amendments in ASU 2020-06. The Company is currently evaluating the impact of ASU 2024-04 on its condensed financial statements and related disclosures.

**Use of Estimates**

The presentation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management's estimates and assumptions include, but are not limited to, productive lives of finance right of use assets, collectability of accounts receivable, and salvage values and estimated useful lives of property and equipment. Management's estimates and assumptions are derived from and are continually evaluated based upon available information, judgment, and experience.

**Cash and Cash Equivalents**

For purposes of the statements of cash flows, the Company considers cash in operating bank accounts, demand deposits, cash on hand, and highly liquid debt instruments purchased with an original maturity of three months or less as cash and cash equivalents.

------

THE CLOUD MINDERS, INC

Notes to Financial Statements

**Accounts Receivable**

Accounts receivable are stated at the amount management expects to collect from balances outstanding at year-end. Accounts receivable are due 30 days after issuance of the invoice. Accounts receivable past due more than 90 days are considered delinquent. An allowance for credit losses is provided when necessary and is based upon management's evaluation of outstanding accounts receivable at year-end, historical collection information, and existing economic conditions. The Company considers all accounts receivable to be collectible; accordingly, no allowance for credit losses is recorded. If amounts become uncollectible, they will be charged to operations when that determination is made.

**Property and Equipment**

Property and equipment are recorded at cost. Expenditures for additions, improvements, betterments, if material, and individual purchases over $2,500 are generally capitalized. Minor replacements, maintenance, and repairs that do not improve or extend the lives of the assets are charged to expense as incurred. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period.

Management reviews the carrying value of property and equipment for impairment whenever events and circumstances indicate that the carrying value of property and equipment may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of property and equipment. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property and equipment is used, and the effects of obsolescence, demand, competition, and other economic factors. During the year ended December 31, 2024, the company acquired equipment in the amount of $140,000, which was financed with the issuance of convertible notes payable. Management reviewed the carrying value of the equipment for impairment and determined that the estimated cash flows resulting from the equipment was exceeded by its carrying value. As such, management recorded an impairment loss on fixed assets in the amount of $40,238 during the year ended December 31, 2024.

Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes. The Company uses other depreciation methods, generally, Modified Accelerated Cost Recovery System (MACRS), for income tax purposes. These differences in depreciation methods result in deferred income and related deferred taxes.

**Internally Developed Software**

The Company capitalizes certain costs related to the development of internal-use software in accordance with FASB Accounting Standards Codification (ASC) 350-40, Internal-Use Software. Costs incurred during the preliminary project stage and post-implementation stages are expensed as incurred. Costs incurred during the application development stage, including external direct costs of materials and services and payroll costs for employees directly associated with the project, are capitalized.

Capitalized software development costs that are not yet ready for their intended use are included in Other Assets on the balance sheets. These costs are not amortized until the software is substantially complete and ready for its intended use. As of March 31, 2025 and December 31, 2024, the Company had capitalized $597,444 and $473,844, respectively, related to internal-use software development projects that were still in progress.

**Revenue and Cost Recognition**

The Company recognizes revenue in accordance with ASC, Topic 606, Revenue from Contracts with Customers.

------

THE CLOUD MINDERS, INC

Notes to Financial Statements

Revenue is generated from contracts with customers. Revenue is recognized when control of the promised services is transferred to the customer in the amount that reflects the consideration the Company expects to be entitled to receive in exchange for those services.

Revenue recognition is determined through the application of the following steps:

● Identification of the contract, or contracts, with a customer;

● Identification of the performance obligations in the contract;

● Determination of the transaction price;

● Allocation of the transaction price to the performance obligations in the contract;

● Recognition of revenue when, or as, the Company satisfies a performance obligation.

This guidance only applies the five-step model to arrangements that meet the definition of a contract under Topic 606, including the consideration of whether it is probable the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations; the assessment includes the evaluation of whether each promised good or service is distinct within the context of the contract. Under Topic 606, the Company recognizes revenue separately for performance obligations that are distinct. Performance obligations are considered to be distinct if (a) the customer can benefit from the goods or services either on its own or together with other resources that are readily available to the customer, and (b) the promise to transfer the goods or services is separately identifiable from other promises in the contract. If a good or service is not individually distinct, the Company combines the goods or services with other promised goods or services until the Company identifies a bundle of goods or services that together are distinct.

The Company identifies the following performance obligations:

● Compute Usage Services

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Revenue is recognized over time as compute resources are consumed by customers on a usage-based (hourly) or subscription basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o For usage-based services, revenue is recognized in the period in which the service is provided, based on actual consumption.

● Enterprise and Support Services

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Revenue from professional support, onboarding, or consulting is recognized over the period in which the services are delivered.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o If services are billed on a fixed-fee basis, revenue is recognized over the performance period using a time-based measure of progress.

The Company does not typically incur significant contract acquisition costs. In limited cases, such costs are capitalized and amortized over the expected contract term, if material.

For the three months ended March 31, 2025 and 2024, revenue derived from compute usage services amounted to $1,312,479 and $577,596, respectively.

------

THE CLOUD MINDERS, INC

Notes to Financial Statements

**Leases**

At lease inception, the Company determines whether an arrangement is or contains a lease. At the lease commencement date, leases are classified as either operating leases or finance leases.

In the accompanying financial statements, finance leases are reported as "Right of use assets - finance leases" and related liabilities are reported as current portion of finance lease obligations and long-term finance lease obligations. Finance ROU assets are amortized over the lower of their lease terms or their estimated productive lives.

ROU assets represent the Company's right to use the underlying leased assets over the term of the lease and the related lease liabilities represent the Company's contractual obligation to make lease payments over the lease term. At the lease commencement date, the capitalized value of the ROU asset and corresponding value of lease obligation are determined based on the present value of the lease payments over the lease term. For finance ROU assets and corresponding lease obligations, the Company uses the interest rate implicit in the lease. Lease terms may include renewal or extension options to the extent they are reasonably certain to be exercised. The assessment of whether renewal or extension options are reasonably certain to be exercised is made at lease commencement. Factors considered in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of leased assets, the value of renewal rates compared to market rates, and the presence of factors that would cause a significant economic penalty to the Company if the option were not exercised.

To the extent a lease arrangement includes both lease and non-lease components, the Company has elected to account for the components as a single lease component.

The Company has elected not to recognize a ROU asset and obligation for leases with an initial term of twelve months or less (short-term leases). The expense associated with short-term leases is recognized on a straight-line basis over the lease term and is included in general and administrative expenses in the accompanying statements of income (loss).

After lease commencement, the finance lease liability is measured on an amortized cost basis and increased to reflect interest on the liability and decreased to reflect the lease payment made during the period. Interest on the lease liability is determined each period during the lease term as the amount that results in a constant period discount rate on the remaining balance of the liability. The ROU asset is subsequently measured at its original capitalized value, less any accumulated amortization and any accumulated impairment losses. Amortization on the ROU asset is recognized over the period from the commencement date to the earlier of the end of the useful life of the ROU asset or the end of the lease term.

**Subscription Receivables**

The Company accounts for receivables obtained for issuance of its equity ("subscription receivables") in accordance with ASC 505-10, Equity – Overall. Pursuant to this standard, subscription receivables are presented as a reduction of stockholders' and members' equity in the balance sheets. The standard also provides an exception for circumstances in which there is substantial evidence for collections within a reasonably short period of time, in which case, the subscription receivables may be reported as an asset.

**Convertible Debt**

The Company may issue debt instruments that are convertible into equity securities of the Company, either mandatorily or at the option of the holder. The Company accounts for convertible debt instruments in accordance with FASB ASC 470-20, Debt - Debt with Conversion and Other Options. Convertible debt instruments that may be settled in cash or shares at the option of the holder or issuer are assessed to determine whether they contain embedded features that require bifurcation and separate accounting under ASC 815, Derivatives and Hedging. Pursuant to ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40), embedded conversion features are not separated from convertible debt unless they are required to be accounted for as derivatives under ASC 815.

------

THE CLOUD MINDERS, INC

Notes to Financial Statements

**Income Taxes**

The Cloud Minders, Inc. has adopted the "accrual" method of accounting for income tax reporting purposes. Accelerated depreciation is used for tax reporting and straight-line depreciation is used for financial statement reporting. As a result, significant deferred income in the form of temporary differences exist between income reported on income tax returns and the income reported on the financial statements as well as the tax bases of assets and liabilities and their reported amount in the financial statements. Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates applicable to the period in which deferred tax assets and liabilities are expected to be realized or settled as prescribed in FASB ASC 740, Accounting for Income Taxes. As changes in the tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. Deferred taxes are classified as non-current.

For the period January 1, 2024 through May 9, 2024, the Company was taxed as a Partnership. Consequently, as a result of its pass through tax status, for those periods the Company's taxable income or loss was allocated to members in accordance with their respective ownership and no income tax provision (benefit) and liability (asset) for taxable income (loss) or deferred income (loss) were recorded in the accompanying financial statements.

As of May 10, 2024, the Company changed its tax status and elected to be taxed as a "C" Corporation (a tax paying entity). As a result of the Company's change in tax status, the Company will file partnership tax return for the period January 1, 2024 through May 9, 2024 and a "C" corporation tax return for the period May 10, 2024 through December 31, 2024. The deferred tax assets as of March 31, 2025, shown in the balance sheets amounts to $541,064. The Company had no provision (benefit) for income taxes for the three months ended March 31, 2025.

Business tax credits, if any, are accounted for by the flow-through method which recognizes the credits as reductions to current provision for federal income taxes in the year utilized.

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and taxing strategies in making this assessment.

**Uncertain Tax Positions**

FASB ASC 740, Income Taxes, prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return as well as guidance on de-recognition, classification, interest and penalties, and financial statement reporting disclosures. For those benefits to be recognized, a tax position must be more likely-than-not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. The Company has considered its income tax positions, including any positions that may be considered uncertain by the relevant tax authorities in the jurisdictions in which the Company operates. As of March 31, 2025 and 2024, the Company has not identified any uncertain tax positions or unrecognized tax benefits.

------

THE CLOUD MINDERS, INC

Notes to Financial Statements

Since tax matters are subject to some degree of uncertainty, there can be no assurance that the Company's tax return will not be challenged by the taxing authorities and that the Company will not be subject to additional tax, penalties, and interest as a result of such challenge. The Company's policy is to recognize interest and penalties that would be assessed in relation to the settlement value of unrecognized tax benefits as a component of income tax expense. No interest or penalties have been incurred for the years ended December 31, 2024 and 2023. Generally, the Company's tax return remain open for federal and state income tax examinations for three years after they are filed.

**Advertising Costs**

Advertising costs, except for the costs associated with direct-response advertising, if any, are charged to operations when incurred. The costs of direct-response advertising are capitalized and amortized over the period during which future benefits are expected to be received. Advertising expense for the three months ended March 31, 2025 and 2024 was $2,427 and $17,386, respectively.

**Note 2 - Fair Value of Financial Instruments**

The fair values of financial instruments including cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and other current assets and liabilities approximate the carrying values, principally because of the short maturity of those items. The fair values of notes and finance leases payable approximate the carrying values, principally because of the current terms applicable to each item.

**Note 3 - Property and Equipment**

The major classifications of property and equipment, including their estimated useful lives, are summarized as follows at the balance sheet dates:

---

| | | | |
|:---|:---|:---|:---|
|  | **Estimated Useful Life** | **March 31, 2025** | **December 31, 2024** |
| Office equipment | 3 years | $10000 | $10000 |
| Machinery and equipment | 3 years | 8262052 | 2173591 |
|  |  | 8272052 | 2183591 |
| Less: Accumulated depreciation | Less: Accumulated depreciation | (1135872) | (626674) |
|  |  | $7136180 | $1556917 |

---

For the three months ended March 31, 2025 and 2024, depreciation expense relating to property and equipment amounted to $509,201 and $46,112, respectively, and is included in operating expenses in the accompanying statements of loss.

**Note 4 - Leases**

The Company leases computer equipment under finance lease agreements with four related party entities. The leases started on various dates between November 2023 through March 2025. See Note 5 - Transactions With Related Parties for additional information. All leases have terms of 60 months with automatic month-to-month extensions at $1.00 per month until the equipment purchase option is exercised, which can take place after the fifth anniversary of the first full month that the equipment generates profits. The Company has agreed to accelerate rental payments due to the lessor whereby the Company is required to make additional variable lease payments in amounts based on the Company's usage of the underlying assets. Pursuant to ASU 2016-02, Leases (Topic 842), future lease obligations do not contain variable lease payments that are linked to performance. The leases require minimum monthly payments ranging from $18,598 to $54,939. Amortization of finance ROU assets is included in operating expenses in the accompanying statements of income (loss). In addition, the Company leases its administrative offices under a month-to-month lease.

------

THE CLOUD MINDERS, INC

Notes to Financial Statements

The components of lease expense for the three months ended March 31, are as follows:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Finance lease cost: |  |  |
| Amortization of ROU assets | 487239 | 473619 |
| Interest on lease liabilities | 162655 | 172961 |
| Short-term lease cost | 12698 | 10249 |
| Total lease cost | $662592 | $656829 |

---

Supplemental finance lease information is as follows:

---

| | | |
|:---|:---|:---|
|  | **March 31, 2025** | **December 31, 2024** |
| Weighted average remaining lease term | 4.42 years | 4.44 years |
| Weighted average discount rate | 9.00% | 9.00% |

---

At March 31, 2025, future minimum payments for finance leases are payable as follows:

---

| | |
|:---|:---|
| **March 31,** | **2025** |
| 2026 | $1907099 |
| 2027 | 1846979 |
| 2028 | 1742019 |
| 2029 | 1075660 |
| 2030 | 549389 |
| Total | 7121146 |
| Less: Interest | (1145453) |
| Total lease liability | $5975693 |

---

**Note 5 - Transactions With Related Parties**

As of and for the three months ended March 31, 2025 and 2024 and for the year ended December 31, 2024, the Company had the following related party transactions:

● As of December 31, 2023, the Company had a loan payable to its founding member with an outstanding balance amounting to $859,923 and accrued interest payable totaling $53,658. During the year ended December 31, 2024, $495,582 of the loan was repaid, the remaining unpaid balance, in the amount of $364,341, was converted to equity, and the accrued interest was forfeited.

● During 2024, the Company entered into a non-interest bearing note payable with two related parties in which a preferred stockholder holds a capital interest. The original principal amount of the note was $104,713. The note payable requires monthly payments of $8,735 starting in April 2025.

------

THE CLOUD MINDERS, INC

Notes to Financial Statements

● The Company is party to finance lease agreements with four entities in which a preferred stockholder holds a capital interest. Additional details related to these lease agreements are provided in Note 4 - Leases.

● During the three months ended March 31, 2025 and 2024, the Company paid $14,500 and $75,253, respectively, to certain of its members for consulting services.

● During the three months ended March 31, 2025, the Company paid $10,502 to certain stockholders in guarantee fees in connection with obtaining a new $6,450,000 loan from a commercial bank.

● During the three months ended March 31, 2025, the Company recognized $270,251 in revenue from one of its lessors, in which a preferred stockholder holds a capital interest. No such related party revenue was recognized during the three months ended March 31, 2024.

**Note 6 - Convertible Notes Payable**

During 2024, the Company issued convertible promissory notes to various investors with an aggregate principal amount of $3,000,000. The convertible notes were issued between May 10, 2024 and June 11, 2024, bear interest at 35% per annum, compounded annually, and mature on December 1, 2025, unless earlier converted or repaid.

On July 1, 2024, $1,283,343 of principal balance was converted to Series A Preferred Stock at a conversion price of $1.00 per share. As of March 31, 2025 and December 31, 2024, the aggregate outstanding balance of the convertible promissory notes amounted to $1,716,657 with related accrued interest payable of $449,388 and $301,237, respectively.

Under the terms of the notes:

● There are no scheduled payments due.

● The outstanding principal is automatically convertible into equity securities on or before the calendar day immediately preceding the maturity date, at the conversion price of $1.00 per share.

● All accrued interest outstanding in respect to the outstanding principal upon conversion shall be deemed forgiven.

● The Company may make partial prepayment(s), provided however the principal portion of such prepayment(s) do not exceed two-thirds of the original principal amount, unless expressly approved by the holder of the note.

● The notes are unsecured and subordinate to senior debt, if any.

The notes contain embedded and redemption features subject to bifurcation and separate accounting as derivative liabilities under FASB ASC 815, Derivatives and Hedging. In accordance with ASC 815, the Company evaluated the terms of the notes and determined that the financial impact derived from the embedded and redemption features was immaterial to the Company's financial position and results of operations. As such, no separate liability resulting from bifurcation has been recorded.

------

THE CLOUD MINDERS, INC

Notes to Financial Statements

**Note 7 - Long-Term Debt**

Long-term debt at March 31, 2025, consisted of the following:

---

| | |
|:---|:---|
| Note payable to related party, in monthly installments of $8,735, 0% interest, unsecured | $104713 |
| Note payable to commercial bank, in monthly installments of $129,525, at prime subject to a 5% floor, secured by financed equipment, maturing January 2030 | 6268321 |
| Less: Current maturities | (1220344) |
| Long-term debt, net of current maturities | $5152690 |

---

Maturities of long-term debt are as follows:

---

| | |
|:---|:---|
| **March 31,** |  |
| 2026 | $1220344.0 |
| 2027 | 1203518.0 |
| 2028 | 1297718.0 |
| 2029 | 1400486.0 |
| 2030 | 1250968.0 |
|  | $6373034.0 |

---

**Note 8 - Subscription Receivables**

In November 2023, the Company obtained receivables totaling $4,900,000 as contributions to its equity (collectively referred to as "subscription receivables"). The subscription receivables consisted of a $1,000,000 non-interest bearing loan receivable, to be repaid in 12 equal installments commencing in January 2024, and a $3,900,000 note receivable, with interest at 0.10%, and maturing in November 2025. No scheduled payments are due under the note receivable, and, upon maturity, any unpaid principal automatically converts to shares of common stock of the issuer at a conversion price of $1.00 per share. As of December 31, 2024, $4,800,000 of these subscription amounts remained unpaid. During the three months ended March 31, 2025, the Company collected $3,226,548 in cash proceeds as repayment for the subscription receivables.

**Note 9 - Equity Conversion**

On May 10, 2024, the Company completed a legal conversion from a partnership to a C corporation. Prior to the conversion, the Company operated as a partnership, with capital accounts maintained for each member. Pursuant to the conversion, the total number of shares of capital stock the Company is authorized to issue is 23,000,000, consisting of 20,000,000 shares of common stock with no par value and 3,000,000 shares of nonvoting preferred stock with a par value of $1.00. As of December 31, 2024, there were 18,300,006 shares of common stock and 1,283,343 shares of preferred stock issued and outstanding, respectively. The Company has designated the authorized shares of preferred stock as Series A Preferred stock. As part of the conversion, all membership interests were exchanged for shares of common stock of the newly formed corporation at an exchange rate of $93.33 per member's interest.

The conversion was accounted for as a reorganization of the capital structure with no change in the carrying value of the net assets. Accordingly, the historical basis of the Company's assets and liabilities was retained, and the partnership capital accounts were reclassified to common stock and additional paid-in capital in accordance with the terms of the conversion.

At the effective date of the conversion:

● 18,300,006 shares of voting common stock with no par value were issued to the former members in exchange for their membership interests.

------

THE CLOUD MINDERS, INC

Notes to Financial Statements

● The equity section of the balance sheet as of March 31, 2025 and December 31, 2024 reflects the corporate form, with members' capital eliminated and replaced with common stock and additional paid-in capital.

This transaction qualified as a tax-free exchange under Internal Revenue Code Section 351.

**Note 10 - Stock Options**

TCM sponsors stock-based compensation plans known as The Cloud Minders Inc. 2025 Option Plan (the "Plan"). The number of shares of common stock authorized for issuance under the Plan is 1,699,994, subject to adjustment as provided in the Plan.

The Plans allow the Company to grant incentive stock options and non-qualified stock options. The persons eligible to receive awards are the employees, consultants and directors of the Company and its affiliates. Incentive stock options may be granted to employees of the Company. Awards other than incentive stock options may be granted to employees, consultants and directors. The option vesting schedule for options granted is determined at the time of the grant. The Plans provide for accelerated vesting of unvested options in the event of a change in control.

Below is a summary of stock option activity during the three months ended March 31, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Number**<br> **of**<br> **Options** | **Weighted**<br> **Average**<br> **Exercise**<br> **price ($)** | **Weighted**<br> **Average**<br> **Grant-**<br> **Date Fair**<br> **Value ($)** | **Weighted**<br> **Average**<br> **Remaining**<br> **Contractual** <br> **Life (in**<br> **Years)** |
| Options outstanding as of December 31, 2024 |  |  |  |  |
| Granted | 2130175 | $0.40 | $0.79 |  |
| Exercised |  |  |  |  |
| Canceled |  |  |  |  |
| Options outstanding as of March 31, 2025 | 2130175 | $0.40 | $0.79 | $8.49 |
| Options exercisable as of March 31, 2025 | 527916 | $0.90 | $0.60 | $5.63 |

---

For the three months ended March 31, 2025, the total fair value of the options granted amounted to $1,678,233. The Black-Scholes model utilized the following inputs to value the options granted during the three months ended March 31, 2025:

---

| | |
|:---|:---|
| Option Valuation Assumptions: |  |
| Risk-free interest rate | 4.09% - 4.49 |
| Expected term (years) | 5 yrs - 9.71 yrs |
| Exercise price | $0.23 - $1.00 |
| Expected volatility | 59.96% - 61.81 |
| Expected dividend yield | 0 |

---

------

THE CLOUD MINDERS, INC

Notes to Financial Statements

The Company recognized $316,538 in equity-based compensation recorded in general and administrative expenses during the three months ended March 31, 2025, in connection with issued stock options. As of March 31, 2025, non-vested outstanding options totaled 1,602,259 and the Company expects to recognize $1,361,695 of equity-based compensation for the non-vested options over the remaining weighted average contractual period of 9.43 years.

**Note 11 - Other Income (Expenses)**

Other income and expenses for the three months ended March 31, consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
|  | **2025** | **2024** |
| Other Income |  |  |
| Interest income | $1080 | $53659 |
| Miscellaneous income | 903 | 2070 |
|  | 1983 | 55729 |
| Other Expenses |  |  |
| Interest expense | 388230 | 172961 |
| Charitable contributions | 4140 | 4998 |
|  | 392370 | 177959 |
| Total other expenses, net | $(390387) | $(122230) |

---

**Note 12 - Supplemental Disclosure of Cash Flow Information**

**Cash Paid (Received) for Interest and Income Taxes**

Cash paid (received) for interest and income taxes for the three months ended March 31, consisted of the following:

---

| | | |
|:---|:---|:---|
|  | 2025 | 2024 |
| Interest (net) | $185705 | $115699 |
| Income taxes | $— | $— |

---

**Non-Cash Financing and Investing Activities**

The Company had the following non-cash financing and investing transactions for the three months ended March 31:

---

| | | |
|:---|:---|:---|
|  | 2025 | 2024 |
| Non-cash purchase of leased assets | $5655566 | $— |
| Right of use assets obtained in exchange for new finance lease liabilities | $2484216 | $— |
| Issuance of preferred stock for common stock and capital redemption | $293742 | $— |
| Capital issued in exchange for repayment on loan payable - member | $— | $158139 |
| Leased assets purchased in exchange for curtailment of subscription receivable | $70000 | $— |

---

------

THE CLOUD MINDERS, INC

Notes to Financial Statements

**Note 13 - Concentrations**

**Credit Risk**

Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash and accounts receivable.

The Company maintains its cash balances in various financial institutions. At times, such balances may be in excess of the Federal Deposit Insurance Corporation (FDIC) insurance limit. As of March 31, 2025 and December 31, 2024, interest-bearing accounts and non-interest bearing demand deposit accounts were insured by the FDIC up to $250,000 per financial institution. At March 31, 2025 and December 31, 2024, the Company's bank balances were fully insured by the FDIC.

**Concentrations of Customers**

For the three months ended March 31, 2025, 81% and 18% of the Company's revenues was attributed to two customers, respectively. For the three months ended March 31, 2024, 93% of the Company's revenue was attributed to one customer.

**Note 14 - Going Concern Considerations**

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

The Company provides GPU cloud hosting services to organizations that require high-performance computing infrastructure for artificial intelligence, machine learning, data analytics, and other compute-intensive applications. As of March 31, 2025, the Company had an accumulated deficit of $5,003,855 and incurred a net loss of $1,307,309 for the three months ended March 31, 2025. These factors initially raised substantial doubt about the Company's ability to continue as a going concern within one year after the date these financial statements are issued.

Management identified the following primary risks contributing to this uncertainty:

● Dependence on continued access to specialized GPU hardware, which is subject to supply constraints;

● Exposure to competition from larger cloud infrastructure providers with greater scale;

● Customer concentration risk from reliance on a small number of enterprise clients;

● Capital-intensive operations requiring sustained investment in data center infrastructure;

● Cybersecurity and compliance risk associated with hosting sensitive customer workloads.

In response to these risks, management developed and began executing a plan intended to mitigate the conditions giving rise to substantial doubt about the Company's ability to continue as a going concern, including the following:

● Refinance and/or restructure the amount of finance lease obligations coming due within one year from the date these financial statements are available to be issued. See Note 15 for additional information on subsequent event transactions.

● Exploring strategic partnerships to enhance market reach and capacity utilization. See Note 15 for additional information on subsequent event transactions.

● Accelerate the timing for collection of the Company's subscription receivables. See Note 15 for additional information on subsequent event transactions.

As a result of these actions, management has concluded that the substantial doubt about the Company's ability to continue as a going concern within one year after the date the financial statements are issued has been alleviated. Accordingly, the financial statements have been prepared on a going concern basis, and no adjustments have been made to the carrying amounts or classification of assets and liabilities that might result from the outcome of this uncertainty.

------

THE CLOUD MINDERS, INC

Notes to Financial Statements

**Note 15 - Subsequent events**

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. On April 1, 2025 (the "Effective Date"), the Company entered into Contribution and Exchange Agreements, as amended (together, the "Acquisition Agreement"), with shareholders of QumulusAI, Inc. ("QumulusAI"), pursuant to which each TCM shareholder contributed all outstanding equity securities in the Company to QumulusAI in exchange for equity securities of QumulusAI. As a result, TCM became a wholly owned subsidiary of QumulusAI (the "Acquisition"). The Acquisition formally closed on the Effective Date.

------

THE CLOUD MINDERS, INC

Notes to Financial Statements

------

![image01.jpg](image01.jpg)

**INDEPENDENT AUDITOR**'**S REPORT**

**To the Board of Directors and Management**

**The Cloud Minders, Inc.**

**Opinion**

We have audited the accompanying financial statements of The Cloud Minders, Inc. (a Delaware corporation), which comprise the balance sheets as of December 31, 2024 and 2023, and the related statements of income (loss), changes in stockholders' and members' equity, and cash flows for the years then ended, and the related notes to the financial statements.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The Cloud Minders, Inc. as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

**Basis for Opinion**

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

**Emphasis of Matter**

As discussed in Note 14 to the financial statements, the Company has suffered losses from operations and has a net working capital deficiency. Management's evaluation of the events and conditions and management's plans to mitigate those matters are also described in Note 14. Our opinion is not modified with respect to that matter.

**Responsibilities of Management for the Financial Statements**

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

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

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

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

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

● Exercise professional judgment and maintain professional skepticism throughout the audit.

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

------

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

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

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

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

/s/ BPS & Associates, LLC

July 3, 2025

------

**THE CLOUD MINDERS, INC.**

**BALANCE SHEETS**

**DECEMBER 31, 2024 AND 2023**

---

| | | |
|:---|:---|:---|
| **ASSETS** | **2024** | **2023** |
| **Current Assets** |  |  |
| Cash and cash equivalents | $371114 | $98993 |
| Accounts receivable |  | 96250 |
| Accrued revenues | 64894 | 6376 |
| Current portion of subscription receivables | 3226548 |  |
| **Total Current Assets** | 3662556 | 201619 |
| **Property and Equipment, Net** | 1556917 | 385912 |
| **Other Assets** |  |  |
| Internally developed software | 473844 |  |
| Right of use assets - finance leases | 8244637 | 7424018 |
| Deferred tax asset | 541064 |  |
| **Total Other Assets** | 9259545 | 7424018 |
| **Total Assets** | $14479018 | $8011549 |

---

*See Independent Auditor*'*s Report.*

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

------

**THE CLOUD MINDERS, INC.**

**BALANCE SHEETS** 

**DECEMBER 31, 2024 AND 2023**

---

| | | |
|:---|:---|:---|
| **LIABILITIES AND STOCKHOLDERS**' **AND MEMBERS**' **EQUITY** | **2024** | **2023** |
| **Current Liabilities** |  |  |
| Current portion of finance lease obligations | $4068248 | $1721243 |
| Current portion of long-term debt | 78615 |  |
| Accounts payable | 63679 | 63931 |
| Accrued interest payable | 301237 | 53658 |
| Convertible notes payable | 1716657 |  |
| Loan payable - member |  | 859923 |
| **Total Current Liabilities** | 6228436 | 2698755 |
| **Long-Term Liabilities** |  |  |
| Finance lease obligations, net of current portion | 5425428 | 5917598 |
| Long-term debt, net of current portion | 26098 |  |
| **Total Long-Term Liabilities** | 5451526 | 5917598 |
| **Stockholders**' **and Members**' **Equity** |  |  |
| Series A Preferred stock - $1.00 par value; 3,000,000 shares authorized, 1,283,343 shares issued and outstanding as of December 31, 2024; and no shares authorized, issued and outstanding as of December 31, 2023 | 1283343 |  |
| Common stock - no par value; 20,000,000 shares authorized, 18,300,006 shares issued and outstanding as of December 31, 2024; and no shares authorized, issued and outstanding as of December 31, 2023 |  |  |
| Additional paid-in capital | 5282259 |  |
| Members' equity (deficit) |  | 4916700 |
| Subscription receivables | (70000) | (4800000) |
| Retained earnings (deficit) | (3696546) | (721504) |
| **Total Stockholders**' **and Members**' **Equity** | 2799056 | (604804) |
| **Total Liabilities and Stockholders**' **and Members**' **Equity** | $14479018 | $8011549 |

---

------

**THE CLOUD MINDERS, INC.**

**STATEMENTS OF INCOME (LOSS)**

**FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2024** | **2024** | **2023** | **2023** |
|  | **Amount** | <br> **% To** <br> **Earned** <br> **Revenues** | **Amount** | **% To** <br> **Earned** <br> **Revenues** |
| Revenues | $2682805 | 100.0 | $1062906 | 100.0 |
| Operating expenses | 3486147 | 129.9 | 536210 | 50.4 |
| Gross profit (loss) from operations | (803342) | (29.9) | 526696 | 49.6 |
| General and administrative expenses | 1704772 | 63.6 | 254258 | 23.9 |
| Operating profit (loss) | (2508114) | (93.5) | 272438 | 25.7 |
| Other income (expenses) | (1007992) | (37.6) | (81642) | (7.7) |
| Income (loss) before income taxes | (3516106) | (131.1) | 190796 | 18.0 |
| Provision (benefit) for income taxes | (541064) | (20.2) |  |  |
| Net income (loss) | $(2975042) | (110.9) | $190796 | 18.0 |

---

*See Independent Auditor*'*s Report.*

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

------

**THE CLOUD MINDERS, INC.**

**STATEMENTS OF CHANGES IN STOCKHOLDERS**' **AND MEMBERS**' **EQUITY FOR** 

**THE YEARS ENDED DECEMBER 31, 2024 AND 2023**

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred Stock** | **Preferred Stock** | **Common Stock** | **Common Stock** | **Additional** <br> **Paid-In** | **Members'** <br> **Equity** | **Subscription** | **Retained** <br> **Earnings** |  |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Capital** | **(Deficit)** | **Receivables** | **(Deficit)** | **Total** |
| **Beginning balance at January 1, 2023** |  | $- |  | $- | $- | $7200 | $- | $(912300) | $(905100) |
| Net income (loss) |  |  |  |  |  |  |  | 190796 | 190796 |
| Members' contributions, net |  |  |  |  |  | 4909500 |  |  | 4909500 |
| Subscription receivables issued |  |  |  |  |  |  | (4900000) |  | (4900000) |
| Subscription receivables repaid |  |  |  |  |  |  | 100000 |  | 100000 |
| **Ending balance at December 31, 2023** |  | $- |  | $- | $- | $4916700 | $(4800000) | $(721504) | $(604804) |
| Net income (loss) |  |  |  |  |  |  |  | (2975042) | (2975042) |
| Members' contributions, net |  |  |  |  |  | 365559 |  |  | 365559 |
| Members' equity converted to common stock |  |  |  |  | 5282259 | (5282259) |  |  |  |
| Subscription receivables repaid |  |  |  |  |  |  | 1503452 |  | 1503452 |
| Subscription receivables transferred to assets |  |  |  |  |  |  | 3226548 |  | 3226548 |
| Common stock issued |  |  | 18300006 |  |  |  |  |  |  |
| Preferred stock issued | 1283443 | 1283343 |  |  |  |  |  |  | 1283343 |
| **Ending balance at December 31, 2024** | **1283443** | $**1283343** | **18300006** | $**-** | $**5282259** | $**-** | $**(70000)** | $**(3696546)** | $**2799056** |

---

*See Independent Auditor*'*s Report.*

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

------

**THE CLOUD MINDERS, INC.**

**STATEMENTS OF CASH FLOWS**

**FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023**

---

| | | |
|:---|:---|:---|
|  | **2024** | **2023**  |
| **Cash Flows From Operating Activities:** |  |  |
| Net income (loss) | $(2975042) | $190796 |
| Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
| Depreciation | 472411 | 101991 |
| Amortization of finance ROU assets | 2093938 | 157958 |
| Impairment of fixed assets | 40238 |  |
| Decrease in deferred income taxes | (541064) |  |
| Loss on disposal of fixed assets |  | 9494 |
| Interest expense under finance lease obligations | 745129 | 56865 |
| (Increase) decrease in operating assets: |  |  |
| Accounts receivable | 96250 | (95114) |
| Accrued revenues | (58518) | (6376) |
| Increase (decrease) in operating liabilities: Accounts payable | (252) | 63931 |
| Accrued interest payable | 247579 | 25961 |
| **Net Cash Provided (Used) by Operating Activities** | $120669 | $505506 |

---

*See Independent Auditor*'*s Report.*

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

------

**THE CLOUD MINDERS, INC.**

**STATEMENTS OF CASH FLOWS**

**FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023**

---

| | | |
|:---|:---|:---|
|  | **2024** | **2023**  |
| **Net Cash Provided (Used) by Operating Activities** | $120669 | $505506 |
| **Cash Flows from Investing Activities:** |  |  |
| Purchase of fixed assets | (1543654) | (384262) |
| Costs incurred on internally developed software | (473844) |  |
| Loan receivable - other |  | 3900 |
| Collection of loan receivable | 385000 |  |
| **Net Cash Provided (Used) by Investing Activities** | (1632498) | (380362) |
| **Cash Flows from Financing Activities:** |  |  |
| Members' contributions | 1218 | 9500 |
| Collection of subscription receivables | 1310430 | 100000 |
| Advances on long-term debt | 104713 |  |
| Advances on convertible notes payable | 2475000 |  |
| Repayments on finance lease obligations | (1611829) |  |
| Repayments of loan to member | (495582) | (156537) |
| **Net Cash Provided (Used) by Financing Activities** | 1783950 | (47037) |
| Net increase (decrease) in cash and cash equivalents | 272121 | 78107 |
| Cash and cash equivalents at the beginning of year | 98993 | 20886 |
| Cash and cash equivalents at the end of year | $371114 | $98993 |

---

*See Independent Auditor*'*s Report.*

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

------

**THE CLOUD MINDERS, INC.**

**NOTES TO FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023**

**Note 1 - Summary of Significant Accounting Policies**

**Organization and Nature of Business**

The Cloud Minders, LLC ("the Company") was organized in the State of Delaware in 2021 as a limited liability company. On May 10, 2024, the Company was incorporated in the state of Delaware and changed its name to The Cloud Minders, Inc.

The Company provides GPU (Graphics Processing Unit) cloud hosting services to organizations that require high-performance computing resources. Its platform delivers GPU-accelerated compute power for artificial intelligence (AI), machine learning (ML), data analytics, scientific simulations, rendering, and other compute-intensive workloads.

The Company offers access to its services through a proprietary cloud interface, supporting both virtualized and bare-metal GPU infrastructure. Customers may provision GPU instances on an on-demand basis or via reserved capacity agreements. The Company serves enterprise clients, research institutions, media production firms, and independent developers. For financial and income tax reporting purposes, the Company has adopted the calendar year.

**Adoption of New Accounting Standards**

In accordance with Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Statements, the Company adopted Topic 326 effective January 1, 2023 using the modified retrospective method. Topic 326 introduces a new model for recognizing credit losses on financial assets based on expected credit losses. There was no significant impact upon the adoption of Topic 326 to the Company's financial statements.

**Use of Estimates**

The presentation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management's estimates and assumptions include, but are not limited to, productive lives of finance right of use assets, collectability of accounts receivable, and salvage values and estimated useful lives of property and equipment. Management's estimates and assumptions are derived from and are continually evaluated based upon available information, judgment, and experience.

**Cash and Cash Equivalents**

For purposes of the statements of cash flows, the Company considers cash in operating bank accounts, demand deposits, cash on hand, and highly liquid debt instruments purchased with an original maturity of three months or less as cash and cash equivalents.

*See Independent Auditor*'*s Report.*

------

**THE CLOUD MINDERS, INC.**

**NOTES TO FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023**

**Note 1 - Summary of Significant Accounting Policies (Continued)**

**Accounts Receivable**

Accounts receivable are stated at the amount management expects to collect from balances outstanding at year-end. Accounts receivable are due 30 days after issuance of the invoice. Accounts receivable past due more than 90 days are considered delinquent. An allowance for credit losses is provided when necessary and is based upon management's evaluation of outstanding accounts receivable at year-end, historical collection information, and existing economic conditions. The Company considers all accounts receivable to be collectible; accordingly, no allowance for credit losses is recorded. If amounts become uncollectible, they will be charged to operations when that determination is made.

**Property and Equipment**

Property and equipment are recorded at cost. Expenditures for additions, improvements, betterments, if material, and individual purchases over $2,500 are generally capitalized. Minor replacements, maintenance, and repairs that do not improve or extend the lives of the assets are charged to expense as incurred. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period.

Management reviews the carrying value of property and equipment for impairment whenever events and circumstances indicate that the carrying value of property and equipment may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of property and equipment. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property and equipment is used, and the effects of obsolescence, demand, competition, and other economic factors. During 2024, the company acquired equipment in the amount of $140,000, which was financed with the issuance of convertible notes payable. Management reviewed the carrying value of the equipment for impairment and determined that the estimated cash flows resulting from the equipment was exceeded by its carrying value. As such, management recorded an impairment loss on fixed assets in the amount of $40,238 during the year ended December 31, 2024.

Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes. The Company uses other depreciation methods, generally, Modified Accelerated Cost Recovery System (MACRS), for income tax purposes. These differences in depreciation methods result in deferred income and related deferred taxes.

*See Independent Auditor*'*s Report.*

------

**THE CLOUD MINDERS, INC.**

**NOTES TO FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023**

**Note 1 - Summary of Significant Accounting Policies (Continued)**

**Internally Developed Software**

The Company capitalizes certain costs related to the development of internal-use software in accordance with FASB Accounting Standards Codification (ASC) 350-40, Internal-Use Software. Costs incurred during the preliminary project stage and post-implementation stages are expensed as incurred. Costs incurred during the application development stage, including external direct costs of materials and services and payroll costs for employees directly associated with the project, are capitalized.

Capitalized software development costs that are not yet ready for their intended use are included in Other Assets on the balance sheets. These costs are not amortized until the software is substantially complete and ready for its intended use. As of December 31, 2024 and 2023, the Company had capitalized $473,844 and $0, respectively, related to internal-use software development projects that were still in progress.

**Revenue and Cost Recognition**

The Company recognizes revenue in accordance with ASC, Topic 606, Revenue from Contracts with Customers.

Revenue is generated from contracts with customers. Revenue is recognized when control of the promised services is transferred to the customer in the amount that reflects the consideration the Company expects to be entitled to receive in exchange for those services.

Revenue recognition is determined through the application of the following steps:

● Identification of the contract, or contracts, with a customer;

● Identification of the performance obligations in the contract;

● Determination of the transaction price;

● Allocation of the transaction price to the performance obligations in the contract;

● Recognition of revenue when, or as, the Company satisfies a performance obligation.

This guidance only applies the five-step model to arrangements that meet the definition of a contract under Topic 606, including the consideration of whether it is probable the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations; the assessment includes the evaluation of whether each promised good or service is distinct within the context of the contract. Under Topic 606, the Company recognizes revenue separately for performance obligations that are distinct. Performance obligations are considered to be distinct if (a) the customer can benefit from the goods or services either on its own or together with other resources that are readily available to the customer, and (b) the promise to transfer the goods or services is separately identifiable from other promises in the contract. If a good or service is not individually distinct, the Company combines the goods or services with other promised goods or services until the Company identifies a bundle of goods or services that together are distinct.

*See Independent Auditor*'*s Report.*

------

**THE CLOUD MINDERS, INC.**

**NOTES TO FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023**

**Note 1 - Summary of Significant Accounting Policies (Continued)**

**Revenue and Cost Recognition (Continued)**

The Company identifies the following performance obligations:

● **Compute Usage Services** 

○ Revenue is recognized over time as compute resources are consumed by customers on a usage-based (hourly) or subscription basis.

○ For usage-based services, revenue is recognized in the period in which the service is provided, based on actual consumption.

● **Enterprise and Support Services** 

○ Revenue from professional support, onboarding, or consulting is recognized over the period in which the services are delivered.

○ If services are billed on a fixed-fee basis, revenue is recognized over the performance period using a time-based measure of progress.

The Company does not typically incur significant contract acquisition costs. In limited cases, such costs are capitalized and amortized over the expected contract term, if material.

For the year ended December 31, 2024, revenue derived from compute usage services and from enterprise support services amounted to $2,408,634 and $274,171, respectively. For the year ended December 31, 2023, substantially all of the Company's revenue was derived from enterprise and support services.

*See Independent Auditor*'*s Report.*

------

**THE CLOUD MINDERS, INC.**

**NOTES TO FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023**

**Note 1 - Summary of Significant Accounting Policies (Continued)**

**Leases**

At lease inception, the Company determines whether an arrangement is or contains a lease. At the lease commencement date, leases are classified as either operating leases or finance leases.

In the accompanying financial statements, finance leases are reported as "Right of use assets - finance leases" and related liabilities are reported as current portion of finance lease obligations and long-term finance lease obligations. Finance ROU assets are amortized over the lower of their lease terms or their estimated productive lives.

ROU assets represent the Company's right to use the underlying leased assets over the term of the lease and the related lease liabilities represent the Company's contractual obligation to make lease payments over the lease term. At the lease commencement date, the capitalized value of the ROU asset and corresponding value of lease obligation are determined based on the present value of the lease payments over the lease term. For finance ROU assets and corresponding lease obligations, the Company uses the interest rate implicit in the lease. Lease terms may include renewal or extension options to the extent they are reasonably certain to be exercised. The assessment of whether renewal or extension options are reasonably certain to be exercised is made at lease commencement. Factors considered in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of leased assets, the value of renewal rates compared to market rates, and the presence of factors that would cause a significant economic penalty to the Company if the option were not exercised.

To the extent a lease arrangement includes both lease and non-lease components, the Company has elected to account for the components as a single lease component.

The Company has elected not to recognize a ROU asset and obligation for leases with an initial term of twelve months or less (short-term leases). The expense associated with short-term leases is recognized on a straight-line basis over the lease term and is included in general and administrative expenses in the accompanying statements of income (loss).

After lease commencement, the finance lease liability is measured on an amortized cost basis and increased to reflect interest on the liability and decreased to reflect the lease payment made during the period. Interest on the lease liability is determined each period during the lease term as the amount that results in a constant period discount rate on the remaining balance of the liability. The ROU asset is subsequently measured at its original capitalized value, less any accumulated amortization and any accumulated impairment losses. Amortization on the ROU asset is recognized over the period from the commencement date to the earlier of the end of the useful life of the ROU asset or the end of the lease term.

*See Independent Auditor*'*s Report.*

------

**THE CLOUD MINDERS, INC.**

**NOTES TO FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023**

**Note 1 - Summary of Significant Accounting Policies (Continued)**

**Subscription Receivables**

The Company accounts for receivables obtained for issuance of its equity ("subscription receivables") in accordance with ASC 505-10, Equity – Overall. Pursuant to this standard, subscription receivables are presented as a reduction of stockholders' and members' equity in the balance sheets. The standard also provides an exception for circumstances in which there is substantial evidence for collections within a reasonably short period of time, in which case, the subscription receivables may be reported as an asset.

**Convertible Debt**

The Company may issue debt instruments that are convertible into equity securities of the Company, either mandatorily or at the option of the holder. The Company accounts for convertible debt instruments in accordance with FASB ASC 470-20, Debt - Debt with Conversion and Other Options. Convertible debt instruments that may be settled in cash or shares at the option of the holder or issuer are assessed to determine whether they contain embedded features that require bifurcation and separate accounting under ASC 815, Derivatives and Hedging. Pursuant to ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40), embedded conversion features are not separated from convertible debt unless they are required to be accounted for as derivatives under ASC 815.

**Income Taxes**

The Cloud Minders, Inc. has adopted the "accrual" method of accounting for income tax reporting purposes. Accelerated depreciation is used for tax reporting and straight-line depreciation is used for financial statement reporting. As a result, significant deferred income in the form of temporary differences exist between income reported on income tax returns and the income reported on the financial statements as well as the tax bases of assets and liabilities and their reported amount in the financial statements. Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates applicable to the period in which deferred tax assets and liabilities are expected to be realized or settled as prescribed in FASB ASC 740, Accounting for Income Taxes. As changes in the tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. Deferred taxes are classified as non-current.

For the year ended December 31, 2023 and for the period January 1, 2024 through May 9, 2024, the Company was taxed as a Partnership. Consequently, as a result of its pass through tax status, for those periods the Company's taxable income or loss was allocated to members in accordance with their respective ownership and no income tax provision (benefit) and liability (asset) for taxable income (loss) or deferred income (loss) were recorded in the accompanying financial statements.

*See Independent Auditor*'*s Report.*

------

**THE CLOUD MINDERS, INC.**

**NOTES TO FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023**

**Note 1 - Summary of Significant Accounting Policies (Continued)**

**Income Taxes (Continued)**

As of May 10, 2024, the Company changed its tax status and elected to be taxed as a "C" Corporation (a tax paying entity). As a result of the Company's change in tax status, the Company will file partnership tax return for the period January 1, 2024 through May 9, 2024 and a "C" corporation tax return for the period May 10, 2024 through December 31, 2024. The deferred tax assets as of December 31, 2024, shown in the balance sheets amounts to $541,064. Income tax benefit in the amount of $541,064, shown in the statements of income (loss), consists of the recognition of deferred tax assets arising from May 10, 2024, through December 31, 2024, which is the period in which the Company was taxed as a "C" corporation.

Business tax credits, if any, are accounted for by the flow-through method which recognizes the credits as reductions to current provision for federal income taxes in the year utilized.

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and taxing strategies in making this assessment.

**Uncertain Tax Positions**

FASB ASC 740, Income Taxes, prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return as well as guidance on de-recognition, classification, interest and penalties, and financial statement reporting disclosures. For those benefits to be recognized, a tax position must be more likely-than-not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. The Company has considered its income tax positions, including any positions that may be considered uncertain by the relevant tax authorities in the jurisdictions in which the Company operates. As of December 31, 2024 and 2023, the Company has not identified any uncertain tax positions or unrecognized tax benefits.

Since tax matters are subject to some degree of uncertainty, there can be no assurance that the Company's tax return will not be challenged by the taxing authorities and that the Company will not be subject to additional tax, penalties, and interest as a result of such challenge. The Company's policy is to recognize interest and penalties that would be assessed in relation to the settlement value of unrecognized tax benefits as a component of income tax expense. No interest or penalties have been incurred for the years ended December 31, 2024 and 2023. Generally, the Company's tax return remain open for federal and state income tax examinations for three years after they are filed.

*See Independent Auditor*'*s Report.*

------

**THE CLOUD MINDERS, INC.**

**NOTES TO FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023**

**Note 1 - Summary of Significant Accounting Policies (Continued)**

**Advertising Costs**

Advertising costs, except for the costs associated with direct-response advertising, if any, are charged to operations when incurred. The costs of direct-response advertising are capitalized and amortized over the period during which future benefits are expected to be received. Advertising expense for the years ended December 31, 2024 and 2023 was $131,970 and $0, respectively.

**Note 2 - Fair Value of Financial Instruments**

The fair values of financial instruments including cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and other current assets and liabilities approximate the carrying values, principally because of the short maturity of those items. The fair values of notes and finance leases payable approximate the carrying values, principally because of the current terms applicable to each item.

**Note 3 - Property and Equipment**

The major classifications of property and equipment, including their estimated useful lives, are summarized as follows at the balance sheet dates:

---

| | | | |
|:---|:---|:---|:---|
|  | **Estimated** <br> **Useful Life** | **2024** | **2023** |
| Office equipment | 3 years | $10000 | $10000 |
| Machinery and equipment | 3 years | 2173591 | 543367 |
|  |  | 2183591 | 553367 |
| Less: Accumulated depreciation | Less: Accumulated depreciation | (626674) | (167455) |
|  |  | $1556917 | $385912 |

---

For the years ended December 31, 2024 and 2023, depreciation expense relating to property and equipment amounted to $472,411 and $101,991, respectively, and is included in operating expenses in the accompanying statements of income (loss).

*See Independent Auditor*'*s Report.*

------

**THE CLOUD MINDERS, INC.**

**NOTES TO FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023**

**Note 4 - Leases**

The Company leases computer equipment under finance lease agreements with four related party entities. The leases started on various dates between November 2023 through December 2024. See Note 5 - Transactions With Related Parties for additional information. All leases have terms of 48 months with automatic month-to-month extensions at $1.00 per month until the equipment purchase option is exercised, which can take place after the fifth anniversary of the first full month that the equipment generates profits. The Company has agreed to accelerate rental payments due to the lessor whereby the Company is required to make additional variable lease payments in amounts based on the Company's usage of the underlying assets. Pursuant to ASU 2016-02, Leases (Topic 842), future lease obligations do not contain variable lease payments that are linked to performance. The leases require minimum monthly payments ranging from $18,598 to $164,241. Amortization of finance ROU assets is included in operating expenses in the accompanying statements of income (loss). In addition, the Company leases its administrative offices under a month-to-month lease.

The components of lease expense for the years ended December 31, are as follows:

---

| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
| Finance lease cost: |  |  |
| Amortization of ROU assets | $2093938 | $157958 |
| Interest on lease liabilities | 745129 | 56865 |
| Short-term lease cost | 58196 | 52443 |
| Total lease cost | $2897263 | $267266 |

---

Supplemental finance lease information as of December 31, is as follows:

---

| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
| Weighted average remaining lease term | 4.44 years | 4.92 years |
| Weighted average discount rate | 9.00% | 9.00% |

---

*See Independent Auditor*'*s Report.*

------

**THE CLOUD MINDERS, INC.**

**NOTES TO FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023**

**Note 4 - Leases (Continued)**

At December 31, 2024, future minimum payments for finance leases are payable as follows:

---

| | | |
|:---|:---|:---|
| **December 31,** | **2024** | **2023** |
| 2025 and 2024, respectively | $4068248 | $1721243 |
| 2026 and 2025, respectively | 3158610 | 3040791 |
| 2027 and 2026, respectively | 2968130 | 2285776 |
| 2028 and 2027, respectively | 634613 | 2095296 |
| 2029 and 2028, respectively |  | 11 |
| Total | 10829601 | 9143117 |
| Less: Interest | (1335925) | (1504276) |
| Total lease liability | $9493676 | $7638841 |

---

**Note 5 - Transactions With Related Parties**

As of and for the years ended December 31, 2024 and 2023, the Company had the following related party transactions:

● As of December 31, 2023, the Company had a loan payable to its founding member with an outstanding balance amounting to $859,923 and accrued interest payable totaling $53,658. During the year ended December 31, 2024, $495,582 of the loan was repaid, the remaining unpaid balance, in the amount of $364,341, was converted to equity, and the accrued interest was forfeited.

● During 2024, the Company entered into a non-interest bearing note payable with two related parties in which a preferred stockholder holds a capital interest. The original principal amount of the note was $104,713. The note payable requires monthly payments of $8,735 starting in April 2025.

● The Company is party to finance lease agreements with four entities in which a preferred stockholder holds a capital interest. Additional details related to these lease agreements are provided in Note 4 - Leases.

● During the years ended December 31, 2024 and 2023, the Company paid $189,441 and $69,370, respectively, to certain of its members for consulting services.

*See Independent Auditor*'*s Report.*

------

**THE CLOUD MINDERS, INC.**

**NOTES TO FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023**

**Note 6 - Convertible Notes Payable**

During 2024, the Company issued convertible promissory notes to various investors with an aggregate principal amount of $3,000,000. The convertible notes were issued between May 10, 2024 and June 11, 2024, bear interest at 35% per annum, compounded annually, and mature on December 1, 2025, unless earlier converted or repaid.

On July 1, 2024, $1,283,343 of principal balance was converted to Series A Preferred Stock at a conversion price of $1.00 per share, and as of December 31, 2024, the aggregate outstanding balance of the convertible promissory notes amounted to $1,716,657 with related accrued interest payable of $301,237.

Under the terms of the notes:

● There are no scheduled payments due.

● The outstanding principal is automatically convertible into equity securities on or before the calendar day immediately preceding the maturity date, at the conversion price of $1.00 per share.

● All accrued interest outstanding in respect to the outstanding principal upon conversion shall be deemed forgiven.

● The Company may make partial prepayment(s), provided however the principal portion of such prepayment(s) do not exceed two-thirds of the original principal amount, unless expressly approved by the holder of the note.

● The notes are unsecured and subordinate to senior debt, if any.

The notes contain embedded and redemption features subject to bifurcation and separate accounting as derivative liabilities under FASB ASC 815, Derivatives and Hedging. In accordance with ASC 815, the Company evaluated the terms of the notes and determined that the financial impact derived from the embedded and redemption features was immaterial to the Company's financial position and results of operations. As such, no separate liability resulting from bifurcation has been recorded.

*See Independent Auditor*'*s Report.*

------

**THE CLOUD MINDERS, INC.**

**NOTES TO FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023**

**Note 7 - Long-Term Debt**

Long-term debt at December 31, 2024, consisted of the following:

---

| | |
|:---|:---|
| Note payable in monthly installments totaling $8,735, unsecured | $104713 |
| Less: Current maturities | (78615) |
| Long-term debt, net of current maturities | $26098 |

---

Maturities of long-term debt are as follows:

---

| | |
|:---|:---|
| <u>**December 31,**</u> |  |
| 2025 | $78615.0 |
| 2026 | 26098.0 |
|  | $104713.0 |

---

As of December 31, 2023, the Company had no long-term debt outstanding.

**Note 8 - Subscription Receivables**

In November 2023, the Company obtained receivables totaling $4,900,000 as contributions to its equity (collectively referred to as "subscription receivables"). The subscription receivables consisted of a $1,000,000 non-interest bearing loan receivable, to be repaid in 12 equal installments commencing in January 2024, and a $3,900,000 note receivable, with interest at 0.10%, and maturing in November 2025. No scheduled payments are due under the note receivable, and, upon maturity, any unpaid principal automatically converts to shares of common stock of the issuer at a conversion price of $1.00 per share. As of December 31, 2024 and 2023, $4,800,000 and $3,296,548 of these subscription amounts, respectively, remained unpaid. Subsequent to December 31, 2024, the Company collected $3,226,548 in cash proceeds as repayment for the subscription receivables, and therefore, in connection with FASB ASC 505, this amount is recorded as a current asset as of December 31, 2024. The remaining uncollected portion, or $70,000, is classified as a deduction from stockholders' and members' equity. As of December 31, 2023, $4,800,000 is presented as a deduction from stockholders' and members' equity.

*See Independent Auditor*'*s Report.*

------

**THE CLOUD MINDERS, INC.**

**NOTES TO FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023**

**Note 9 - Equity Conversion**

On May 10, 2024, the Company completed a legal conversion from a partnership to a C corporation. Prior to the conversion, the Company operated as a partnership, with capital accounts maintained for each member. Pursuant to the conversion, the total number of shares of capital stock the Company is authorized to issue is 23,000,000, consisting of 20,000,000 shares of common stock with no par value and 3,000,000 shares of nonvoting preferred stock with a par value of $1.00. As of December 31, 2024, there were 18,300,006 shares of common stock and 1,283,343 shares of preferred stock issued and outstanding, respectively. The Company has designated the authorized shares of preferred stock as Series A Preferred stock. As part of the conversion, all membership interests were exchanged for shares of common stock of the newly formed corporation at an exchange rate of $93.33 per member's interest.

The conversion was accounted for as a reorganization of the capital structure with no change in the carrying value of the net assets. Accordingly, the historical basis of the Company's assets and liabilities was retained, and the partnership capital accounts were reclassified to common stock and additional paid-in capital in accordance with the terms of the conversion.

At the effective date of the conversion:

● 18,300,006 shares of voting common stock with no par value were issued to the former members in exchange for their membership interests.

● The equity section of the balance sheet as of December 31, 2024 reflects the corporate form, with members' capital eliminated and replaced with common stock and additional paid-in capital.

This transaction qualified as a tax-free exchange under Internal Revenue Code Section 351.

*See Independent Auditor*'*s Report.*

------

**THE CLOUD MINDERS, INC.**

**NOTES TO FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023**

**Note 10 - Income Taxes**

Provision has been made on the accompanying financial statements for deferred income taxes applicable to the timing differences between financial statement income and tax basis income (Note 1). The deferred taxes will not become payable until such time that the timing differences reverse themselves and the tax basis income equals or exceeds the GAAP basis financial statement income.

The significant components of the Company's deferred tax assets and liabilities as of December 31, 2024, were as follows:

---

| | |
|:---|:---|
| Deferred tax assets: |  |
| Temporary differences | $334008 |
| State decoupling adjustments | 39165 |
| Cumulative net operating loss carryforwards | 375456 |
| Total deferred tax assets | 748629 |
| Deferred tax liabilities: |  |
| Depreciation | (207565) |
| Total deferred tax liabilities | (207565) |
| Net deferred tax assets (liabilities) | $541064 |

---

*See Independent Auditor*'*s Report.*

------

**THE CLOUD MINDERS, INC.**

**NOTES TO FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023**

**Note 10 - Income Taxes (Continued)**

As of December 31, 2024, the Company had $1,787,889 and $1,398,481 of federal and state net operating losses (NOLs), respectively, that may be available to offset future taxable income. Under the Tax Cuts and Jobs Act, NOLs are carried forward indefinitely, but may be limited in utilization to 80% of taxable income of the immediate preceding year.

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and taxing strategies in making this assessment. As of December 31, 2024, a valuation allowance was not considered necessary.

The provision (benefit) for federal and state income taxes during the year ended December 31, 2024, for the period the Company was taxed as a "C" Corp, is as follows:

---

| | |
|:---|:---|
| Current payable (refundable) | $- |
| Deferred provision (benefit) | (541064) |
| Income tax expense (benefit) | $(541064) |

---

**Note 11 - Other Income (Expenses)**

Other income and expenses for the years ended December 31, consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
| Other Income |  |  |
| Interest income | $21961 | $- |
| Miscellaneous income | 61650 | 20829 |
|  | 83611 | 20829 |
| Other Expenses |  |  |
| Interest expense | 1046367 | 82827 |
| Impairment of fixed assets | 40238 |  |
| Loss on disposal of fixed assets |  | 9494 |
| Charitable contributions | 4998 | 10150 |
|  | 1091603 | 102471 |
|  | $(1007992) | $(81642) |

---

*See Independent Auditor*'*s Report.*

------

**THE CLOUD MINDERS, INC.**

**NOTES TO FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023**

**Note 12 - Supplemental Disclosure of Cash Flow Information**

**Cash Paid (Received) for Interest and Income Taxes**

Cash paid (received) for interest and income taxes for the years ended December 31, consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
| Interest (net) | $1024406 | $82827 |
| Income taxes | $- | $- |

---

**Non-Cash Financing and Investing Activities**

The Company had the following non-cash financing and investing transactions for the years ended December 31:

---

| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
| Equipment purchase with issuance of convertible notes payable | $140000 | $- |
| Members' equity converted to common stock and additional paid-in capital | $5282259 | $- |
| Right of use assets obtained in exchange for new finance lease liabilities | $2914557 | $7581976 |
| Notes payable converted to preferred stock | $1283343 | $- |
| Capital issued in exchange for repayment on loan payable - member | $364341 | $- |
| Equity acquired with subscription receivables | $- | $4900000 |
| Loan receivable obtained in exchange for issuance of convertible notes payable | $385000 | $- |
| Finance lease obligation curtailment in exchange for repayment on subscription receivables | $193022 | $- |

---

*See Independent Auditor*'*s Report.*

------

**THE CLOUD MINDERS, INC.**

**NOTES TO FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023**

**Note 13 - Concentrations**

**Credit Risk**

Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash and accounts receivable.

The Company maintains its cash balances in various financial institutions. At times, such balances may be in excess of the Federal Deposit Insurance Corporation (FDIC) insurance limit. As of December 31, 2024 and 2023, interest-bearing accounts and non-interest bearing demand deposit accounts were insured by the FDIC up to $250,000 per financial institution. At December 31, 2024 and 2023, the Company's bank balances were fully insured by the FDIC.

**Concentrations of Customers**

For the year ended December 31, 2024, 95% of the Company's revenues was attributed to one customer. There were no concentrations of revenues from a single customer for the year ended December 31, 2023.

**Note 14 - Going Concern Considerations**

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

The Company provides GPU cloud hosting services to organizations that require high-performance computing infrastructure for artificial intelligence, machine learning, data analytics, and other compute-intensive applications. As of December 31, 2024, the Company had an accumulated deficit of $849 thousand and incurred a net loss of $2.975 million. These factors initially raised substantial doubt about the Company's ability to continue as a going concern within one year after the date these financial statements are issued.

Management identified the following primary risks contributing to this uncertainty:

● Dependence on continued access to specialized GPU hardware, which is subject to supply constraints;

● Exposure to competition from larger cloud infrastructure providers with greater scale;

● Customer concentration risk from reliance on a small number of enterprise clients;

● Capital-intensive operations requiring sustained investment in data center infrastructure;

● Cybersecurity and compliance risk associated with hosting sensitive customer workloads.

*See Independent Auditor*'*s Report.*

------

**THE CLOUD MINDERS, INC.**

**NOTES TO FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023**

**Note 14 - Going Concern Considerations (Continued)**

In response to these risks, management developed and began executing a plan intended to mitigate the conditions giving rise to substantial doubt about the Company's ability to continue as a going concern, including the following:

● Refinance and/or restructure the amount of finance lease obligations coming due within one year from the date these financial statements are available to be issued. See Note 15 for additional information on subsequent event transactions.

● Exploring strategic partnerships to enhance market reach and capacity utilization. See Note 15 for additional information on subsequent event transactions.

● Accelerate the timing for collection of the Company's subscription receivables. See Note 15 for additional information on subsequent event transactions.

As a result of these actions, management has concluded that the substantial doubt about the Company's ability to continue as a going concern within one year after the date the financial statements are issued has been alleviated. Accordingly, the financial statements have been prepared on a going concern basis, and no adjustments have been made to the carrying amounts or classification of assets and liabilities that might result from the outcome of this uncertainty.

**Note 15 - Subsequent events**

Subsequent to December 31, 2024, the Company collected $3,226,548 in cash proceeds towards repayment of its subscription receivables, which had a balance outstanding totaling $3,296,546 as of December 31, 2024, leaving $70,000 as the remaining unpaid portion.

In April 2025, the Company entered into a finance lease agreement for additional computer equipment. The lease has a term of 60 months and requires minimum monthly rental payments of $58,435. In connection with the purchase, the Company recorded a finance ROU asset and corresponding lease obligation in the amount of $2,340,797. As of lease effective date, the current portion of the finance lease obligations amounted to $642,780.

In January 2025 the Company, prior to termination of its largest finance lease, purchased the equipment leased under the agreement for a purchase price of $6,454,466. The carrying value of the purchased finance ROU assets and corresponding finance liability amounted to $4,629,126 and $5,423,543, respectively. The Company financed the equipment purchase with a loan payable to a commercial bank in the amount of $6,450,000 at prime, subject to a 5% floor. The loan calls for principal and interest payments totaling $129,552 beginning in March 2025, and matures in January, 2030. As a result of this transaction, the Company's current portion of finance lease obligations was reduced. As of the date of purchase, the current portion of the purchased finance lease obligation amounting to $2.485 million was replaced with the current portion of the loan payable to a commercial bank totaling $1.123 million.

*See Independent Auditor*'*s Report.*

------

**THE CLOUD MINDERS, INC.**

**NOTES TO FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023**

**Note 15 - Subsequent events (Continued)**

In March 2025, the Company entered into a severance agreement with its founding member. The agreement calls for a lump sum severance payment in the amount of $100,000, conversion of the founding member's outstanding capital balance, amounting to $296,742 as of the severance agreement date, to 293,712 shares of Series A Preferred stock. The agreement also calls for the issuance of a short-term $5,000 promissory note payable by the founding member to the Company.

In March 2025, the Company's Board of Directors and stockholders approved the decision to enter into a contribution and exchange agreement with its largest common stockholder, Global Digital Holdings, Inc. (GDH). Effective April 1, 2025, the Company's stockholders entered into a contribution and exchange agreement (the "Agreement") with GDH, in which all their outstanding equity securities and ownership rights in The Cloud Minders, LLC equity were contributed to GDH in exchange for shares and ownership rights in GDH. Pursuant to the agreement, each share of The Cloud Minders, LLC stock and equity instrument was converted to 0.9216278851273 shares of GDH.

The Company evaluates events or transactions that occur subsequent to year end for potential recognition or disclosure in the financial statements through the date on which the financial statements are available to be issued. Subsequent events have been evaluated as of July 03, 2025, which is the date the financial statements were available to be issued.

*See Independent Auditor*'*s Report.*

------

**QUMULUSAI, INC.**

------

**PROSPECTUS**

------

**<u> </u> Shares of Common Stock**

**, 2026**

Through and including , 2026, 25 days after the date of this prospectus, all dealers that effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus.

------

**PART II** — **INFORMATION NOT REQUIRED IN PROSPECTUS**

**Item 13. Other Expenses of Issuance and Distribution**

The following table sets forth all expenses, other than the underwriting discounts and commissions, payable by the registrant in connection with the sale of our common stock being registered. All the amounts shown are estimates except the SEC registration fee and the listing fee for the Nasdaq Global Market.

---

| | |
|:---|:---|
|  | **Amount to be** <br> **paid** |
| SEC registration fee | $48335 |
| Nasdaq listing fee | 25000 |
| Accounting fees and expenses | 95000 |
| Legal fees and expenses | 400000 |
| Miscellaneous |  |
| Total | 568335 |

---

**Item 14. Indemnification of Directors and Officers**

***Georgia Business Corporation Code***

Subsection (a) of Section 14-2-851 of the Georgia Business Corporation Code (the "GBCC") provides that a corporation may indemnify or obligate itself to indemnify an individual made a party to a proceeding because he or she is or was a director against liability incurred in the proceeding if such individual conducted himself or herself in good faith and such individual reasonably believed, in the case of conduct in an official capacity, that such conduct was in the best interests of the corporation and, in all other cases, that such conduct was at least not opposed to the best interests of the corporation and, in the case of any criminal proceeding, such individual had no reasonable cause to believe such conduct was unlawful. Subsection (d) of Section 14-2-851 of the GBCC provides that a corporation may not indemnify a director in connection with a proceeding by or in the right of the corporation except for reasonable expenses incurred if it is determined that the director has met the relevant standard of conduct, or in connection with any proceeding with respect to conduct under Section 14-2-851 of the GBCC for which he was adjudged liable on the basis that personal benefit was improperly received by him or her, whether or not involving action in his or her official capacity.

Section 14-2-852 of the GBCC provides that to the extent that a director has been wholly successful, on the merits or otherwise, in the defense of any proceeding to which he was a party, because he or she is or was a director of the corporation, the corporation shall indemnify the director against reasonable expenses incurred by the director in connection with the proceeding.

Pursuant to Section 14-2-854 of the GBCC, a court may order a corporation to indemnify a director or advance expenses if such court determines that the director is entitled to indemnification under the GBCC or that the director is fairly and reasonably entitled to indemnification or advance of expenses in view of all the relevant circumstances, whether or not such director met the standard of conduct set forth in subsections (a) and (b) of Section 14-2-851 of the GBCC, failed to comply with Section 14-2-853 of the GBCC or was adjudged liable as described in paragraph (1) or (2) of subsection (d) of Section 14-2-851 of the GBCC.

Section 14-2-856 of the GBCC permits our articles of incorporation, bylaws, a contract, or resolution approved by the shareholders, to authorize us to indemnify a director against claims to which the director was a party, including claims by us or in our right (e.g., shareholder derivative action). However, we may not indemnify the director for liability to us for any appropriation of a corporate opportunity, intentional misconduct or knowing violation of the law, unlawful distributions or receipt of an improper benefit.

Section 14-2-857 of the GBCC provides that a corporation may indemnify and advance expenses to an officer of the corporation who is a party to a proceeding because he or she is an officer of the corporation to the same extent as a director and if he or she is not a director to such further extent as may be provided in its articles of incorporation, bylaws, resolution of its board of directors or contract except for liability arising out of conduct specified in Section 14-2-857(a)(2) of the GBCC. Section 14-2-857 of the GBCC also provides that an officer of the corporation who is not a director is entitled to mandatory indemnification under Section 14-2-852 and is entitled to apply for court ordered indemnification or advances for expenses under Section 14-2-854, in each case to the same extent as a director. In addition, Section 14-2-857 provides that a corporation may also indemnify and advance expenses to an employee or agent who is not a director to the extent, consistent with public policy, that may be provided by its articles of incorporation, bylaws, action of its board of directors or contract.

------

Section 14-2-858 of the GBCC permits us to purchase and maintain insurance on behalf of our directors and officers against liability incurred by them in their capacities or arising out of their status as our directors and officers, regardless of whether we would have the power to indemnify or advance expenses to the director or officer for the same liability under the GBCC.

***Charter***

The Company's Charter provides that, to the full extent that the GBCC permits the limitation or elimination of the liability of directors, a director of the Company shall not be liable to the Company or its shareholders for monetary damages for conduct as a director.

***Bylaws***

The Company's Bylaws provide that any person, their heirs, executors, or administrators, may be indemnified or reimbursed by the Company to the fullest extent of the GBCC for reasonable expenses actually incurred in connection with any action, suit or proceeding, civil or criminal, to which such person shall be made a party by reason of the fact that such person is or was a director, trustee, officer, employee, or agent of the Company, or that such person is or was serving, at the request of the Company, as a director, trustee, officer, employee, or agent of any other enterprise.

***Indemnification Agreements***

We intend to enter into separate indemnification agreements with our directors and certain officers. Each indemnification agreement will provide, among other things, for indemnification to the fullest extent permitted by law and our Bylaws against any and all expenses, judgments, fines, penalties and amounts paid in settlement of any claim. The indemnification agreements will provide for the advancement or payment of all expenses to the indemnitee and for the reimbursement to us if it is found that such indemnitee is not entitled to such indemnification under applicable law, our Charter or our Bylaws.

***Insurance Policies***

We currently maintain a private D&O insurance policy and intend to purchase a public D&O insurance policy in connection with the direct listing that will insure our directors and officers against certain liabilities incurred by them in the discharge of their functions as directors and officers.

The foregoing description of the GBCC, our Charter and our Bylaws is only a summary and is qualified in its entirety by the full text of each of the foregoing.

We have been advised that it is the position of the SEC that insofar as the foregoing provisions may be invoked to disclaim liability for damages arising under the Securities Act, that such provisions are against public policy as expressed in the Securities Act and are therefore unenforceable.

**Item 15. Recent Sales of Unregistered Securities** 

During the past three years, we issued unregistered securities as outlined below. Unless otherwise specifically noted, no commissions were paid in connection with the issuances described below and each issuance was effected pursuant to Section 4(a)(2) of the Securities Act, as a transaction by an issuer not involving any public offering, and/or Regulation D promulgated thereunder. In all issuances described below, the Company took appropriate measures to restrict transfer of the securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) From March 31, 2023 to March 31, 2026, the Company issued incentive stock options to purchase 582,010 shares of the Company's common stock and nonqualified stock options to purchase 476,897 shares of the Company's common stock under the Global Digital Holdings, Inc. 2022 Option Plan to employees, directors, consultants and advisors in reliance on Rule 701of the Securities Act. Options were issued with exercise prices ranging from $0.75 to $10.80 and individual vesting schedules.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) From March 31, 2023 to March 31, 2026, the Company issued warrants to purchase 675,182 shares of the Company's common stock to accredited investors. 48,218 warrants were issued to investors purchasing shares in the Company's private placements; 70,877 warrants were issued as lease consideration pursuant to the Company's equipment leases with certain Alder entities; 97,103 warrants were issued as consideration for the payoff of such equipment leases; 9,334 warrants were issued in consideration for the amendment and restatement of the Company's line of credit with Trailhead Growth, LP; 67,386 warrants were issued in consideration for the conversion of outstanding debt; 300,991 warrants were issued in consideration for various professional services rendered to the Company; 67,181 warrants were issued as consideration for assistance with the Company's capital raising efforts; and 13,334 warrants were issued as consideration for the purchase of miners; and 758 warrants were issued as consideration for a new limited partner investor in ATFP Cloud SPV 1, LP. Warrants were issued with exercise prices ranging from $0.03 to $10.80. All warrants vested immediately except for a warrant to purchase 23,411 shares, 54% of which vested immediately and the remainder of which vested in equal installments over 36 months thereafter

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) From November 2023 through January 2025, the Company issued 9,103,000 shares of Series D Preferred Stock at a price of $1.00 per share to accredited investors in a private placement.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) In March 2024, TCM issued a $3 million convertible note to accredited investors, which converted into three million shares of preferred stock. On July 1, 2024, a portion of the convertible note converted into 1,356,676 shares of TCM preferred stock. The remainder will convert at maturity, as adjusted for any portion of the note paid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) On April 1, 2025, the Company entered into Contribution and Exchange Agreements, as amended, with shareholders of TCM, pursuant to which each TCM shareholder contributed all outstanding equity securities in TCM to the Company in exchange for equity securities of the Company. As a result, TCM became a wholly owned subsidiary of the Company, with 75% of the Company's capital stock held by Company shareholders and 25% of the Company's capital stock held by former TCM shareholders. As adjusted to give effect to the Conversion or the Reverse Stock Split, the total acquisition consideration was $39,350,572, which was comprised of 2,574,718 shares of QumulusAI's common stock and 1,432,182 shares of QumulusAI's Series D Preferred Stock (with a total fair value of $20,250,013), options to purchase 668,392 shares of the Company's common stock to replace TCM options with an exercise price of $0.23 per share that vest according to individual vesting schedules (with a total fair value of $1,883,995), and the fair value of the Company's prior investment in TCM (with a total fair value of $17,216,604).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) On May 23, 2025, the Company settled $93,333 in principal outstanding under convertible promissory notes through the issuance of 84,756 shares of its Series D Preferred Stock to accredited investors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) On September 5, 2025, the Company settled $473,331 in principal outstanding under convertible promissory notes through the issuance of 429,836 shares of Series D Preferred Stock to accredited investors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) On September 30, 2025, in connection with the conversion of all outstanding series of preferred stock into common stock, the Company issued 11,790,879 shares of common stock to existing shareholders in exchange for the cancellation of their shares of preferred stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) From August 1, 2025 through October 17, 2025, the Company issued 866,787 shares of common stock to accredited investors upon the exercise warrants at exercise prices ranging from $0.03 to $6.42 per share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) On August 1, 2025, September 1, 2025, and October 17, 2025, the Company issued an aggregate of 193,650 shares of common stock to certain accredited investors in settlement of $2,203,937 of lease liability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11) From July 1, 2025 through March 9, 2026, QumulusAI issued 2,657,195 shares of common stock at a price of $10.80 per share to accredited investors in a private placement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12) On October 1, 2025, in exchange for its ownership interests in QAI Moon, QumulusAI issued 19,723 common shares valued at $10.80 per share for a total value of $213,000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(13) From March 10, 2026 through March 31, 2026, QumulusAI issued 2,160 shares of common stock at a price per share of $23.15 per share to accredited investors in a private placement.

------

**Item 16. Exhibits and Financial Statement Schedules**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(a) Exhibits***

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 2.1+ | [Limited Liability Company Interest Purchase Agreement between 10x Digital Infrastructure LLC D/B/A 10x Capital, SPRE Tulsa OK, LLC and Bishops Bowl Capital, LLC, dated January 12, 2026](http://www.sec.gov/Archives/edgar/data/2084026/000143774926004148/ex_920037.htm) |
| 2.2+ | [First Amendment to Limited Liability Company Interest Purchase Agreement between 10x Digital Infrastructure LLC D/B/A 10x Capital, SPRE Tulsa OK, LLC and Bishops Bowl Capital, LLC, dated February 12, 2026](http://www.sec.gov/Archives/edgar/data/2084026/000143774926004148/ex_920612.htm) |
| 3.1\* | Second Amended and Restated Articles of Incorporation of QumulusAI, Inc. |
| 3.2\*\*  | [Amended and Restated Bylaws of QumulusAI, Inc.](ex_952677.htm) |
| 4.1(1)\*\* | [Registration Rights Agreement by and among QumulusAI, Inc. and the undersigned buyers](ex_954437.htm) |
| 5.1\* | Opinion of Fox Rothschild LLP |
| 10.1(1)+ | [Amended and Restated Hosting Service Agreement between SPRE Watonga OK, LLC and Cerberus Digital, LLC dated April 24, 2024](http://www.sec.gov/Archives/edgar/data/2084026/000143774926004148/ex_919248.htm) |
| 10.2(1)+ | [Amended and Restated Bitcoin Miner Hosting Agreement between SPRE Watonga OK, LLC and Fortitude Mining LLC dated February 4, 2026](http://www.sec.gov/Archives/edgar/data/2084026/000143774926004148/ex_919249.htm) |
| 10.3(1)+ | [Amended and Restated Bitcoin Miner Hosting Agreement between SPRE Watonga OK, LLC and Fortitude Mining LLC dated February 4, 2026](http://www.sec.gov/Archives/edgar/data/2084026/000143774926004148/ex_919250.htm) |
| 10.4 | [Intentionally Omitted] |
| 10.5 | [Intentionally Omitted] |
| 10.6+ | [QumulusAI Marketplace Agreement between The Cloud Minders Inc. and Hydra Host, Inc. dated May 9, 2025.](http://www.sec.gov/Archives/edgar/data/2084026/000143774926004148/ex_919253.htm) |
| 10.7+ | [QumulusAI Customer Agreement between The Cloud Minders Inc. and Procon Analytics, LLC dated May 7, 2025.](http://www.sec.gov/Archives/edgar/data/2084026/000143774925039073/ex_902140.htm) |
| 10.8 | [Intentionally Omitted] |
| 10.9+ | [Master Service Agreement between The Cloud Minders, Inc. and Performiv LLC dated October 31, 2023](http://www.sec.gov/Archives/edgar/data/2084026/000143774925039073/ex_902141.htm) |
| 10.10 | [Intentionally Omitted] |
| 10.11+ | [Demand Response Service Agreement between SPRE Watonga OK, LLC and NuEnergen, LLC dated February 1, 2024](http://www.sec.gov/Archives/edgar/data/2084026/000143774925039073/ex_902143.htm) |
| 10.12+ | [ASIC Mining Data Center Field Services Agreement between SPRE Watonga OK, LLC and PaerTree Inc. dated August 14, 2024](http://www.sec.gov/Archives/edgar/data/2084026/000143774925039073/ex_902144.htm) |
| 10.13 | [Intentionally Omitted] |
| 10.14+ | [Electric Service Will Serve Agreement between SPRE Watonga OK, LLC and Oklahoma Gas and Electric Company dated February 14, 2024](http://www.sec.gov/Archives/edgar/data/2084026/000143774925039073/ex_902244.htm) |
| 10.15 | [Intentionally Omitted] |
| 10.16(1)+ | [Power Purchase Agreement between City of Denton, Texas, DBA Denton Municipal Electric and SPRE Denton TX, LLC dated September 1, 2024](http://www.sec.gov/Archives/edgar/data/2084026/000143774926004148/ex_919255.htm) |
| 10.17+ | [Equipment Lease Agreement between The Cloud Minders Inc. and ATFP Cloud SPV I, LP dated January 30, 2025](http://www.sec.gov/Archives/edgar/data/2084026/000143774925039073/ex_902147.htm) |

---

------

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 10.18+ | [Equipment Lease Agreement between TCM Cloud 1, LLC and ATFP Cloud SPV IV, LP dated December 12, 2024](http://www.sec.gov/Archives/edgar/data/2084026/000143774925039073/ex_902223.htm) |
| 10.19+ | [Equipment Lease Agreement between TCM Cloud 1, LLC and ATFP Cloud SPV III, LP dated September 9, 2024](http://www.sec.gov/Archives/edgar/data/2084026/000143774925039073/ex_902224.htm) |
| 10.20+ | [First Amended and Restated Equipment Lease Agreement between TCM Cloud 1, LLC and ATFP Cloud SPV I, LP dated September 9, 2024](http://www.sec.gov/Archives/edgar/data/2084026/000143774925039073/ex_902225.htm) |
| 10.21+ | [First Amended and Restated Equipment Lease Agreement between TCM Cloud 1, LLC and ATFP Cloud SPV II, LP dated September 9, 2024](http://www.sec.gov/Archives/edgar/data/2084026/000143774925039073/ex_902226.htm) |
| 10.22+ | [Second Amended and Restated Profit Share Agreement among ATFP Cloud SPV I, LP, ATFP Cloud SPV II, LP, ATFP Cloud SPV III, LP, ATFP Cloud SPV IV, LP and TCM Cloud 1, LLC dated December 12, 2024](http://www.sec.gov/Archives/edgar/data/2084026/000143774925039073/ex_902227.htm) |
| 10.23+ | [Service Agreement by and between The Cloud Minders and Alder Technology, LLC, dated September 1, 2023](http://www.sec.gov/Archives/edgar/data/2084026/000143774925039073/ex_902228.htm) |
| 10.24 | [Intentionally Omitted] |
| 10.25 | [Intentionally Omitted] |
| 10.26 | [Intentionally Omitted] |
| 10.27 | [Intentionally Omitted] |
| 10.28+ | [Surface Lease Agreement between TOM-STACK, LLC and SPRE WATONGA OK, LLC, effective January 12, 2024](http://www.sec.gov/Archives/edgar/data/2084026/000143774925039073/ex_902233.htm) |
| 10.29+ | [Lease Agreement between City of Denton and SPRE Denton TX, LLC, dated September 1, 2024](http://www.sec.gov/Archives/edgar/data/2084026/000143774925039073/ex_902234.htm) |
| 10.30+ | [Master Services Agreement, by and between The Cloud Minders, Inc. and H5 Data Centers, LLC, dated December 9, 2024](http://www.sec.gov/Archives/edgar/data/2084026/000143774925039073/ex_902235.htm) |
| 10.31+ | [Amended and Restated Collateralized Line of Credit between Trailhead Growth, LP and Global Digital Holdings, dated April 26, 2024](http://www.sec.gov/Archives/edgar/data/2084026/000143774925039073/ex_902236.htm) |
| 10.32+ | [Amended and Restated Loan and Security Agreement between Trailhead Growth, LP and Global Digital Holdings, dated April 26, 2024](http://www.sec.gov/Archives/edgar/data/2084026/000143774925039073/ex_902237.htm) |
| 10.33+ | [Global Digital Holdings, Inc. Convertible Promissory Note between Global Digital Holdings, Inc. and The Cloud Minders, LLC, dated November 1, 2023](http://www.sec.gov/Archives/edgar/data/2084026/000143774925039073/ex_902238.htm) |

---

------

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 10.34+ | [Loan and Security Agreement 1-B between WAHA Technologies, Inc. and GC Opportunities 2 Private Fund, LP, dated February 15, 2022, as modified on October 4, 2022](http://www.sec.gov/Archives/edgar/data/2084026/000143774925039073/ex_902239.htm) |
| 10.35+ | [Loan Modification Agreement between WAHA Technologies, Inc. and GC Opportunities 2 Private Fund, LP, dated October 4, 2022](http://www.sec.gov/Archives/edgar/data/2084026/000143774925039073/ex_902240.htm) |
| 10.36+ | [Interest Only Balloon Note between WAHA Technologies, Inc. and Alder Mortgage Group, LLC, dated April 14, 2022](http://www.sec.gov/Archives/edgar/data/2084026/000143774925039073/ex_902241.htm) |
| 10.37+ | [Line of Credit Agreement between Ian Gerard and The Cloud Minders, Inc. dated December 31, 2021](http://www.sec.gov/Archives/edgar/data/2084026/000143774925039073/ex_902242.htm) |
| 10.38+ | [Amendment No. 1 to Line of Credit Agreement between Ian Gerard and The Cloud Minders, Inc. dated December 18, 2024](http://www.sec.gov/Archives/edgar/data/2084026/000143774925039073/ex_902243.htm) |
| 10.39+ | [Form of Lock-Up Agreement](http://www.sec.gov/Archives/edgar/data/2084026/000143774926004148/ex_919256.htm) |
| 10.40\*\*  | [Global Digital Holdings, Inc. 2022 Option Plan](ex_954475.htm)  |
| 10.41+ | [Amendment No. 1 to Global Digital Holdings, Inc. 2022 Option Plan](http://www.sec.gov/Archives/edgar/data/2084026/000143774925039073/ex_903158.htm) |
| 10.42+ | [Form of Non-Qualified Stock Option Agreement under the Global Digital Holdings, Inc. 2022 Option Plan, as amended](http://www.sec.gov/Archives/edgar/data/2084026/000143774925039073/ex_903159.htm) |
| 10.43+ | [Form of Incentive Stock Option Agreement under the Global Digital Holdings, Inc. 2022 Option Plan, as amended](http://www.sec.gov/Archives/edgar/data/2084026/000143774925039073/ex_903160.htm) |
| 10.44\*\*  | [QumulusAI, Inc. 2026 Equity Incentive Plan](ex_952678.htm) |
| 10.45\*\*  | [Form of Non-Employee Director Restricted Stock Unit Award Agreement under the QumulusAI, Inc. 2026 Equity Incentive Plan](ex_952679.htm) |
| 10.46\*\*  | [Form of Employee Restricted Stock Unit Award Agreement under the QumulusAI, Inc. 2026 Equity Incentive Plan](ex_952680.htm) |
| 10.47\*\*  | [Form of Employee Performance Stock Unit Award Agreement under the QumulusAI, Inc. 2026 Equity Incentive Plan](ex_952681.htm) |
| 10.48\*\*  | [Form of Employee Incentive Stock Option Award Agreement under the QumulusAI, Inc. 2026 Equity Incentive Plan](ex_952682.htm) |
| 10.49\*\*  | [Form of Employee Non-Qualified Stock Option Award Agreement under the QumulusAI, Inc. 2026 Equity Incentive Plan](ex_952683.htm) |
| 10.50+ | [Compensation Agreement between QumulusAI, Inc. and Michael Maniscalco, dated September 1, 2025](http://www.sec.gov/Archives/edgar/data/2084026/000143774926004148/ex_919257.htm) |
| 10.51+  | [Compensation Agreement between QumulusAI, Inc. and Scott Krosnowski, dated September 1, 2025](http://www.sec.gov/Archives/edgar/data/2084026/000143774926004148/ex_919258.htm) |
| 10.52+ | [Compensation Agreement between QumulusAI, Inc. and Ankur Chatterjee, dated September 1, 2025](http://www.sec.gov/Archives/edgar/data/2084026/000143774926004148/ex_919259.htm) |
| 10.53+ | [Compensation Agreement between QumulusAI, Inc. and Ryan DiRocco, dated September 1, 2025](http://www.sec.gov/Archives/edgar/data/2084026/000143774926004148/ex_919260.htm) |
| 10.54+ | [Compensation Agreement between QumulusAI, Inc. and Stephen Hunton, dated September 1, 2025](http://www.sec.gov/Archives/edgar/data/2084026/000143774926004148/ex_919261.htm) |
| 10.55+ | [Compensation Agreement between QumulusAI, Inc. and Patrick Gahan, dated September 1, 2025](http://www.sec.gov/Archives/edgar/data/2084026/000143774926004148/ex_919262.htm) |
| 10.56+ | [Offer Letter between QumulusAI, Inc. and Steve Gertz, dated December 11, 2025](http://www.sec.gov/Archives/edgar/data/2084026/000143774926004148/ex_919263.htm) |

---

------

---

| | |
|:---|:---|
| 10.57\* | Form of Director and Officer Indemnification Agreement |
| 10.58 | [Intentionally Omitted] |
| 10.59+ | [License and Service Agreement by and between QumulusAI, Inc. and Connected Nation Internet Exchange Point, LLC, dated January 14, 2026.](http://www.sec.gov/Archives/edgar/data/2084026/000143774926011598/ex_941008.htm) |
| 10.60+ | [Form of Warrant](http://www.sec.gov/Archives/edgar/data/2084026/000143774926011598/ex_941009.htm) |
| 10.61\* | USD.AI Customer Agreement between USD.AI Foundation and The Cloud Minders, Inc., dated April 17, 2026 |
| 10.62(1)\*\* | [Securities Purchase Agreement between QumulusAI, Inc. and each of the investors listed on the Schedule of Buyers attached thereto, dated March 26, 2026](ex_954476.htm) |
| 10.63(1)\*\* | [Form of Senior Secured Convertible Note](ex_954477.htm) |
| 10.64(1)\*\* | [Security and Pledge Agreement between QumulusAI, Inc. and the Collateral Agent party thereto, dated March 26, 2026](ex_954478.htm) |
| 21.1\*\*  | [Subsidiaries of QumulusAI, Inc.](ex_952684.htm) |
| 23.1\*\* | [Consent of Independent Registered Public Accounting Firm, WithumSmith+Brown, PC](ex_954479.htm) |
| 23.2\*\*  | [Consent of Independent Auditors, BPS & Associates, LLC](ex_954676.htm) |
| 23.3\* | Consent of Fox Rothschild LLP (included in Exhibit 5.1) |
| 24.1\*\* | [Power of Attorney (included on signature page)](#poa) |
| 107+ | [Filing Fee Table](http://www.sec.gov/ix?doc=/Archives/edgar/data/2084026/000143774925039073/ex_903142.htm) |

---

------

\* To be filed by amendment.

\*\* Filed herewith.

+ Previously filed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Confidential portions of this exhibit have been redacted in compliance with Item 601(b)(10) of Regulation S-K.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(b) Financial Statement Schedules***

Schedules have been omitted because the information required to be set forth therein is not applicable or is shown in the financial statements or notes thereto.

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**Item 17. Undertakings**

(a) The undersigned registrant hereby undertakes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) To include any prospectus required by Section 10(a)(3) of the Securities Act;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) (§230.424(b) of this chapter) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the "Calculation of Filing Fee Tables" or "Calculation of Registration Fee" table, as applicable, in the effective registration statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

Provided, however, that Paragraphs (a)(1)(i), (ii), and (iii) of this section do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the SEC by the registrant pursuant to section 13 or section 15(d) of the Exchange Act that are incorporated by reference in the registration statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) That, for the purpose of determining liability under the Securities Act to any purchaser: If the registrant is subject to Rule 430C (§230.430C of this chapter), each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A (§230.430A of this chapter), shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424 (§230.424 of this chapter);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

(b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant's annual report pursuant to section 13(a) or section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(d) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

(e) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(f) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

------

**SIGNATURES**

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Marietta, State of Georgia, on May 1, 2026.

---

| | |
|:---|:---|
| **QUMULUSAI, INC.** | **QUMULUSAI, INC.** |
| By: | */s/ Michael Maniscalco* |
| Name: | Michael Maniscalco |
| Title: | Chief Executive Officer |

---

**POWER OF ATTORNEY**

We, the undersigned officers and directors of QumulusAI, Inc., a Georgia corporation, hereby constitute and appoint Michael Maniscalco and Scott Krosnowski, and each of them individually, as the true and lawful agent and attorney-in-fact of the undersigned with full power and authority in said agent and attorney-in-fact to sign for the undersigned and in their respective names as an officer/director of the Company, any and all amendments (including post-effective amendments) to this registration statement on Form S-1 (or any other registration statement for the same offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act) and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, and with full power of substitution, hereby ratifying and confirming all that said attorney-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| **Signature**  | **Capacity**  | **Date**  |
| */s/ Michael Maniscalco* | Chief Executive Officer and Chairman of the Board of Directors  | May 1, 2026 |
| Michael Maniscalco  | (Principal Executive Officer)  |  |
| */s/ Scott Krosnowski* | Chief Financial Officer  | May 1, 2026 |
| Scott Krosnowski  | (Principal Financial and Accounting Officer)  |  |
| */s/ Homaira Akbari* | Director | May 1, 2026 |
| Homaira Akbari |  |  |
| */s/ Patrick Gahan* | SVP, Capital Markets and Director  | May 1, 2026 |
| Patrick Gahan  |  |  |
| */s/ Stacy Kenworthy* | Director  | May 1, 2026 |
| Stacy Kenworthy  |  |  |
| */s/ Michael Mulica* | Director  | May 1, 2026 |
| Michael Mulica  |  |  |
| */s/ David Rench* | Director  | May 1, 2026 |
| David Rench  |  |  |
| */s/ Barry Schwartz* | Director  | May 1, 2026 |
| Barry Schwartz  |  |  |

---

## Exhibit 3.2

**Exhibit 3.2**

**AMENDED AND RESTATED BYLAWS**

**OF**

**QUMULUSAI, INC.**

(the "Corporation")

ARTICLE ONE – OFFICES

1.1 <u>Registered Office and Registered Agent</u>. The location of the registered office and the name of the registered agent of the Corporation, in the State of Georgia, will be as stated in the Articles of Incorporation of the Corporation, as amended and restated from time to time (the "Articles"), or as may be determined from time to time by resolution of the Board of Directors of the Corporation (the "Board") and on file in the appropriate public offices of the State of Georgia as provided by law.

1.2 <u>Other Offices</u>. The Corporation may have other offices located within or outside the State of Georgia as the Board may determine.

ARTICLE TWO – MEETINGS OF SHAREHOLDERS

2.1 <u>Annual Meeting</u>. If required by applicable law, an annual meeting of shareholders of the Corporation shall be held for the election of directors either at such date, time and place, if any, either within or without the State of Georgia, or by means of remote communication, as may be designated by resolution of the Board from time to time. Any other proper business may be transacted at the annual meeting. The Corporation may postpone, reschedule, adjourn, recess or cancel any annual meeting of shareholders previously scheduled.

2.2 <u>Special Meetings</u>. Special meetings of shareholders for any purpose or purposes may be called at any time by the Chairman of the Board, by the Chief Executive Officer, by the President or upon a resolution or affirmative vote of the Board, but such special meetings may not be called by any other person or persons. Business transacted at any special meeting of shareholders shall be limited to the purposes stated in the notice. The Corporation may postpone, reschedule, adjourn, recess or cancel any special meeting of shareholders previously scheduled. Any special meeting may be held either at a place, within or without the State of Georgia, or by means of remote communication, as may be designated by resolution of the Board from time to time.

2.3 <u>Notice of Meetings</u>. Unless waived as contemplated in Section 6.2 of these Bylaws, notice of the date, time and place of all meetings of shareholders shall be given not less than ten (10) days, and not more than sixty (60) days prior to the meeting, to each shareholder of record of the Corporation entitled to vote at such meeting in accordance with Section 6.1 of these Bylaws. In the case of an annual or substitute annual meeting, the notice of the meeting need not state the purpose or purposes of the meeting unless the purpose or purposes constitute a matter which is required by law to be stated in the notice of the meeting. In the case of a special meeting, the notice of meeting shall state the purpose or purposes for which the meeting is called.

2.4 <u>Quorum</u>. The holders of one-third (1/3) of the shares of stock of the Corporation entitled to vote, present in person or represented by proxy, will constitute a quorum at all meetings of the shareholders for the transaction of any business, except as otherwise provided by law, the Articles or these Bylaws. If a quorum is not present at a meeting of the shareholders, the chair of such meeting, the Board or the holders of a majority of the stock present in person or represented by proxy at such meeting will have the power to adjourn the meeting in accordance with Section 2.5 of these Bylaws.

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2.5 <u>Adjournments</u>. Whether or not a quorum is present, the chair of a meeting of shareholders or the Board may adjourn the meeting from time to time for any reasonable purpose and to any other time or place, if any, at which a meeting of shareholders may be held under these Bylaws. The meeting may be adjourned to a specified time and place, without notice to anyone other than an announcement at the meeting at which such adjournment is taken, until a quorum is present. At such adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the original meeting. Provided, however, if the adjournment is for more than thirty (30) days, or if after adjournment a new record date is fixed for the subsequent session of the adjourned meeting, a notice of the subsequent session of the adjourned meeting will be given to each shareholder entitled to vote at the meeting.

2.6 <u>Voting</u>. Unless otherwise provided in the Articles, each shareholder entitled to vote will be entitled to one (1) vote for each share of stock held and registered in such shareholder's name on the books of the Corporation. If the Articles provide for more or less than one (1) vote for any share on any matter, then every reference in these Bylaws to a vote by a majority or other proportion of stock will refer to such majority or other proportion of the votes of such stock on such matters as provided in the Articles. At all meetings of shareholders for the election of directors at which a quorum is present, a plurality of the votes cast shall be sufficient to elect. In all matters other than the election of directors, the affirmative vote of the holders of a majority of the shares of stock of the Corporation who are present in person or represented by proxy at a meeting at which a quorum is present and who are entitled to vote on the subject matter will be the valid corporate act of the shareholders, except in those specific instances in which a larger vote is required by law, the Articles or these Bylaws.

2.7 <u>Proxies</u>. Each shareholder entitled to vote at a meeting of shareholders or to express consent to corporate action in writing without a meeting may authorize another person or persons to act for such shareholder by proxy, but no such proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period. A proxy may be executed in writing (or by an electronic transmission permitted by applicable law, including Rule 14a-19 (or any successor thereto) ("Rule 14a-19") promulgated under the Securities Exchange Act of 1934, as amended (such act, and the rules and regulations promulgated thereunder, the "Exchange Act")) by the shareholder, or by such shareholder's duly authorized attorney in fact. A proxy may be in the form of an electronic transmission that sets forth or is submitted with information from which it can be determined the identity of the shareholder granting such authorization, and that the transmission was authorized by the shareholder. A proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A shareholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by delivering to the Secretary of the Corporation a revocation of the proxy or a new proxy bearing a later date. Any shareholder directly or indirectly soliciting proxies from other shareholders must use a proxy card color other than white, which shall be reserved for the exclusive use by the Board.

2.8 <u>Conduct of Meetings</u>. All meetings of shareholders shall be governed by such rules and decisions as the chair of the meeting, or a parliamentarian appointed by him, may deem appropriate.

2.9 <u>Fixing Date for Determination of Shareholders of Record</u>. For the purpose of determining shareholders entitled to notice of, or to vote at, any meeting of shareholders or any adjournment/postponement thereof, or shareholders entitled to receive payment of any dividend or the allotment of any rights, or in order to make a determination of shareholders for any other purposes, the Board may fix in advance a date as the record date for any such determination of shareholders, such date to be not more than sixty (60) days and not less than ten (10) days prior to the date on which the particular action requiring such determination of shareholders is to be taken. A record date fixed for a shareholders' meeting is effective for any adjournment of such meeting unless the Board fixes a new record date, which it must do if the meeting is adjourned to a date more than one hundred twenty (120) days after the date fixed for the original meeting. If no record date is fixed by the Board, the record date shall be determined in accordance with the provisions of the Georgia Business Corporation Code.

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2.10 <u>List of Shareholders Entitled to Vote</u>. The Secretary or an Assistant Secretary will prepare and make, at least ten (10) days before every meeting of the shareholders, a complete list of the shareholders entitled to vote at the meeting. Such list will be open to the examination of any shareholder entitled to vote at such meeting, for any purpose germane to the meeting, for a period of at least ten (10) days prior to the meeting (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided in the notice of the meeting, or (b) during ordinary business hours at the Corporation's principal place of business. Such list will also be produced and kept at the place of the meeting during the whole time thereof and may be inspected by any shareholder who is present. If the meeting is to be held solely by remote communication, such list will be open to the examination of any shareholder during the whole time of the meeting by reasonably accessible electronic network. Failure to comply with this Section 2.10 will not affect the validity of any action taken at such meeting.

2.11 <u>Written Consent</u>. Unless otherwise provided in the Articles, any action required to be taken or any action that may be taken at any annual or special meeting of the shareholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, are signed by the shareholders who would be entitled to vote at a meeting having voting power to cast not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shareholders entitled to vote were present and voted, and such consent or consents bear the date of signature and are delivered to the Corporation, its registered agent, or to an officer or agent of the Corporation for inclusion with the minutes of proceedings of the shareholders or filing with the corporate records. In order that the Corporation may determine the shareholders entitled to consent, the Board may fix a record date in accordance with Section 2.9 of these Bylaws.

2.12 <u>Inspectors of Election</u>. The Corporation may, and shall if required by law, in advance of any meeting of shareholders, appoint one (1) or more inspectors of election, who may be employees of the Corporation, to act at the meeting or any adjournment thereof and to make a written report thereof. The Corporation may designate one (1) or more persons as alternate inspectors to replace any inspector who fails to act. In the event that no inspector so appointed or designated is able to act at a meeting of shareholders, the chair of the meeting shall appoint one (1) or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of such inspector's duties, shall take and sign an oath to execute faithfully the duties of inspector with strict impartiality and according to the best of such inspector's ability. The inspector or inspectors so appointed or designated shall (a) ascertain the number of shares of capital stock of the Corporation outstanding and the voting power of each such share, (b) determine the shares of capital stock of the Corporation represented at the meeting and the validity of proxies and ballots, (c) count all votes and ballots, (d) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors, and (e) certify their determination of the number of shares of capital stock of the Corporation represented at the meeting and such inspectors' count of all votes and ballots. Such certification and report shall specify such other information as may be required by law. In determining the validity and counting of proxies and ballots cast at any meeting of shareholders of the Corporation, the inspectors may consider such information as is permitted by applicable law. No person who is a candidate for an office at an election may serve as an inspector at such election.

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2.13 <u>Conduct of Meetings</u>. The date and time of the opening and the closing of the polls for each matter upon which the shareholders will vote at a meeting shall be announced at the meeting by the chair of the meeting if required by law. The Board may adopt by resolution such rules and regulations for the conduct of the meeting of shareholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board, the chair shall have the right and authority to convene and (for any or no reason) to recess, adjourn and/or postpone the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chair, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board or prescribed by the chair may include, without limitation, the following: (a) the establishment of an agenda or order of business for the meeting; (b) the determination of when the polls shall open and close for any given matter to be voted on at the meeting; (c) rules and procedures for maintaining order at the meeting and the safety of those present (including, without limitation, rules and procedures for removal of disruptive persons from the meeting); (d) limitations on attendance at or participation in the meeting to shareholders entitled to vote at the meeting, their duly authorized and constituted proxies or such other persons as the chair shall determine; (e) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (f) limitations on the time allotted to questions or comments by participants. The chair, in addition to making any other determinations that may be appropriate to the conduct of the meeting (including, without limitation, determinations with respect to the administration and/or interpretation of any of the rules, regulations or procedures of the meeting, whether adopted by the Board or prescribed by the chair), shall, if the facts warrant, determine and declare to the meeting that a matter or business was not properly brought before the meeting and if such chair should so determine, the chair shall so declare to the meeting and any such matter or business not properly brought before the meeting shall not be transacted or considered. Unless and to the extent determined by the Board or the chair, meetings of shareholders shall not be required to be held in accordance with the rules of parliamentary procedure.

2.14 <u>Notice of Shareholder Business to be Conducted at a Meeting of Shareholders</u>. For purposes of this Section 2.14, a "Noticing Shareholder" must be either a "Record Holder" or a "Nominee Holder." A "Record Holder" is a shareholder that holds of record stock of the Corporation entitled to vote at the meeting on the business (including any election of a director) to be appropriately conducted at the meeting. A "Nominee Holder" is a shareholder that holds such stock through a nominee or "street name" holder of record and can demonstrate to the Corporation such indirect ownership of such stock and such Nominee Holder's entitlement to vote such stock on such business.

In order for a "Noticing Shareholder" to properly bring any item of business before a meeting of shareholders, the Noticing Shareholder must give timely notice thereof in writing to the Secretary of the Corporation in compliance with the requirements of this Section 2.14, which shall constitute an "advance notice provision" for annual meetings for purposes of Rule 14a-4(c)(1) under the Exchange Act:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) To be timely, a Noticing Shareholder's notice shall be delivered to the Secretary at the principal executive offices of the Corporation:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) in the case of an annual meeting of shareholders, not earlier than the close of business on the one hundred twentieth (120<sup>th</sup>) day and not later than the close of business on the ninetieth (90<sup>th</sup>) day prior to the first anniversary of the preceding year's annual meeting; provided, however, that in the event the date of the annual meeting is more than thirty (30) days before or more than sixty (60) days after such anniversary date, notice by the shareholder to be timely must be so delivered not earlier than the close of business on the one hundred twentieth (120<sup>th</sup>) day prior to the date of such annual meeting and not later than the close of business on the later of the ninetieth (90<sup>th</sup>) day prior to the date of such annual meeting or, if the first public announcement of the date of such annual meeting is less than one hundred (100) days prior to the date of such annual meeting, the tenth (10<sup>th</sup>) day following the day on which public announcement of the date of such meeting is first made by the Corporation; and

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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;(ii) in the case of a special meeting of shareholders called for the purpose of electing directors, not earlier than the close of business on the one hundred twentieth (120<sup>th</sup>) day prior to such special meeting and not later than the close of business on the later of the ninetieth (90<sup>th</sup>) day prior to such special meeting or the tenth (10<sup>th</sup>) day following the date on which notice of the date of the special meeting was mailed or public disclosure of the date of the special meeting was made, whichever first occurs.

In no event shall any adjournment or postponement of an annual meeting, or the announcement thereof, commence a new time period for the giving of a shareholder's notice as described above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) To be in proper form, whether in regard to a nominee for election to the Board or other business, a Noticing Shareholder's notice to the Secretary must:

&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) Set forth, as to the Noticing Shareholder and, if the Noticing Shareholder holds for the benefit of another, the beneficial owner on whose behalf the nomination or proposal is made, the following information together with a representation as to the accuracy of the information:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) the name and address of the Noticing Shareholder as they appear on the Corporation's books and, if the Noticing Shareholder holds for the benefit of another, the name and address of such beneficial owner (collectively "Holder"),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) the class or series and number of shares of the Corporation that are, directly or indirectly, owned beneficially and/or of record, and the date such ownership was acquired,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the Corporation or with a value derived in whole or in part from the value of any class or series of shares of the Corporation, whether or not the instrument or right shall be subject to settlement in the underlying class or series of capital stock of the Corporation or otherwise (a "Derivative Instrument") that is directly or indirectly owned beneficially by the Holder and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the Corporation,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) any proxy, contract, arrangement, understanding, or relationship pursuant to which the Holder has a right to vote or has granted a right to vote any shares of any security of the Corporation,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E) any short interest in any security of the Corporation (for purposes of these bylaws a person shall be deemed to have a short interest in a security if the Holder directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security),

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(F) any rights to dividends on the shares of the Corporation owned beneficially by the Holder that are separated or separable from the underlying shares of the Corporation,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(G) any proportionate interest in shares of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership or limited liability company or similar entity in which the Holder is a general partner or, directly or indirectly, beneficially owns an interest in a general partner, is the manager, managing member or directly or indirectly beneficially owns an interest in the manager or managing member of a limited liability company or similar entity,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(H) any performance-related fees (other than an asset-based fee) that the Holder is entitled to based on any increase or decrease in the value of shares of the Corporation or Derivative Instruments, if any,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(I) any arrangements, rights, or other interests described in Section 2.14(b)(i)(C)-(H) of these Bylaws held by members of such Holder's immediate family sharing the same household,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) a representation that such shareholder intends to appear in person or by proxy at the meeting to nominate the person(s) named or propose the business specified in the notice and whether or not such shareholder intends to, or is part of a group that intends to, deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation's outstanding shares required to approve the nomination(s) or the business proposed and/or otherwise to solicit proxies from shareholders in support of the nomination(s) or the business proposed,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(K) if applicable, a representation as to whether or not such shareholder or any of its respective affiliates, associates or others acting in concert therewith, intended to solicit proxies in support of director nominees in accordance with Rule 14a-19,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(L) a certification regarding whether or not such shareholder has complied with all applicable federal, state and other legal requirements in connection with such shareholder's acquisition of shares or other securities of the Corporation and/or such shareholder's acts or omissions as a shareholder of the Corporation,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(M) any other information relating to such shareholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations thereunder, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(N) any other information as reasonably requested by the Corporation.

Such information shall be provided as of the date of the notice and shall be supplemented by the Holder not later than ten (10) days after the record date for the meeting to disclose such ownership as of the record date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) If the notice relates to any business other than a nomination of a director or directors that the shareholder proposes to bring before the meeting, the notice must also 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) a brief description of the business desired to be brought before the meeting (including the text of any resolutions proposed for consideration), the reasons for conducting such business at the meeting, and any material direct or indirect interest of the Holder in such business, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) a description of all agreements, arrangements and understandings, direct and indirect, between the Holder, and any other person or persons (including their names) in connection with the proposal of such business by the Holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) If the notice relates to a nomination or nominations, the notice must also set forth, as to each person whom the Holder proposes to nominate for election or reelection to the Board:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) all information relating to the nominee (including, without limitation, the nominee's name, age, business and residence address and principal occupation or employment and the class or series and number of shares of capital stock of the Corporation that are owned beneficially or of record by the nominee) that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations thereunder (including such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) a description of any agreements, arrangements and understandings between or among such shareholder, on the one hand, and any other persons, on the other hand, in connection with the nomination of such person for election as a director, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) a description of all direct and indirect compensation and other material monetary agreements, arrangements, and understandings during the past two (2) calendar years and through the date of such nomination, and any other material relationships, between or among the Holder and respective affiliates and associates, or others acting in concert therewith, on the one hand, and each proposed nominee, and his or her respective affiliates and associates, or others acting in concert therewith, on the other hand, including, without limitation all information that would be required to be disclosed pursuant to Item 404 of Regulation S-K if the Holder making the nomination or on whose behalf the nomination is made, if any, or any affiliate or associate thereof or person acting in concert therewith, were the "registrant" for purposes of Item 404 of Regulation S-K and the nominee were a director or executive officer of such registrant.

&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) With respect to each nominee for election or reelection to the Board, the Noticing Shareholder shall include a completed and signed questionnaire, representation, and agreement required by Section 2.15 of these Bylaws. The Corporation may require any proposed nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of the proposed nominee to serve as an independent director of the Corporation or that could be material to a reasonable shareholder's understanding of the independence, or lack thereof, of the nominee.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) For purposes of these bylaws, "public announcement" shall mean disclosure in a press release reported by a national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14, or 15(d) of the Exchange Act. The terms "affiliate" and "associate" are fairly broad and are defined by reference to Rule 12b-2 under the Exchange Act. An "affiliate" is any "person that directly, or indirectly through one (1) or more intermediaries, controls, or is controlled by, or is under common control with, the person specified." The term "associate" of a person means: (i) any Corporation or organization (other than the registrant or a majority-owned subsidiary of the registrant) of which such person is an officer or partner or is, directly or indirectly, the beneficial owner of ten (10) percent or more of any class of equity securities, (ii) any trust or other estate in which such person has a substantial beneficial interest or as to which such person serves as trustee or in a similar fiduciary capacity, and (iii) any relative or spouse of such person, or any relative of such spouse, who has the same home as such person or who is a director or officer of the registrant or any of its parents or subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Only those shareholder nominees who are nominated in accordance with the procedures set forth in these bylaws shall be eligible to serve as directors. Only such business shall be conducted at a meeting of shareholders as shall have been brought before the meeting in accordance with the procedures set forth in these bylaws, provided, however, that, once business has been properly brought before the meeting in accordance with this Section 2.14, nothing in this Section 2.14(e) shall be deemed to preclude discussion by any shareholder of such business. If any information submitted pursuant to this Section 2.14 by any shareholder proposing a nominee(s) for election as a director at a meeting of shareholders is inaccurate in any material respect, such information shall be deemed not to have been provided in accordance with this Section 2.14. Except as otherwise provided by law, the Articles, or these Bylaws, the chair of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in compliance with the procedures set forth in these Bylaws and, if he or she should determine that any proposed nomination or business is not in compliance with these Bylaws, he or she shall so declare to the meeting and any such nomination or business not properly brought before the meeting shall be disregarded or not be transacted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Notwithstanding the foregoing provisions of this Section 2.14, unless otherwise required by law, (i) no shareholder making such a nomination shall solicit proxies in support of director nominees other than the Corporation's nominees unless such shareholder has complied with Rule 14a-19 in connection with the solicitation of such proxies, including the provision to the Corporation of notices required thereunder in a timely manner unless the information required by Rule 14a-19(b) has been provided in a preliminary or definitive proxy statement previously filed by such person and (ii) if any shareholder making such a nomination (A) provides notice pursuant to Rule 14a-19(b), and (B) subsequently fails to comply with the requirements of Rule 14a-19 or any other rules and regulations thereunder, including the provision to the Corporation of notices required thereunder in a timely manner, then the Corporation shall disregard any proxies or votes solicited for any proposed nominees on the Corporation's proxy card other than the Corporation's nominees and such nomination shall be disregarded, notwithstanding that proxies in favor thereof may have been received by the Corporation. In addition, any shareholder that provides notice pursuant to Rule 14a-19(b) shall notify the Secretary within two (2) business days of any change in such shareholder's intent to solicit proxies from the holders of shares representing at least sixty-seven (67%) of the voting power of shares entitled to vote on the election of directors in support of director nominees other than the Corporation's nominees. Upon request by the Corporation, if any shareholder making such a nomination provides notice pursuant to Rule 14a-19(b), such shareholder shall deliver to the Corporation, no later than five (5) business days prior to the applicable meeting, reasonable evidence that it has met the requirements of Rule 14a-19(a)(3). Notwithstanding anything to the contrary set forth herein, and for the avoidance of doubt, the nomination of any person whose name is included as a nominee in the Corporation's proxy statement, notice of meeting or other proxy materials for any annual meeting (or any supplement thereto) as a result of any notice provided by any shareholder pursuant to Rule 14a-19(b) promulgated under the Exchange Act with respect to such proposed nominee and whose nomination is not made by or at the direction of the Board or any authorized committee thereof shall not be deemed (for purposes of this Section 2.14 or otherwise) to have been made pursuant to the notice of meeting given by or at the direction of the Board and any such nominee may only be nominated by a shareholder of the Corporation pursuant to this Section 2.14.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Notwithstanding the foregoing provisions of these Bylaws, a Noticing Shareholder also shall comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in these Bylaws; provided, however, that any references in these Bylaws to the Exchange Act or the rules thereunder are not intended to and shall not limit the requirements applicable to nominations or proposals as to any other business to be considered pursuant to this Section 2.14.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Nothing in these Bylaws shall be deemed to affect any rights of shareholders to request inclusion of proposals in the Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act. Notice of shareholder proposals that are, or that the Noticing Shareholder intends to be, governed by Rule 14a-8 under the Exchange Act are not governed by these Bylaws.

2.15 <u>Submission of Questionnaire; Representation and Agreement</u>. To be eligible to be a nominee for election or reelection as a director of the Corporation by a Holder, a person must complete and deliver (in accordance with the time periods prescribed for delivery of notice under Section 2.14 of these Bylaws) to the Secretary at the principal executive offices of the Corporation a written questionnaire providing the information requested about the background and qualifications of such person and the background of any other person or entity on whose behalf the nomination is being made and a written representation and agreement (the questionnaire, representation, and agreement to be in the form provided by the Secretary upon written request) that such person:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) is not and will not become a party to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how the person, if elected as a director of the Corporation, will act or vote on any issue or question (a "Voting Commitment") that has not been disclosed to the Corporation; 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) any Voting Commitment that could limit or interfere with the person's ability to comply, if elected as a director of the Corporation, with the person's fiduciary duties under applicable law,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement, or indemnification in connection with service or action as a director that has not been disclosed therein, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) in the person's individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if elected as a director of the Corporation, and will comply with all applicable publicly disclosed corporate governance, conflict of interest, confidentiality, and stock ownership and trading policies and guidelines of the Corporation.

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ARTICLE THREE – BOARD OF DIRECTORS

3.1 <u>Powers</u>. The business and affairs of the Corporation will be managed by and under the direction of the Board. In addition to the powers and authority expressly conferred upon it by these Bylaws, the Board may exercise all such powers of the Corporation, and do all such lawful acts and things as are not by statute, the Articles or by these Bylaws directed or required to be exercised or done by the shareholders.

3.2 <u>Number; Qualifications</u>. The Board shall consist of one (1) or more members, the number thereof to be determined from time to time by resolution of the Board. Directors, each of whom must be a natural person, need not be shareholders.

3.3 <u>Election; Resignation; Vacancies; Removal</u>. Directors shall be elected to hold office until the next annual meeting of shareholders and until the election and qualification of such directors' respective successors, subject to such directors' earlier death, resignation, disqualification or removal. Any director may resign at any time upon written notice to the Chairman of the Board, the Chief Executive Officer, the President or the Secretary of the Corporation. Unless otherwise provided by law or the Articles, any newly created directorship or any vacancy occurring in the Board for any cause may be filled by either (a) the affirmative vote of the holders of a majority in voting power of the shares of stock of the Corporation or (b) a majority of the remaining members of the Board, even though such majority is less than a quorum, and each director so elected shall hold office until the expiration of the term of office of the director whom such director has replaced or until such director's successor is elected and qualified. Directors may be removed solely by the affirmative vote of the holders of at least sixty-six and two-thirds percent (66 2/3%) of the shares of stock of the Corporation who are present in person or represented by proxy at a meeting at which a quorum is present and who are entitled to vote on the subject matter.

3.4 <u>Compensation</u>. Directors may be allowed such compensation for their services as directors as may from time to time be fixed by resolution of the Board.

ARTICLE FOUR – MEETINGS OF THE BOARD OF DIRECTORS

4.1 <u>Regular Meetings</u>. Regular meetings of the Board may be held at such places within or without the State of Georgia and at such times as the Board may from time to time determine. Regular meetings of the Board may be held without notice given pursuant to Section 6.1 of these Bylaws if the date, times and places thereof are adopted by written consent of all directors. Any business may be transacted at any regular meeting.

4.2 <u>Special Meetings</u>. Special meetings of the Board may be held at such places within or without the State of Georgia. Special meetings of the Board may be called at any time by the Chairman of the Board or the President. Unless waived as contemplated in Section 6.2 of these Bylaws, the Chairman of the Board or the President or Secretary of the Corporation or any director thereof shall give at least one (1) day's notice given pursuant to Section 6.1 of these Bylaws to each director of each special meeting stating the date, time, and place of the meeting.

4.3 <u>Meetings by Conference Telephone or Similar Communications</u>. Unless otherwise restricted by the Articles or these Bylaws, the directors may participate in a meeting of the Board by means of conference telephone or similar communications whereby all persons participating in the meeting can hear each other and participation in a meeting in such manner will constitute presence in person at such meeting.

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4.4 <u>Quorum; Vote Required for Action</u>. At all meetings of the Board, the presence of a majority of the authorized number of directors shall be necessary and sufficient to constitute a quorum for the transaction of business. Except as may be otherwise specifically provided by law, the Articles or these Bylaws, all resolutions adopted and all business transacted by the Board shall require the affirmative vote of a majority of the directors present at the meeting at which a quorum is present. In the absence of a quorum, a majority of the directors present at any meeting may adjourn the meeting from time to time until a quorum is present. Notice of any adjourned meeting need only be given by announcement at the meeting at which the adjournment is taken.

4.5 <u>Organization</u>. Meetings of the Board shall be presided over by the Chairman of the Board, if any, or in the Chairman of the Board's absence, by a chair chosen at the meeting. The Secretary shall act as secretary of the meeting, but in the Secretary's absence the chair of the meeting may appoint any person to act as secretary of the meeting.

4.6 <u>Action by Directors Without a Meeting</u>. Unless otherwise restricted by the Articles or these Bylaws, any action required or permitted to be taken at any meeting of the Board may be taken without a meeting if a written consent thereto shall be signed by all of the directors, and such written consent is filed with the minutes of the proceedings of the Board. Such consent shall have the same force and effect as a unanimous vote of the Board.

ARTICLE FIVE – COMMITTEES

5.1 <u>Committees</u>. The Board may designate one (1) or more committees of the Board. Each committee will consist of one (1) or more directors of the Corporation, unless a greater number is required by any applicable law, rule, regulation or listing standard, and it shall have such name or names and shall have any and may exercise such powers of the Board in the management of the business and affairs of the Corporation, except as otherwise provided by law, as may be determined from time to time by resolution adopted by the Board.

5.2 <u>Action by Committees</u>. Unless the Board otherwise provides, each committee designated by the Board may make, alter and repeal rules for the conduct of its business. In the absence of such rules, each committee shall conduct its business in the same manner as the Board conducts its business pursuant to Article Four of these Bylaws.

5.3 <u>Removal and Vacancies</u>. The Board shall have power at any time to remove any member of any committee, with or without cause, and to fill vacancies in or dissolve any such committee, except as would violate any applicable law, rule, regulation or listing standard.

ARTICLE SIX — NOTICES

6.1 <u>Procedure</u>. Except as otherwise specifically provided in these Bylaws, whenever under the provisions of these Bylaws notice is required to be given to any shareholder, director or officer, it shall not be construed to mean personal notice, but such notice may be given by personal notice, by e-mail or by mail by depositing the same in the post office or letter box in a postage prepaid sealed wrapper, addressed to such shareholder, director or officer at such address as appears on the books of the Corporation, and such notice shall be deemed to be given at the time when the same shall be thus sent or mailed.

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6.2 <u>Waiver</u>. Except as otherwise provided in these Bylaws, when any notice is required to be given by law, by the Articles or by these Bylaws, a written waiver thereof, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. In the case of a shareholder, such waiver of notice may be signed by the shareholder's attorney or proxy duly appointed in writing.

ARTICLE SEVEN — OFFICERS

7.1 <u>Officers</u>. The officers of the Corporation shall consist of a Chairman of the Board, a Chief Executive Officer, a President, a Treasurer, and a Secretary and may include one (1) or more Vice Presidents, one (1) or more Assistant Treasurers and one (1) or more Assistant Secretaries, each of whom shall be appointed by the Board. The Board may elect other officers as it may deem advisable, and may further identify or describe the duties of any of its officers of the Corporation. Officers of the Corporation need not be members of the Board. Any number of offices may be held by the same person.

7.2 <u>Election and Term</u>. All officers shall be elected by the Board and shall serve at the pleasure of the Board until their successors have been elected and have qualified or until their earlier death, resignation, removal, retirement or disqualification.

7.3 <u>Resignation; Removal; Vacancies</u>. Any officer may resign at any time upon written notice to the Chairman of the Board, the Chief Executive Officer, the President or the Secretary of the Corporation. Any officer may be removed at any time with or without cause by the Board, but such removal will be without prejudice to the contract rights, if any, of the person so removed. Any officer, however elected or appointed, may be removed at any time with or without cause by the affirmative vote of the Board. Vacancy in any office arising from any cause may be filled by the Board at any regular or special meeting.

7.4 <u>Powers and Duties of Officers</u>. The officers of the Corporation shall have such powers and duties in the management of the Corporation as may be prescribed in a resolution by the Board and, to the extent not so provided, as generally pertain to their respective offices, subject to the control of the Board.

7.5 <u>Other Agents</u>. The Board from time to time may also appoint such other agents for the Corporation as the Board may deem necessary or advisable. Each such agent will serve at the pleasure of the Board or for such period as the Board may specify, and will exercise such powers, have such titles, and perform such duties as may be determined from time to time by the Board or by an officer empowered to make such determinations.

ARTICLE EIGHT – SHARES

8.1 <u>Certificates</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The interest of each shareholder shall be evidenced by a certificate or certificates representing shares of the Corporation which shall be in such form as the Board may from time to time adopt, or the Board may authorize the issuance of uncertificated shares that may be evidenced by a book-entry system maintained by the registrar of such stock, or a combination of both. Any such authorization shall not affect shares already represented by a certificate until the certificate is surrendered to the Corporation. Except as expressly provided by law, there shall be no difference in the rights and obligations of shareholders based on whether or not their shares are represented by certificates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) To the extent that shares are represented by certificates, each certificate shall exhibit the holder's name, the number of shares and class of shares and series, if any, represented thereby, the name of the Corporation, a statement that the Corporation is organized under the laws of the State of Georgia, and the par value of each share or a statement that the shares are without par value. Each certificate shall be signed by the President or a Vice President and by the Secretary or an Assistant Secretary of the Corporation; provided, however, that where such certificate is signed by a transfer agent, or registered by a registrar, the signature of any such officer may be facsimile. In case any officer who has signed or whose facsimile signature has been used on a certificate has ceased to be an officer before the certificate has been delivered, such certificate may, nonetheless, be adopted and issued and delivered by the Corporation as though the officer who signed such certificate or certificates, or whose facsimile signature or signatures shall have been used thereon, had not ceased to be such officer of the Corporation.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In the case of uncertificated shares, within a reasonable time after the issuance or transfer thereof, the Corporation shall send the shareholder a written information statement containing: (i) the name of the Corporation and a statement that the Corporation is organized under the laws of the State of Georgia; (ii) the name of the person to whom the uncertificated shares have been issued or transferred; (iii) the number and class of shares, and the designation of the series, if any, to which the information statement relates; and (iv) if applicable, a statement as to the existence of any restrictions on transfer or registration of transfer of the shares.

8.2 <u>Transfer of Shares</u>. The transfer of shares shall be made on the books of the Corporation only by the person named in the certificate (or in the case of uncertificated shares, the person named in the stock records of the Corporation), or by an attorney lawfully constituted in writing and, in the case of certificated shares, upon the surrender of the certificate therefor, which shall be cancelled before a new certificate shall be issued or, in the case of a certificate alleged to have been lost, stolen, or destroyed, upon compliance with the provisions of Section 8.4 of these Bylaws.

8.3 <u>Equitable Share Interest</u>. Registered shareholders only shall be entitled to be treated by the Corporation as the holders in fact of the shares standing in their respective names, and the Corporation shall not be bound to recognize any equitable or other claim to or interest in any share on the part of any other person, whether or not it shall have express or other notice thereof, except as expressly provided by the laws of the State of Georgia.

8.4 <u>Lost, Stolen or Destroyed Certificates</u>. In the case of loss, theft or destruction of any share certificate, another certificate or uncertificated shares may be issued in its place upon proof of such loss, theft or destruction, and if the Corporation shall require, upon the giving of a satisfactory bond of indemnity to the Corporation and/or to the transfer agent and registrar of such share certificate.

8.5 <u>Regulations</u>. The Board shall have power and authority to make all rules and regulations as it may deem expedient, concerning the issue, transfer, conversion, and registration of share certificates of the Corporation, not inconsistent with the laws of the State of Georgia, the Articles, and these Bylaws; and the Board may appoint one (1) or more transfer agents and one (1) or more registrars.

8.6 <u>Declaration of Dividends</u>. Dividends on the capital stock of the Corporation, subject to the provisions of the Articles and applicable law, if any, may be declared by the Board pursuant to law at any regular or special meeting. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the Articles and applicable law.

8.7 <u>Authority to Ratify</u>. In accordance with the Georgia Business Corporation Code, the Board may ratify any defective corporate act, including without limitation the authorization or issuance of shares of stock that were not properly authorized at the time of issuance, or any corporate act taken without proper authorization. Such ratification may be effected by resolution of the Board adopted at a meeting or by written consent, and shall include (a) a description of the defective corporate act, (b) the date on which the defective corporate act was taken or purportedly taken, (c) a statement that the Board ratifies the defective corporate act, and (d) if shareholder approval is required by law or these Bylaws, a statement that the matter will be submitted to the shareholders for approval.

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8.8 <u>Shareholder Approval</u>. If shareholder approval of the ratification of a defective corporate act is required by law, the Articles of Incorporation, or these Bylaws, notice of the meeting at which such ratification will be considered shall describe the defective corporate act to be ratified, the date on which it was taken or purportedly taken, and the effect of ratification. Such ratification shall require the affirmative vote of the holders of a majority of the shares of stock of the Corporation entitled to vote thereon, unless a greater vote is required by law, the Articles of Incorporation, or these Bylaws for the type of action being ratified.

8.9 <u>Effect of Ratification</u>. Upon ratification of a defective corporate act in accordance with these Bylaws and the Georgia Business Corporation Code, the defective corporate act shall be deemed to have been authorized, approved and taken at the time originally purported, and all shares of stock issued as a result of such defective corporate act shall be deemed validly issued, fully paid, and non-assessable as of the date of such original issuance.

8.10 <u>Filing Requirements</u>. If a defective corporate act that is ratified under these Bylaws relates to the filing of a document with the Georgia Secretary of State (including amendments to the Articles of Incorporation), the Corporation shall promptly file with the Georgia Secretary of State a certificate of correction or such other document as may be required by the Georgia Business Corporation Code to give effect to the ratification.

ARTICLE NINE – LIMITATION OF LIABILITY AND INDEMNIFICATION

9.1 <u>Limitation of Liability</u>. No person will be liable to the Corporation or the shareholders for any loss, damage, liability or expense suffered by the Corporation on account of any action taken or omitted to be taken by such person as a director or officer of the Corporation or of any "Other Enterprise," which may include, without limitation, any other corporation, partnership, limited liability company, joint venture, trust or employee benefit plan, for which such person serves or has served as a director or officer at the request of the Corporation, if such person (a) exercised the same degree of care and skill as a prudent person would have exercised under the circumstances in the conduct of his or her own affairs, or (b) took or omitted to take such action in reliance upon advice of counsel for the Corporation, or for such Other Enterprise, or upon statements made or information furnished by directors, officers, employees or agents of the Corporation, or of such Other Enterprise, which such person had no reasonable grounds to disbelieve.

9.2 <u>Indemnification</u>. In the event indemnification is requested by any person, their heirs, executors, or administrators, such person, their heirs, executors, or administrators, shall be indemnified or reimbursed by the Corporation to the fullest extent of the Georgia Business Corporation Code for reasonable expenses actually incurred in connection with any action, suit or proceeding, civil or criminal, to which such person shall be made a party by reason of the fact that such person is or was a director, trustee, officer, employee, or agent of the Corporation, or that such person is or was serving, at the request of the Corporation, as a director, trustee, officer, employee, or agent of any Other Enterprise. No person shall be so indemnified or reimbursed in relation to any matter in such action, suit, or proceeding as to which such person shall finally be adjudged to have been guilty of or liable for gross negligence, willful misconduct, or criminal acts in the performance of their duties to the Corporation, or to such Other Enterprise. Provided further, no person shall be so indemnified or reimbursed in relation to any matter in such action, suit, or proceeding which has been the subject of a compromise settlement, except with the approval of (a) a court of competent jurisdiction, (b) the holders of record of a majority of the outstanding shares of capital stock of the Corporation, or (c) a majority of the members of the Board then holding office excluding the votes of any directors who are parties to the same or substantially the same action, suit, or proceeding.

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9.3 <u>Payment of Expenses in Advance</u>. Expenses incurred in defending any action, suit, or proceeding referred to above shall be paid by the Corporation in advance of the final disposition of such action, suit, or proceeding upon delivery to the Corporation of both an affirmation of good faith and an undertaking by or on behalf of the director, trustee, officer, employee or agent to repay such amount unless it shall ultimately be determined that he or she is entitled to be indemnified by the Corporation as provided above. Such advancement of expenses shall be automatic and shall not require authorization by the Board in any specific case.

9.4 <u>Insurance</u>. The Corporation shall purchase and maintain insurance on behalf of any person who is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of any Other Enterprise, against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the Corporation would have the power to indemnify such person against such liability under this Article Nine.

9.5 <u>Amendment or Repeal</u>. Any right to indemnification or to advancement of expenses of any person arising hereunder shall not be eliminated or impaired by an amendment to or repeal of these Bylaws after the occurrence of the act or omission that is the subject of the civil, criminal, administrative or investigative action, suit or proceeding for which indemnification or advancement of expenses is sought.

9.6 <u>Rights Not Exclusive</u>. The foregoing rights of indemnification or reimbursement shall not be exclusive of other rights to which the persons referred to above or their heirs, executors, or administrators, may be entitled as a matter of law, and the Corporation may indemnify such persons to the extent permitted by the Financial Institutions Code of Georgia and the Georgia Business Corporation Code, as such laws may be amended from time to time.

ARTICLE TEN — MISCELLANEOUS

10.1 <u>Fiscal Year</u>. The Board will have power to fix and from time to time change the fiscal year of the Corporation. In the absence of action by the Board, the fiscal year of the Corporation will end each year on December 31 until such time, if any, as the fiscal year is changed by the Board.

10.2 <u>Corporate Seal</u>. The Corporation may have a corporate seal in such form as may be approved from time to time by the Board.

10.3 <u>Inspection of Books and Records</u>. The Board shall determine whether and to what extent the accounts and books of the Corporation, or any of them, other than the share records, shall be open to the inspection of shareholders, and no shareholder shall have any right to inspect any account or books or document of the Corporation except as conferred by law or by resolution of the shareholders or the Board. Without prior approval of the Board in their discretion, the right of inspection set forth in Section 14-2-1602(c) of the Georgia Business Corporation Code shall not be available to any shareholder owning two (2) percent or less of the shares outstanding.

10.4 <u>Annual Statements</u>. Not later than four (4) months after the close of each fiscal year, and in any case prior to the next annual meeting of shareholders, the Corporation shall prepare (a) a balance sheet showing in reasonable detail the financial condition of the Corporation as of the close of its fiscal year, and (b) a profit and loss statement showing the results of its operations during its fiscal year. Upon request in writing or by electronic transmission, the Corporation promptly shall mail or deliver to any shareholder of record a copy of the most recent such balance sheet and profit and loss statement.

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ARTICLE ELEVEN — AMENDMENTS

11.1 <u>Power to Amend Bylaws</u>. Alterations, amendments, or repeals of the Bylaws may be made by the shareholders, if the notice of such meeting contains a statement of the proposed alteration, amendment, or repeal, or by the Board by a majority vote of all directors then holding office at any regular or special meeting. Any bylaw that is to be altered, amended, or repealed by the shareholders of the Corporation shall receive the affirmative vote of the holders of at least sixty-six and two-thirds percent (66 2/3%) of the shares of stock of the Corporation who are present in person or represented by proxy at a meeting at which a quorum is present and who are entitled to vote on the subject matter.

ARTICLE TWELVE — RESTRICTIONS ON CERTAIN BUSINESS<br> COMBINATIONS WITH INTERESTED SHAREHOLDERS

12.1 <u>Governing Authority</u>. The Corporation shall be governed by all of the requirements of Article 11A of the Georgia Business Corporation Code (Sections 14-2-1131, et seq).

12.2 <u>Irrevocability</u>. This Article Twelve of these Bylaws shall be irrevocable except as provided in Section 14-2-1133(b) of the Georgia Business Corporation Code.

ARTICLE THIRTEEN — EXCLUSIVE FORUM FOR CERTAIN ACTIONS

13.1 <u>Forum</u>. Unless the Corporation consents in writing to an alternative forum, the state courts of the State of Georgia or, if no state court located within the State of Georgia has subject matter jurisdiction, the federal district court for the Northern District of Georgia, will be the exclusive forum for (a) any derivative action or proceeding brought on behalf of the Corporation, (b) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, or other employee of the Corporation to the Corporation or the Corporation's shareholders, (c) any action asserting a claim arising under any provision of the General Corporation Law of the State of Georgia, the Articles, or these Bylaws (in each case, as they may be amended from time to time), or (d) any action asserting a claim governed by the internal-affairs doctrine. Unless the Corporation consents in writing to an alternative forum, the federal district courts of the United States of America shall be, to the fullest extent permitted by applicable law, the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended. Any person or entity purchasing or otherwise acquiring any interest in any security of the Corporation will be deemed to have notice of and to have consented to the provisions of this Section 13.1.

## Exhibit 4.1

**Exhibit 4.1**

**[PORTIONS HEREIN IDENTIFIED BY [\*\*\*] HAVE BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE THE EXCLUDED INFORMATION IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.]**

**EXECUTION VERSION**

**REGISTRATION RIGHTS AGREEMENT**

This **REGISTRATION RIGHTS AGREEMENT** (this "**Agreement**"), dated as of March 26, 2026, is by and among QumulusAI, Inc., a Georgia corporation with offices located at 2146 Roswell Road, Suite 108-851, Marietta, GA 30062 (the "**Company**"), and the undersigned buyers (each, a "**Buyer**," and collectively, the "**Buyers**").

**<u>RECITALS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. In connection with the Securities Purchase Agreement by and among the parties hereto, dated as of March 26, 2026 (the "**Securities Purchase Agreement**"), the Company has agreed, upon the terms and subject to the conditions of the Securities Purchase Agreement, to issue and sell to each Buyer the Notes (as defined in the Securities Purchase Agreement) which will be convertible into Conversion Shares (as defined in the Securities Purchase Agreement) in accordance with the terms of the Notes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. To induce the Buyers to consummate the transactions contemplated by the Securities Purchase Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the "**1933 Act**"), and applicable state securities laws.

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

**NOW, THEREFORE,** in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and each of the Buyers hereby agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Definitions.</u> 

Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Securities Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) "**Business Day**" means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to "stay at home", "shelter-in-place", "non-essential employee" or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally are open for use by customers on such day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) "**Effective Date**" means the date that the applicable Registration Statement has been declared effective by the SEC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) "**Effectiveness Deadline**" means (i) with respect to the initial Registration Statement required to be filed pursuant to Section 2(a), the earlier of (x) the Public Company Date (as defined in the Securities Purchase Agreement), and (y) the earlier of the (A) 180<sup>th</sup> calendar day after the Initial Closing Date and (B) 2<sup>nd</sup> Business Day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that such Registration Statement will not be reviewed or will not be subject to further review and (ii) with respect to any additional Registration Statements that may be required to be filed by the Company pursuant to this Agreement, the earlier of the (A) 60<sup>th</sup> calendar day following the date on which the Company was required to file such additional Registration Statement (which in the case of the first additional Registration Statement required to be filed by the Company pursuant to this Agreement (the "**First Additional Registration Statement**"), shall be the 60<sup>th</sup> calendar day after the Public Listing Date) and (B) 2<sup>nd</sup> Business Day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that such Registration Statement will not be reviewed or will not be subject to further review.

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(d) "**Filing Deadline**" means (i) with respect to the initial Registration Statement required to be filed pursuant to Section 2(a), the 30<sup>th</sup> calendar day after the Initial Closing Date and (ii) with respect to any additional Registration Statements that may be required to be filed by the Company pursuant to this Agreement, the date on which the Company was required to file such additional Registration Statement pursuant to the terms of this Agreement (which in the case of the First Additional Registration Statement, shall be the 20<sup>th</sup> calendar day after the Public Listing Date).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) "**Initial Closing Date**" shall have the meaning set forth in the Securities Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) "**Investor**" means a Buyer or any transferee or assignee of any Registrable Securities or Notes, as applicable, to whom a Buyer assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9 and any transferee or assignee thereof to whom a transferee or assignee of any Registrable Securities or Notes, as applicable, assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) "**Person**" means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization or a government or any department or agency thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) "**register**," "**registered**," and "**registration**" refer to a registration effected by preparing and filing one or more Registration Statements in compliance with the 1933 Act and pursuant to Rule 415 and the declaration of effectiveness of such Registration Statement(s) by the SEC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) "**Registrable Securities**" means (i) the Conversion Shares, and (ii) any capital stock of the Company issued or issuable with respect to the Conversion Shares or the Notes, including, without limitation, (1) as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise and (2) stock of capital share of the Company into which the shares of Common Stock (as defined in the Notes) are converted or exchanged and shares of capital stock of a Successor Entity (as defined in the Notes) into which the shares of Common Stock are converted or exchanged, in each case, without regard to any limitations on conversion of the Notes.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) "**Registration Statement**" means a registration statement or registration statements of the Company filed under the 1933 Act covering Registrable Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) "**Required Holders**" shall have the meaning as set forth in the Securities Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) "**Required Registration Amount**" means, as of any time of determination (i) prior to the Public Listing Date, 300% of the maximum number of Initial Conversion Shares issuable upon conversion of the Initial Notes (assuming for purposes hereof that (x) the Initial Notes are convertible at the Conversion Price (as defined in the Notes) as of such time of determination, (y) interest on the Initial Notes shall accrue through the twenty four (24) month anniversary of the Initial Closing Date and will be converted into shares of Common Stock at the Conversion Price as of such time of determination, and (z) any such conversion shall not take into account any limitations on the conversion of the Initial Notes set forth in the Initial Notes, and (ii) on and after the Public Listing Date, 200% of the maximum number of Conversion Shares issuable upon conversion of the Notes then outstanding (assuming for purposes hereof that (x) the Notes are convertible at the Installment Conversion Price (as defined in the Notes) assuming an Installment Date (as defined in the Notes) as of such time of determination, (y) interest on the Notes shall accrue through the twenty four (24) month anniversary of the applicable Issuance Date (as defined in the Notes) and will be converted into shares of Common Stock at the Installment Conversion Price assuming an Installment Date as of such time of determination, and (z) any such conversion shall not take into account any limitations on the conversion of the Notes set forth in the Notes, in each case, all subject to adjustment as provided in Section 2(d) and/or Section 2(f).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) "**Rule 144**" means Rule 144 promulgated by the SEC under the 1933 Act, as such rule may be amended from time to time, or any other similar or successor rule or regulation of the SEC that may at any time permit the Investors to sell securities of the Company to the public without registration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) "**Rule 415**" means Rule 415 promulgated by the SEC under the 1933 Act, as such rule may be amended from time to time, or any other similar or successor rule or regulation of the SEC providing for offering securities on a continuous or delayed basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) "**SEC**" means the United States Securities and Exchange Commission or any successor thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Registration.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Mandatory Registration</u>. The Company shall prepare and, as soon as practicable, but in no event later than the Filing Deadline, file with the SEC an initial Registration Statement on Form S-3 covering the resale of all of the Registrable Securities, provided that such initial Registration Statement shall register for resale at least the number of shares of Common Stock equal to the Required Registration Amount as of the date such Registration Statement is initially filed with the SEC; provided further that if Form S-3 is unavailable for such a registration, the Company shall use such other form as is required by Section 2(c). Such initial Registration Statement, and each other Registration Statement required to be filed pursuant to the terms of this Agreement, shall contain (except if otherwise directed by the Required Holders) the "<u>Selling Shareholders</u>" and "<u>Plan of Distribution</u>" sections in substantially the form attached hereto as **Exhibit B**. The Company shall use its reasonable best efforts to have such initial Registration Statement, and each other Registration Statement required to be filed pursuant to the terms of this Agreement, declared effective by the SEC as soon as practicable, but in no event later than the applicable Effectiveness Deadline for such Registration Statement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Legal Counsel</u>. Subject to Section 5 hereof, Kelley Drye & Warren LLP, counsel solely to the lead investor ("**Legal Counsel**") shall review and comment on any Registration Statement, solely on behalf of the lead investor, pursuant to this Section 2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Ineligibility to Use Form S-3</u>. In the event that Form S-3 is not available for the registration of the resale of Registrable Securities hereunder, the Company shall (i) register the resale of the Registrable Securities on Form S-1 or another appropriate form reasonably acceptable to the Required Holders and (ii) undertake to register the resale of the Registrable Securities on Form S-3 as soon as such form is available, provided that the Company shall maintain the effectiveness of all Registration Statements then in effect until such time as a Registration Statement on Form S-3 covering the resale of all the Registrable Securities has been declared effective by the SEC and the prospectus contained therein is available for use.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Sufficient Number of Shares Registered</u>. In the event the number of shares available under any Registration Statement is insufficient to cover all of the Registrable Securities required to be covered by such Registration Statement or an Investor's allocated portion of the Registrable Securities pursuant to Section 2(h), the Company shall amend such Registration Statement (if permissible), or file with the SEC a new Registration Statement (on the short form available therefor, if applicable), or both, so as to cover at least the Required Registration Amount as of the Trading Day (as defined in the Notes) immediately preceding the date of the filing of such amendment or new Registration Statement, in each case, as soon as practicable, but in any event not later than fifteen (15) days after the necessity therefor arises (but taking account of any Staff position with respect to the date on which the Staff will permit such amendment to the Registration Statement and/or such new Registration Statement (as the case may be) to be filed with the SEC). The Company shall use its reasonable best efforts to cause such amendment to such Registration Statement and/or such new Registration Statement (as the case may be) to become effective as soon as practicable following the filing thereof with the SEC, but in no event later than the applicable Effectiveness Deadline for such Registration Statement. For purposes of the foregoing provision, the number of shares available under a Registration Statement shall be deemed "insufficient to cover all of the Registrable Securities" if at any time the number of shares of Common Stock available for resale under the applicable Registration Statement is less than the product determined by multiplying (i) the Required Registration Amount as of such time by (ii)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.90. The calculation set forth in the foregoing sentence shall be made without regard to any limitations on conversion, amortization and/or redemption of the Notes (and such calculation shall assume (A) that the Notes are then convertible in full into shares of Common Stock at the then prevailing Conversion Rate (as defined in the Notes) and (B) the initial outstanding principal amount of the Notes remains outstanding through the scheduled Maturity Date (as defined in the Notes) and no redemptions of the Notes occur prior to the scheduled Maturity Date).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Effect of Failure to File and Obtain and Maintain Effectiveness of any Registration</u> <u>Statement</u>. If (i) a Registration Statement covering the resale of all of the Registrable Securities

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required to be covered thereby (disregarding any reduction pursuant to Section 2(f)) and required to be filed by the Company pursuant to this Agreement is (A) not filed with the SEC on or before the Filing Deadline for such Registration Statement (a "**Filing Failure**") (it being understood that if the Company files a Registration Statement without affording each Investor and Legal Counsel the opportunity to review and comment on the same as required by Section 3(c) hereof, the Company shall be deemed to not have satisfied this clause (i)(A) and such event shall be deemed to be a Filing Failure) or (B) not declared effective by the SEC on or before the Effectiveness Deadline for such Registration Statement (an "**Effectiveness Failure**") (it being understood that if on the Business Day immediately following the Effective Date for such Registration Statement the Company shall not have filed a "final" prospectus for such Registration Statement with the SEC under Rule 424(b) in accordance with Section 3(b) (whether or not such a prospectus is technically required by such rule), the Company shall be deemed to not have satisfied this clause (i)(B) and such event shall be deemed to be an Effectiveness Failure), (ii) other than during an Allowable Grace Period (as defined below), on any day after the Effective Date of a Registration Statement sales of all of the Registrable Securities required to be included on such Registration Statement (disregarding any reduction pursuant to Section 2(f)) cannot be made pursuant to such Registration Statement (including, without limitation, because of a failure to keep such Registration Statement effective, a failure to disclose such information as is necessary for sales to be made pursuant to such Registration Statement, a suspension or delisting of (or a failure to timely list) the shares of Common Stock on the Principal Market (as defined in the Securities Purchase Agreement) or any other limitations imposed by the Principal Market, or a failure to register a sufficient number of shares of Common Stock or by reason of a stop order) or the prospectus contained therein is not available for use for any reason (a "**Maintenance Failure**"), or (iii) if a Registration Statement is not effective for any reason or the prospectus contained therein is not available for use for any reason, and either (x) the Company fails for any reason to satisfy the requirements of Rule 144(c)(1), including, without limitation, the failure to satisfy the current public information requirement under Rule 144(c) or (y) the Company has ever been an issuer described in Rule 144(i)(1)(i) or becomes such an issuer in the future, and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (a "**Current Public Information Failure**") as a result of which any of the Investors are unable to sell Registrable Securities without restriction under Rule 144 (including, without limitation, volume restrictions), then, as partial relief for the damages to any holder by reason of any such delay in, or reduction of, its ability to sell the underlying shares of Common Stock (which remedy shall not be exclusive of any other remedies available at law or in equity, including, without limitation, specific performance), the Company shall pay to each holder of Registrable Securities relating to such Registration Statement an amount in cash equal to one percent (1%) of such Investor's original principal amount stated in such Investor's Note on the Initial Closing Date on every thirty (30) day anniversary of (1) a Filing Failure until such Filing Failure is cured; (2) an Effectiveness Failure until such Effectiveness Failure is cured; (3) a Maintenance Failure until such Maintenance Failure is cured; and (4) a Current Public Information Failure until the earlier of (I) the date such Current Public Information Failure is cured and (II) such time that such public information is no longer required pursuant to Rule 144 (in each case, prorated for periods totaling less than thirty (30) days). The payments to which a holder of Registrable Securities shall be entitled pursuant to this Section 2(e) are referred to herein as "**Registration Delay Payments**." Following the initial Registration Delay Payment for any particular event or failure (which shall be paid on the date of such event or failure, as set forth above), without limiting the foregoing, if an event or failure giving rise to the Registration

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Delay Payments is cured prior to any thirty (30) day anniversary of such event or failure, then such Registration Delay Payment shall be made on the third (3<sup>rd</sup>) Business Day after such cure. In the event the Company fails to make Registration Delay Payments in a timely manner in accordance with the foregoing, such Registration Delay Payments shall bear interest at the rate of one percent (1%) per month (prorated for partial months) until paid in full. Notwithstanding the foregoing, no Registration Delay Payments shall be owed to an Investor (other than with respect to a Maintenance Failure resulting from a suspension or delisting of (or a failure to timely list) the shares of Common Stock on the Principal Market) with respect to any period during which all of such Investor's Registrable Securities may be sold by such Investor without restriction under Rule 144 (including, without limitation, volume restrictions) and without the need for current public information required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Offering</u>. Notwithstanding anything to the contrary contained in this Agreement, but subject to the payment of the Registration Delay Payments pursuant to Section 2(e), in the event the staff of the SEC (the "**Staff**") or the SEC seeks to characterize any offering pursuant to a Registration Statement filed pursuant to this Agreement as constituting an offering of securities by, or on behalf of, the Company, or in any other manner, such that the Staff or the SEC do not permit such Registration Statement to become effective and used for resales in a manner that does not constitute such an offering and that permits the continuous resale at the market by the Investors participating therein (or as otherwise may be acceptable to each Investor) without being named therein as an "underwriter," then the Company shall reduce the number of shares to be included in such Registration Statement by all Investors until such time as the Staff and the SEC shall so permit such Registration Statement to become effective as aforesaid. In making such reduction, the Company shall reduce the number of shares to be included by all Investors on a pro rata basis (based upon the number of Registrable Securities otherwise required to be included for each Investor) unless the inclusion of shares by a particular Investor or a particular set of Investors are resulting in the Staff or the SEC's "by or on behalf of the Company" offering position, in which event the shares held by such Investor or set of Investors shall be the only shares subject to reduction (and if by a set of Investors on a pro rata basis by such Investors or on such other basis as would result in the exclusion of the least number of shares by all such Investors); provided, that, with respect to such pro rata portion allocated to any Investor, such Investor may elect the allocation of such pro rata portion among the Registrable Securities of such Investor. In addition, in the event that the Staff or the SEC requires any Investor seeking to sell securities under a Registration Statement filed pursuant to this Agreement to be specifically identified as an "underwriter" in order to permit such Registration Statement to become effective, and such Investor does not consent to being so named as an underwriter in such Registration Statement, then, in each such case, the Company shall reduce the total number of Registrable Securities to be registered on behalf of such Investor, until such time as the Staff or the SEC does not require such identification or until such Investor accepts such identification and the manner thereof. Any reduction pursuant to this paragraph will first reduce all Registrable Securities other than those issued pursuant to the Securities Purchase Agreement. In the event of any reduction in Registrable Securities pursuant to this paragraph, an affected Investor shall have the right to require, upon delivery of a written request to the Company signed by such Investor, the Company to file a registration statement within twenty (20) days of such request (subject to any restrictions imposed by Rule 415 or required by the Staff or the SEC) for resale by such Investor in a manner acceptable to such Investor, and the Company shall following such request cause to be and keep effective such registration statement in the same manner as otherwise contemplated in this

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Agreement for registration statements hereunder, in each case until such time as: (i) all Registrable Securities held by such Investor have been registered and sold pursuant to an effective Registration Statement in a manner acceptable to such Investor or (ii) all Registrable Securities may be resold by such Investor without restriction (including, without limitation, volume limitations) pursuant to Rule 144 (taking account of any Staff position with respect to "affiliate" status) and without the need for current public information required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable) or (iii) such Investor agrees to be named as an underwriter in any such Registration Statement in a manner acceptable to such Investor as to all Registrable Securities held by such Investor and that have not theretofore been included in a Registration Statement under this Agreement (it being understood that the special demand right under this sentence may be exercised by an Investor multiple times and with respect to limited amounts of Registrable Securities in order to permit the resale thereof by such Investor as contemplated above).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Piggyback Registrations</u>. Without limiting any obligation of the Company hereunder or under the Securities Purchase Agreement, if there is not an effective Registration Statement covering all of the Registrable Securities or the prospectus contained therein is not available for use and the Company shall determine to prepare and file with the SEC a registration statement or offering statement relating to an offering for its own account or the account of others under the 1933 Act of any of its equity securities (other than on Form S-4 or Form S-8 (each as promulgated under the 1933 Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with the Company's stock option or other employee benefit plans), then the Company shall deliver to each Investor a written notice of such determination and, if within fifteen (15) days after the date of the delivery of such notice, any such Investor shall so request in writing, the Company shall include in such registration statement or offering statement all or any part of such Registrable Securities such Investor requests to be registered; provided, however, the Company shall not be required to register any Registrable Securities pursuant to this Section 2(g) that are eligible for resale pursuant to Rule 144 without restriction (including, without limitation, volume restrictions) and without the need for current public information required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable) or that are the subject of a then-effective Registration Statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Allocation of Registrable Securities</u>. The initial number of Registrable Securities included in any Registration Statement and any increase in the number of Registrable Securities included therein shall be allocated pro rata among the Investors based on the number of Registrable Securities held by each Investor at the time such Registration Statement covering such initial number of Registrable Securities or increase thereof is declared effective by the SEC. In the event that an Investor sells or otherwise transfers any of such Investor's Registrable Securities, each transferee or assignee (as the case may be) that becomes an Investor shall be allocated a pro rata portion of the then-remaining number of Registrable Securities included in such Registration Statement for such transferor or assignee (as the case may be). Any shares of Common Stock included in a Registration Statement and which remain allocated to any Person which ceases to hold any Registrable Securities covered by such Registration Statement shall be allocated to the remaining Investors, pro rata based on the number of Registrable Securities then held by such Investors which are covered by such Registration Statement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>No Inclusion of Other Securities</u>. The Company shall in no event include any securities other than Registrable Securities on any Registration Statement filed in accordance herewith without the prior written consent of the Required Holders. Until the Applicable Date (as defined in the Securities Purchase Agreement), the Company shall not enter into any agreement providing any registration rights to any of its security holders, except as otherwise permitted under the Securities Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Related Obligations.</u> 

The Company shall use its reasonable best efforts to effect the registration of the Registrable Securities in accordance with the intended method of disposition thereof, and, pursuant thereto, the Company shall have the following obligations:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company shall promptly prepare and file with the SEC a Registration Statement with respect to all the Registrable Securities (but in no event later than the applicable Filing Deadline) and use its reasonable best efforts to cause such Registration Statement to become effective as soon as practicable after such filing (but in no event later than the Effectiveness Deadline). Subject to Allowable Grace Periods, the Company shall keep each Registration Statement effective (and the prospectus contained therein available for use) pursuant to Rule 415 for resales by the Investors on a delayed or continuous basis at then-prevailing market prices (and not fixed prices) at all times until the earlier of (i) the date as of which all of the Investors may sell all of the Registrable Securities required to be covered by such Registration Statement (disregarding any reduction pursuant to Section 2(f)) without restriction pursuant to Rule 144 (including, without limitation, volume restrictions) and without the need for current public information required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable) or (ii) the date on which the Investors shall have sold all of the Registrable Securities covered by such Registration Statement (the "**Registration Period**"). Notwithstanding anything to the contrary contained in this Agreement, the Company shall ensure that, when filed and at all times while effective, each Registration Statement (including, without limitation, all amendments and supplements thereto) and the prospectus (including, without limitation, all amendments and supplements thereto) used in connection with such Registration Statement (1) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein (in the case of prospectuses, in the light of the circumstances in which they were made) not misleading and (2) will disclose (whether directly or through incorporation by reference to other SEC filings to the extent permitted) all material information regarding the Company and its securities. The Company shall submit to the SEC, within one (1) Business Day after the later of the date that (i) the Company learns that no review of a particular Registration Statement will be made by the Staff or that the Staff has no further comments on a particular Registration Statement (as the case may be) and (ii) Legal Counsel has been afforded a reasonable opportunity to review and comment pursuant to Section 3(c) (which consent shall be immediately sought), a request for acceleration of effectiveness of such Registration Statement to a time and date not later than twenty-four (24) hours after the submission of such request. The Company shall respond in writing to comments made by the SEC in respect of a Registration Statement as soon as practicable, but in no event later than fifteen (15) days after the receipt of comments by or notice from the SEC that an amendment is required in order for a Registration Statement to be declared effective.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Subject to Section 3(r) of this Agreement, the Company shall prepare and file with the SEC such amendments (including, without limitation, post-effective amendments) and supplements to each Registration Statement and the prospectus used in connection with each such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be necessary to keep each such Registration Statement effective at all times during the Registration Period for such Registration Statement, and, during such period, comply with the provisions of the 1933 Act with respect to the disposition of all Registrable Securities of the Company required to be covered by such Registration Statement until such time as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in such Registration Statement; provided, however, by 8:30 a.m. (New York time) on the Business Day immediately following each Effective Date, the Company shall file with the SEC in accordance with Rule 424(b) under the 1933 Act the final prospectus to be used in connection with sales pursuant to the applicable Registration Statement (whether or not such a prospectus is technically required by such rule). In the case of amendments and supplements to any Registration Statement which are required to be filed pursuant to this Agreement (including, without limitation, pursuant to this Section 3(b)) by reason of the Company filing a report on Form 8-K, Form 10-Q or Form 10-K or any analogous report under the Securities Exchange Act of 1934, as amended (the "**1934 Act**"), the Company shall, if permitted under the applicable rules and regulations of the SEC, have incorporated such report by reference into such Registration Statement, if applicable, or shall file such amendments or supplements with the SEC on the same day on which the 1934 Act report is filed which created the requirement for the Company to amend or supplement such Registration Statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Company shall (A) permit Legal Counsel and legal counsel for each other Investor to review and comment upon (i) each Registration Statement at least five (5) Business Days prior to its filing with the SEC and (ii) all amendments and supplements to each Registration Statement (including, without limitation, the prospectus contained therein) (except for Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any similar or successor reports) within a reasonable number of days prior to their filing with the SEC, and (B) consider in good faith any timely comments of Legal Counsel or any legal counsel for any other Investor. The Company shall not be required to delay any Registration Statement filing if comments are not received from Legal Counsel within five (5) Business Days, and any failure to provide comments within such period shall be deemed to be no objection. The Company shall not submit a request for acceleration of the effectiveness of a Registration Statement or any amendment or supplement thereto or to any prospectus contained therein without first providing Legal Counsel a reasonable opportunity to review and comment. The Company shall promptly furnish to Legal Counsel and legal counsel for each other Investor, without charge, (i) copies of any correspondence from the SEC or the Staff to the Company or its representatives relating to each Registration Statement, provided that such correspondence shall not contain any material, non-public information regarding the Company or any of its Subsidiaries (as defined in the Securities Purchase Agreement), (ii) after the same is prepared and filed with the SEC, one (1) copy of each Registration Statement and any amendment(s) and supplement(s) thereto, including, without limitation, financial statements and schedules, all documents incorporated therein by reference, if requested by an Investor, and all exhibits and (iii) upon the effectiveness of each Registration Statement, one (1) copy of the prospectus included in such Registration Statement and all amendments and supplements thereto. The Company shall reasonably cooperate with Legal Counsel and legal counsel for each other Investor in performing the Company's obligations pursuant to this Section 3.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Company shall promptly furnish to each Investor whose Registrable Securities are included in any Registration Statement, without charge, (i) after the same is prepared and filed with the SEC, at least one (1) copy of each Registration Statement and any amendment(s) and supplement(s) thereto, including, without limitation, financial statements and schedules, all documents incorporated therein by reference, if requested by an Investor, all exhibits and each preliminary prospectus, (ii) upon the effectiveness of each Registration Statement, ten (10) copies of the prospectus included in such Registration Statement and all amendments and supplements thereto (or such other number of copies as such Investor may reasonably request from time to time) and (iii) such other documents, including, without limitation, copies of any preliminary or final prospectus, as such Investor may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities owned by such Investor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Company shall use its reasonable best efforts to (i) register and qualify, unless an exemption from registration and qualification applies, the resale by Investors of the Registrable Securities covered by a Registration Statement under such other securities or "blue sky" laws of all applicable jurisdictions in the United States, (ii) prepare and file in those jurisdictions, such amendments (including, without limitation, post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(e), (y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction. The Company shall promptly notify Legal Counsel, legal counsel for each other Investor and each Investor who holds Registrable Securities of the receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable Securities for sale under the securities or "blue sky" laws of any jurisdiction in the United States or its receipt of actual notice of the initiation or threatening of any proceeding for such purpose.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Company shall notify Legal Counsel, legal counsel for each other Investor and each Investor in writing of the happening of any event, as promptly as practicable after becoming aware of such event, as a result of which the prospectus included in a Registration Statement, as then in effect, may include an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (provided that in no event shall such notice contain any material, non-public information regarding the Company or any of its Subsidiaries), and, subject to Section 3(r), promptly prepare a supplement or amendment to such Registration Statement and such prospectus contained therein to correct such untrue statement or omission and deliver ten (10) copies of such supplement or amendment to Legal Counsel, legal counsel for each other Investor and each Investor (or such other number of copies as Legal Counsel, legal counsel for each other Investor or such Investor may reasonably request). The Company shall also promptly notify Legal Counsel, legal counsel for each other Investor and each Investor in writing (i) when a prospectus or any prospectus supplement or post-effective amendment has been filed, when a Registration Statement or any post-effective amendment has become effective (notification of such effectiveness shall be delivered to Legal Counsel, legal counsel for each other Investor and each Investor by e-mail on the same day of such effectiveness and by overnight mail), and when the Company receives written notice from the SEC that a Registration Statement or any post-effective amendment will be reviewed by the SEC, (ii) of any request by the SEC for amendments or supplements to a Registration Statement or related prospectus or related information, (iii) of the Company's reasonable determination that a post-effective amendment to a Registration Statement would be appropriate; and (iv) of the receipt of any request by the SEC or any other federal or state governmental authority for any additional information relating to the Registration Statement or any amendment or supplement thereto or any related prospectus. The Company shall respond as promptly as practicable to any comments received from the SEC with respect to each Registration Statement or any amendment thereto (it being understood and agreed that the Company's response to any such comments shall be delivered to the SEC no later than fifteen (15) Business Days after the receipt thereof).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Company shall (i) use its reasonable best efforts to prevent the issuance of any stop order or other suspension of effectiveness of each Registration Statement or the use of any prospectus contained therein, or the suspension of the qualification, or the loss of an exemption from qualification, of any of the Registrable Securities for sale in any jurisdiction and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment and (ii) notify Legal Counsel, legal counsel for each other Investor and each Investor who holds Registrable Securities of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding for such purpose.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) If any Investor may be required under applicable securities law to be described in any Registration Statement as an underwriter and such Investor consents to so being named an underwriter, at the request of any Investor, the Company shall furnish to such Investor, on the date of the effectiveness of such Registration Statement and thereafter from time to time on such dates as an Investor may reasonably request (i) a letter, dated such date, from the Company's independent certified public accountants in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the Investors, and (ii) an opinion, dated as of such date, of counsel representing the Company for purposes of such Registration Statement, in form, scope and substance as is customarily given in an underwritten public offering, addressed to the Investors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) If any Investor may be required under applicable securities law to be described in any Registration Statement as an underwriter and such Investor consents to so being named an underwriter, upon the written request of such Investor, the Company shall make available for inspection by (i) such Investor, (ii) legal counsel for such Investor and (iii) one (1) firm of accountants or other agents retained by such Investor (collectively, the "**Inspectors**"), all pertinent financial and other records, and pertinent corporate documents and properties of the Company (collectively, the "**Records**"), as shall be reasonably deemed necessary by each Inspector, and cause the Company's officers, directors and employees to supply all information which any Inspector may reasonably request; provided, however, each Inspector shall agree in writing to hold in strict confidence and not to make any disclosure (except to such Investor) or use of any Record or other information which the Company's board of directors determines in good faith to be confidential, and of which determination the Inspectors are so notified, unless (1) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in any Registration Statement or is otherwise required under the 1933 Act, (2) the release of such Records is ordered pursuant to a final, non-appealable subpoena or order from a court or government body of competent jurisdiction, or (3) the information in such Records has been made generally available to the public other than by disclosure in violation of this Agreement or any other Transaction Document (as defined in the Securities Purchase Agreement). Such Investor agrees that it shall, upon learning that disclosure of such Records is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, the Records deemed confidential. Nothing herein (or in any other confidentiality agreement between the Company and such Investor, if any) shall be deemed to limit any Investor's ability to sell Registrable Securities in a manner which is otherwise consistent with applicable laws and regulations.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) The Company shall hold in confidence and not make any disclosure of information concerning an Investor provided to the Company unless (i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement or is otherwise required to be disclosed in such Registration Statement pursuant to the 1933 Act, (iii) the release of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such information has been made generally available to the public other than by disclosure in violation of this Agreement or any other Transaction Document. The Company agrees that it shall, upon learning that disclosure of such information concerning an Investor is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to such Investor and allow such Investor, at such Investor's expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Without limiting any obligation of the Company under the Securities Purchase Agreement, the Company shall use its reasonable best efforts either to (i) cause all of the Registrable Securities covered by each Registration Statement to be listed on each securities exchange on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted under the rules of such exchange,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) secure designation and quotation of all of the Registrable Securities covered by each Registration Statement on an Eligible Market (as defined in the Securities Purchase Agreement), or (iii) if, despite the Company's reasonable best efforts to satisfy the preceding clauses (i) or (ii) the Company is unsuccessful in satisfying the preceding clauses (i) or (ii), without limiting the generality of the foregoing, to use its reasonable best efforts to arrange for at least two market makers to register with the Financial Industry Regulatory Authority ("**FINRA**") as such with respect to such Registrable Securities. In addition, the Company shall cooperate with each Investor and any broker or dealer through which any such Investor proposes to sell its Registrable Securities in effecting a filing with FINRA pursuant to FINRA Rule 5110 as requested by such Investor. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 3(k).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) The Company shall cooperate with the Investors who hold Registrable Securities being offered and, to the extent applicable, facilitate the timely preparation and delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities to be offered pursuant to a Registration Statement and enable such certificates to be in such denominations or amounts (as the case may be) as the Investors may reasonably request from time to time and registered in such names as the Investors may request.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) If requested by an Investor, the Company shall as soon as practicable after receipt of notice from such Investor and subject to Section 3(r) hereof, (i) incorporate in a prospectus supplement or post-effective amendment such information as an Investor reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; (ii) make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii) supplement or make amendments to any Registration Statement or prospectus contained therein if reasonably requested by an Investor holding any Registrable Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) The Company shall use its reasonable best efforts to cause the Registrable Securities covered by a Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) The Company shall make generally available to its security holders as soon as practical, but not later than ninety (90) days after the close of the period covered thereby, an earnings statement (in form complying with, and in the manner provided by, the provisions of Rule 158 under the 1933 Act) covering a twelve-month period beginning not later than the first day of the Company's fiscal quarter next following the applicable Effective Date of each Registration Statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) The Company shall otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the SEC in connection with any registration hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) Within one (1) Business Day after a Registration Statement which covers Registrable Securities is declared effective by the SEC, the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities (with copies to the Investors whose Registrable Securities are included in such Registration Statement) confirmation that such Registration Statement has been declared effective by the SEC in the form attached hereto as **Exhibit A**.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) Notwithstanding anything to the contrary herein (but subject to the last sentence of this Section 3(r)), at any time after the Effective Date of a particular Registration Statement, the Company may delay the disclosure of material, non-public information concerning the Company or any of its Subsidiaries the disclosure of which at the time is not, in the good faith opinion of the board of directors of the Company, in the best interest of the Company and, in the opinion of counsel to the Company, otherwise required (a "**Grace Period**"), provided that the Company shall promptly notify the Investors in writing of the (i) existence of material, non-public information giving rise to a Grace Period (provided that in each such notice the Company shall not disclose the content of such material, non-public information to any of the Investors) and the date on which such Grace Period will begin and (ii) date on which such Grace Period ends, provided further that (I) no Grace Period shall exceed ten (10) consecutive days and during any three hundred sixty five (365) day period all such Grace Periods shall not exceed an aggregate of thirty (30) days, (II) the first day of any Grace Period must be at least five (5) Trading Days after the last day of any prior Grace Period and (III) no Grace Period may exist during the sixty (60) Trading Day period immediately following the Effective Date of such Registration Statement (provided that such sixty (60) Trading Day period shall be extended by the number of Trading Days during such period and any extension thereof contemplated by this proviso during which such Registration Statement is not effective or the prospectus contained therein is not available for use) (each, an "**Allowable Grace Period**"). For purposes of determining the length of a Grace Period above, such Grace Period shall begin on and include the date the Investors receive the notice referred to in clause (i) above and shall end on and include the later of the date the Investors receive the notice referred to in clause (ii) above and the date referred to in such notice. The provisions of Section 3(g) hereof shall not be applicable during the period of any Allowable Grace Period. Upon expiration of each Grace Period, the Company shall again be bound by the first sentence of Section 3(f) with respect to the information giving rise thereto unless such material, non-public information is no longer applicable. Notwithstanding anything to the contrary contained in this Section 3(r), the Company shall cause its transfer agent to deliver unlegended shares of Common Stock to a transferee of an Investor in accordance with the terms of the Securities Purchase Agreement in connection with any sale of Registrable Securities with respect to which such Investor has entered into a contract for sale, and delivered a copy of the prospectus included as part of the particular Registration Statement to the extent applicable, prior to such Investor's receipt of the notice of a Grace Period and for which the Investor has not yet settled.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) The Company shall take all other reasonable actions necessary to expedite and facilitate disposition by each Investors of its Registrable Securities pursuant to each Registration Statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) Neither the Company nor any Subsidiary or affiliate thereof shall identify any Investor as an underwriter in any public disclosure or filing with the SEC, the Principal Market or any Eligible Market and any Buyer being deemed an underwriter by the SEC shall not relieve the Company of any obligations it has under this Agreement or any other Transaction Document (as defined in the Securities Purchase Agreement); provided, however, that the foregoing shall not prohibit the Company from including the disclosure found in the "Plan of Distribution" section attached hereto as Exhibit B in the Registration Statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the Company or any of its Subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities, that would have the effect of impairing the rights granted to the Buyers in this Agreement or otherwise conflicts with the provisions hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Obligations of the Investors.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) At least five (5) Business Days prior to the first anticipated filing date of each Registration Statement, the Company shall notify each Investor in writing of the information the Company requires from each such Investor with respect to such Registration Statement. It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Registrable Securities of a particular Investor that such

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Investor shall furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it, as shall be reasonably required to effect and maintain the effectiveness of the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each Investor, by such Investor's acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of each Registration Statement hereunder, unless such Investor has notified the Company in writing of such Investor's election to exclude all of such Investor's Registrable Securities from such Registration Statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Each Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(g) or the first sentence of 3(f), such Investor will immediately discontinue disposition of Registrable Securities pursuant to any Registration Statement(s) covering such Registrable Securities until such Investor's receipt of the copies of the supplemented or amended prospectus contemplated by Section 3(g) or the first sentence of Section 3(f) or receipt of notice that no supplement or amendment is required. Notwithstanding anything to the contrary in this Section 4(c), the Company shall cause its transfer agent to deliver unlegended shares of Common Stock to a transferee of an Investor in accordance with the terms of the Securities Purchase Agreement in connection with any sale of Registrable Securities with respect to which such Investor has entered into a contract for sale prior to the Investor's receipt of a notice from the Company of the happening of any event of the kind described in Section 3(g) or the first sentence of Section 3(f) and for which such Investor has not yet settled.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Expenses of Registration.</u> 

All reasonable expenses, other than underwriting discounts and commissions, incurred in connection with registrations, filings or qualifications pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualifications fees, printers and accounting fees, FINRA filing fees (if any) and fees and disbursements of counsel for the Company shall be paid by the Company. The Company shall reimburse Legal Counsel for its fees and disbursements in connection with registration, filing or qualification pursuant to Sections 2 and 3 of this Agreement which amount shall be limited to $10,000 for each such registration, filing or qualification.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) To the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend each Investor and each of its directors, officers, shareholders, members, partners, employees, agents, advisors, representatives (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding the lack of such title or any other title) and each Person, if any, who controls such Investor within the meaning of the 1933 Act or the 1934 Act and each of the directors, officers, shareholders, members, partners, employees, agents, advisors, representatives (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding the lack of such title or any other title) of such controlling Persons (each, an "**Indemnified Person**"), against any losses, obligations, claims, damages, liabilities, contingencies, judgments, fines, penalties, charges, costs (including, without limitation, court costs, reasonable attorneys' fees and costs of defense and investigation), amounts paid in settlement or expenses, joint or several, (collectively, "**Claims**") incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative or other regulatory agency, body or the SEC, whether pending or threatened, whether or not an Indemnified Person is or may be a party thereto ("**Indemnified Damages**"), to which any of them may become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement or any post-effective amendment thereto or in any filing made in connection with the qualification of the offering under the securities or other "blue sky" laws of any jurisdiction in which Registrable Securities are offered ("**Blue Sky Filing**"), or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus if used prior to the effective date of such Registration Statement, or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances under which the statements therein were made, not misleading or (iii) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement or (iv) any violation of this Agreement (the matters in the foregoing clauses (i) through (iv) being, collectively, "**Violations**"). Subject to Section 6(c), the Company shall reimburse the Indemnified Persons, promptly as such expenses are incurred and are due and payable, for any legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim by an Indemnified Person arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by such Indemnified Person for such Indemnified Person expressly for use in connection with the preparation of such Registration Statement or any such amendment thereof or supplement thereto, if such prospectus was timely made available by the Company pursuant to Section 3(d); and (ii) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld or delayed. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the transfer of any of the Registrable Securities by any of the Investors pursuant to Section 9.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In connection with any Registration Statement in which an Investor is participating, such Investor agrees to severally and not jointly indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors, each of its officers who signs the Registration Statement and each Person, if any, who controls the Company within the meaning of the 1933 Act or the 1934 Act (each, an "**Indemnified Party**"), against any Claim or Indemnified Damages to which any of them may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or are based upon any Violation, in each case, to the extent, and only to the extent, that such

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Violation occurs in reliance upon and in conformity with written information furnished to the Company by such Investor expressly for use in connection with such Registration Statement; and, subject to Section 6(c) and the below provisos in this Section 6(b), such Investor will reimburse an Indemnified Party any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such Claim; provided, however, the indemnity agreement contained in this Section 6(b) and the agreement with respect to contribution contained in Section 7 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of such Investor, which consent shall not be unreasonably withheld or delayed, provided further that such Investor shall be liable under this Section 6(b) for only that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to such Investor as a result of the applicable sale of Registrable Securities pursuant to such Registration Statement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party and shall survive the transfer of any of the Registrable Securities by any of the Investors pursuant to Section 9.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Promptly after receipt by an Indemnified Person or Indemnified Party (as the case may be) under this Section 6 of notice of the commencement of any action or proceeding (including, without limitation, any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party (as the case may be) shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party (as the case may be); provided, however, an Indemnified Person or Indemnified Party (as the case may be) shall have the right to retain its own counsel with the fees and expenses of such counsel to be paid by the indemnifying party if: (i) the indemnifying party has agreed in writing to pay such fees and expenses; (ii) the indemnifying party shall have failed promptly to assume the defense of such Claim and to employ counsel reasonably satisfactory to such Indemnified Person or Indemnified Party (as the case may be) in any such Claim; or (iii) the named parties to any such Claim (including, without limitation, any impleaded parties) include both such Indemnified Person or Indemnified Party (as the case may be) and the indemnifying party, and such Indemnified Person or such Indemnified Party (as the case may be) shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnified Person or such Indemnified Party and the indemnifying party (in which case, if such Indemnified Person or such Indemnified Party (as the case may be) notifies the indemnifying party in writing that it elects to employ separate counsel at the expense of the indemnifying party, then the indemnifying party shall not have the right to assume the defense thereof and such counsel shall be at the expense of the indemnifying party), provided further that in the case of clause (iii) above the indemnifying party shall not be responsible for the reasonable fees and expenses of more than one (1) separate legal counsel for such Indemnified Person or Indemnified Party (as the case may be). The Indemnified Party or Indemnified Person (as the case may be) shall reasonably cooperate with the indemnifying party in connection with any negotiation or defense of any such action or Claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified Party or Indemnified Person (as the case may be) which relates to such action or Claim. The indemnifying party shall keep the Indemnified Party or Indemnified Person (as the case may be) reasonably apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its prior written consent; provided, however, the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent of the Indemnified Party or Indemnified Person (as the case may be), consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person (as the case may be) of a release from all liability in respect to such Claim or litigation, and such settlement shall not include any admission as to fault on the part of the Indemnified Party. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified Person (as the case may be) with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party (as the case may be) under this Section 6, except to the extent that the indemnifying party is materially and adversely prejudiced in its ability to defend such action.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or Indemnified Damages are incurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The indemnity and contribution agreements contained herein shall be in addition to (i) any cause of action or similar right of the Indemnified Party or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant to the law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Contribution.</u> 

To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however: (i) no contribution shall be made under circumstances where the maker would not have been liable for indemnification under the fault standards set forth in Section 6 of this Agreement, (ii) no Person involved in the sale of Registrable Securities which Person is guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) in connection with such sale shall be entitled to contribution from any Person involved in such sale of Registrable Securities who was not guilty of fraudulent misrepresentation; and (iii) contribution by any seller of Registrable Securities shall be limited in amount to the amount of net proceeds received by such seller from the applicable sale of such Registrable Securities pursuant to such Registration Statement. Notwithstanding the provisions of this Section 7, no Investor shall be required to contribute, in the aggregate, any amount in excess of the amount by which the net proceeds actually received by such Investor from the applicable sale of the Registrable Securities subject to the Claim exceeds the amount of any damages that such Investor has otherwise been required to pay, or would otherwise be required to pay under Section 6(b), by reason of such untrue or alleged untrue statement or omission or alleged omission.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Reports Under the 1934 Act.</u> 

With a view to making available to the Investors the benefits of Rule 144, the Company agrees to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) make and keep public information available, as those terms are understood and defined in Rule 144;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) file with the SEC in a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934 Act so long as the Company remains subject to such requirements (it being understood and agreed that nothing herein shall limit any obligations of the Company under the Securities Purchase Agreement) and the filing of such reports and other documents is required for the applicable provisions of Rule 144; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) furnish to each Investor so long as such Investor owns Registrable Securities, promptly upon request, (i) a written statement by the Company, if true, that it has complied with the reporting, submission and posting requirements of Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company with the SEC if such reports are not publicly available via EDGAR, and (iii) such other information as may be reasonably requested to permit the Investors to sell such securities pursuant to Rule 144 without registration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Assignment of Registration Rights.</u> 

All or any portion of the rights under this Agreement shall be automatically assignable by each Investor to any transferee or assignee (as the case may be) of all or any portion of such Investor's Registrable Securities or Notes if: (i) such Investor agrees in writing with such transferee or assignee (as the case may be) to assign all or any portion of such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such transfer or assignment (as the case may be); (ii) the Company is, within a reasonable time after such transfer or assignment (as the case may be), furnished with written notice of (a) the name and address of such transferee or assignee (as the case may be), and (b) the securities with respect to which such registration rights are being transferred or assigned (as the case may be); (iii) immediately following such transfer or assignment (as the case may be) the further disposition of such securities by such transferee or assignee (as the case may be) is restricted under the 1933 Act or applicable state securities laws if so required; (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence such transferee or assignee (as the case may be) agrees in writing with the Company to be bound by all of the provisions contained herein; (v) such transfer or assignment (as the case may be) shall have been made in accordance with the applicable requirements of the Securities Purchase Agreement and the Notes (as the case may be); and (vi) such transfer or assignment (as the case may be) shall have been conducted in accordance with all applicable federal and state securities laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>Amendment of Registration Rights.</u> 

Provisions of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Required Holders; provided that any such amendment or waiver that complies with the foregoing, but that disproportionately, materially and adversely affects the rights and obligations of any Investor relative to the comparable rights and obligations of the other Investors shall require the prior written consent of such adversely affected Investor. Any amendment or waiver effected in accordance with this Section 10 shall be binding upon each Investor and the Company, provided that no such amendment shall be effective to the extent that it (1) applies to less than all of the holders of Registrable Securities or (2) imposes any obligation or liability on any Investor without such Investor's prior written consent (which may be granted or withheld in such Investor's sole discretion). No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration (other than the reimbursement of legal fees) also is offered to all of the parties to this Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>Miscellaneous.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Solely for purposes of this Agreement, a Person is deemed to be a holder of Registrable Securities whenever such Person owns, or is deemed to own, of record such Registrable Securities. If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from such record owner of such Registrable Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by electronic mail (provided that such sent email is kept on file (whether electronically or otherwise) by the sending party and the sending party does not receive an automatically generated message from the recipient's email server that such e-mail could not be delivered to such recipient); or (iii) one (1) Business Day after deposit with an overnight courier service with next day delivery specified, in each case, properly addressed to the party to receive the same. The mailing addresses and e-mail addresses for such communications shall be:

If to the Company:

QumulusAI, Inc.

2146 Roswell Road

Suite 108-851

Marietta, GA 30062

Telephone: (770)-315-5837

Attention: Chief Executive Officer

E-Mail: patrick.gahan@qumulusai.com

With a copy (for informational purposes only) to:

Lucosky Brookman LLP

111 Broadway, Suite 807

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New York, New York 10006

Telephone: (732) 395-4400 \|

Attention: Joseph Lucosky, Esq.

E-Mail: jlucosky@lucbro.com

If to the Transfer Agent:

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, NY 10004-1561

Telephone: (212) 847-3260

Attention: Alwyn Burton

E-Mail: aburton@continentalstock.com

E-Mail: If to Legal Counsel:

Kelley Drye & Warren LLP 3 World Trade Center

175 Greenwich Street New York, NY 10007

Telephone: (212) 808-7540

Attention: Michael A. Adelstein, Esq.

E-mail: madelstein@kelleydrye.com

If to a Buyer, to its mailing address and/or email address set forth on the Schedule of Buyers attached to the Securities Purchase Agreement, with copies to such Buyer's representatives as set forth on the Schedule of Buyers, or to such other mailing address and/or email address and/or to the attention of such other Person as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness of such change, provided that Kelley Drye & Warren LLP shall only be provided notices sent to the lead investor. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender's e-mail containing the time, date and recipient's e-mail or (C) provided by a courier or overnight courier service shall be rebuttable evidence of personal service, receipt by e-mail or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof. The Company and each Investor acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that each party hereto shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this Agreement by any other party hereto and to enforce specifically the terms and provisions hereof (without the necessity of showing economic loss and without any bond or other security being required), this being in addition to any other remedy to which any party may be entitled by law or equity.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of Delaware, without giving effect to any provision of law or rule (whether of the State of Delaware or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Delaware. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in Wilmington, Delaware, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) This Agreement, the other Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments referenced herein and therein constitute the entire agreement among the parties hereto and thereto solely with respect to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein. This Agreement, the other Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments referenced herein and therein supersede all prior agreements and understandings among the parties hereto solely with respect to the subject matter hereof and thereof; provided, however, nothing contained in this Agreement or any other Transaction Document shall (or shall be deemed to) (i) have any effect on any agreements any Investor has entered into with the Company or any of its Subsidiaries prior to the date hereof with respect to any prior investment made by such Investor in the Company, (ii) waive, alter, modify or amend in any respect any obligations of the Company or any of its Subsidiaries or any rights of or benefits to any Investor or any other Person in any agreement entered into prior to the date hereof between or among the Company and/or any of its Subsidiaries and any Investor and all such agreements shall continue in full force and effect or (iii) limit any obligations of the Company under any of the other Transaction Documents.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Subject to compliance with Section 9 (if applicable), this Agreement shall inure to the benefit of and be binding upon the permitted successors and assigns of each of the parties hereto. This Agreement is not for the benefit of, nor may any provision hereof be enforced by, any Person, other than the parties hereto, their respective permitted successors and assigns and the Persons referred to in Sections 6 and 7 hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter, singular and plural forms thereof. The terms "including," "includes," "include" and words of like import shall be construed broadly as if followed by the words "without limitation." The terms "herein," "hereunder," "hereof" and words of like import refer to this entire Agreement instead of just the provision in which they are found.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) This Agreement may be executed in two or more identical counterparts, each of which shall be deemed an original, but all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event that any signature is delivered by facsimile transmission or by an email which contains a portable document format (.pdf) file of an executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rules of strict construction will be applied against any party. Notwithstanding anything to the contrary set forth in Section 10, terms used in this Agreement but defined in the other Transaction Documents shall have the meanings ascribed to such terms on the Initial Closing Date in such other Transaction Documents unless otherwise consented to in writing by each Investor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) All consents and other determinations required to be made by the Investors pursuant to this Agreement shall be made, unless otherwise specified in this Agreement, by the Required Holders, determined as if all of the outstanding Notes then held by the Investors have been converted for Registrable Securities without regard to any limitations on redemption, amortization and/or conversion of the Notes then held by Investors.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) The obligations of each Investor under this Agreement and the other Transaction Documents are several and not joint with the obligations of any other Investor, and no Investor shall be responsible in any way for the performance of the obligations of any other Investor under this Agreement or any other Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Investor pursuant hereto or thereto, shall be deemed to constitute the Investors as, and the Company acknowledges that the Investors do not so constitute, a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption that the Investors are in any way acting in concert or as a group or entity with respect to such obligations or the transactions contemplated by the Transaction Documents or any matters, and the Company acknowledges that the Investors are not acting in concert or as a group, and the Company shall not assert any such claim, with respect to such obligations or the transactions contemplated by this Agreement or any of the other the Transaction Documents. Each Investor shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall not be necessary for any other Investor to be joined as an additional party in any proceeding for such purpose. The use of a single agreement with respect to the obligations of the Company contained herein was solely in the control of the Company, not the action or decision of any Investor, and was done solely for the convenience of the Company and not because it was required or requested to do so by any Investor. It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company and an Investor, solely, and not between the Company and the Investors collectively and not between and among Investors.

[signature page follows]

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**IN WITNESS WHEREOF**, each Buyer and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed as of the date first written above.

**COMPANY**:

**QUMULUSAI, INC.**

By:<u> </u><u>/s/ Mike Maniscalo</u><u> </u>

Name: Mike Maniscalco

Title: Chief Executive Officer

[Signature Page to Registration Rights Agreement]

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**IN WITNESS WHEREOF**, each Buyer and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed as of the date first written above.

**BUYERS**

**[\*\*\*]**

By:<u> </u><u>/s/ [\*\*\*]</u><u> </u>

Name: [\*\*\*]

Title: [\*\*\*]

[Signature Page to Registration Rights Agreement]

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**EXHIBIT A**

**<u>FORM OF NOTICE OF EFFECTIVENESS</u> <u>OF REGISTRATION STATEMENT</u>**

___________________________

___________________________

Attention:<u> </u>

**Re:** QumulusAI, Inc.

Ladies and Gentlemen:

[We are][I am] counsel to QumulusAI, Inc., a Georgia corporation (the "**Company**"), and have represented the Company in connection with that certain Securities Purchase Agreement (the "**Securities Purchase Agreement**") entered into by and among the Company and the buyers named therein (collectively, the "**Holders**") pursuant to which the Company issued to the Holders senior secured convertible notes (the "**Notes**") convertible into the Company's shares of common stock, no par value per share (the "**Common Stock**"). Pursuant to the Securities Purchase Agreement, the Company also has entered into a Registration Rights Agreement with the Holders (the "**Registration Rights Agreement**") pursuant to which the Company agreed, among other things, to register the Registrable Securities (as defined in the Registration Rights Agreement), including the shares of Common Stock issuable upon conversion of the Notes under the Securities Act of 1933, as amended (the "**1933 Act**"). In connection with the Company's obligations under the Registration Rights Agreement, on<u> </u><u> </u>, 20<u> </u>, the Company filed a Registration Statement on Form [S-1][S-3] (File No. 333-) (the "**Registration Statement**") with the Securities and Exchange Commission (the "**SEC**") relating to the Registrable Securities which names each of the Holders as a selling shareholder thereunder.

In connection with the foregoing, [we][I] advise you that [a member of the SEC's staff has advised [us][me] by telephone that [the SEC has entered an order declaring the Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS]] [an order declaring the Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS]] has been posted on the web site of the SEC at www.sec.gov] and [we][I] have no knowledge, after a review of information posted on the website of the SEC at http://www.sec.gov/litigation/stoporders.shtml, that any stop order suspending its effectiveness has been issued or that any proceedings for that purpose are pending before, or threatened by, the SEC and the Registrable Securities are available for resale under the 1933 Act pursuant to the Registration Statement.

This letter shall serve as our standing opinion to you that the shares of Common Stock underlying the Notes are freely transferable by the Holders pursuant to the Registration Statement. You need not require further letters from us to effect any future legend-free issuance or reissuance of such shares of Common Stock to the Holders as contemplated by the Company's Irrevocable Transfer Agent Instructions dated<u> </u><u> </u>, 20<u> </u>.

Very truly yours,

[ISSUER'S COUNSEL]

By:<u> </u>

CC: [\*\*\*]

------

**EXHIBIT B**

**SELLING SHAREHOLDERS**

The shares of common stock being offered by the selling shareholders are those issuable to the selling shareholders upon conversion of the notes. For additional information regarding the issuance of the notes, see "Private Placement of Notes" above. We are registering the shares of common stock in order to permit the selling shareholders to offer the shares for resale from time to time. Except for the ownership of the notes issued pursuant to the Securities Purchase Agreement, the selling shareholders have not had any material relationship with us within the past three years.

The table below lists the selling shareholders and other information regarding the beneficial ownership (as determined under Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder) of the shares of common stock held by each of the selling shareholders. The second column lists the number of shares of common stock beneficially owned by the selling shareholders, based on their respective ownership of shares of common stock and notes, as of<u> </u>, 20<u> </u>, assuming conversion of the notes held by each such selling shareholder on that date but taking account of any limitations on conversion set forth therein.

The third column lists the shares of common stock being offered by this prospectus by the selling shareholders and does not take in account any limitations on conversion of the notes set forth therein.

In accordance with the terms of a registration rights agreement with the holders of the notes, this prospectus generally covers the resale of the maximum number of shares of common stock issued or issuable pursuant to the Notes, including payment of interest on the notes through [DATE], determined as if the outstanding notes (including interest on the notes through [DATE]) were converted in full (without regard to any limitations on conversion contained therein solely for the purpose of such calculation) at the alternate conversion price in effect on the date this registration statement was initially filed with the SEC. Because the conversion price and alternate conversion price of the notes may be adjusted, the number of shares that will actually be issued may be more or less than the number of shares being offered by this prospectus. The fourth column assumes the sale of all of the shares offered by the selling shareholders pursuant to this prospectus.

Under the terms of the notes, a selling shareholder may not convert the notes to the extent (but only to the extent) such selling shareholder or any of its affiliates would beneficially own a number of shares of our common stock which would exceed 4.99% of the outstanding shares of the Company. The number of shares in the second column reflects these limitations. The selling shareholders may sell all, some or none of their shares in this offering. See "Plan of Distribution."

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| | | | |
|:---|:---|:---|:---|
| **Name of Selling Shareholder** | **Number of Shares of** <br> **Common Stock Owned** <br> **Prior to Offering** | **Maximum Number of Shares** <br> **of Common Stock to be Sold** <br> **Pursuant to this Prospectus** | **Number of Shares of** <br> **Common Stock of** <br> **Owned After Offering** |

---

[\*\*\*] (1)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) [\*\*\*]

------

**PLAN OF DISTRIBUTION**

We are registering the shares of common stock issuable upon conversion of the notes to permit the resale of these shares of common stock by the holders of the notes from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the selling shareholders of the shares of common stock. We will bear all fees and expenses incident to our obligation to register the shares of common stock.

The selling shareholders may sell all or a portion of the shares of common stock held by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. If the shares of common stock are sold through underwriters or broker-dealers, the selling shareholders will be responsible for underwriting discounts or commissions or agent's commissions. The shares of common stock may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions, pursuant to one or more of the following methods:

● on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale;

● in the over-the-counter market;

● in transactions otherwise than on these exchanges or systems or in the over-the-counter market;

● through the writing or settlement of options, whether such options are listed on an options exchange or otherwise;

● ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

● block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

● purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

● an exchange distribution in accordance with the rules of the applicable exchange;

● privately negotiated transactions;

● short sales made after the date the Registration Statement is declared effective by the SEC;

● broker-dealers may agree with a selling security holder to sell a specified number of such shares at a stipulated price per share;

------

● a combination of any such methods of sale; and

● any other method permitted pursuant to applicable law.

The selling shareholders may also sell shares of common stock under Rule 144 promulgated under the Securities Act of 1933, as amended, if available, rather than under this prospectus. In addition, the selling shareholders may transfer the shares of common stock by other means not described in this prospectus. If the selling shareholders effect such transactions by selling shares of common stock to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the selling shareholders or commissions from purchasers of the shares of common stock for whom they may act as agent or to whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess of those customary in the types of transactions involved). In connection with sales of the shares of common stock or otherwise, the selling shareholders may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the shares of common stock in the course of hedging in positions they assume. The selling shareholders may also sell shares of common stock short and deliver shares of common stock covered by this prospectus to close out short positions and to return borrowed shares in connection with such short sales. The selling shareholders may also loan or pledge shares of common stock to broker-dealers that in turn may sell such shares.

The selling shareholders may pledge or grant a security interest in some or all of the notes or shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending, if necessary, the list of selling shareholders to include the pledgee, transferee or other successors in interest as selling shareholders under this prospectus. The selling shareholders also may transfer and donate the shares of common stock in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

To the extent required by the Securities Act and the rules and regulations thereunder, the selling shareholders and any broker-dealer participating in the distribution of the shares of common stock may be deemed to be "underwriters" within the meaning of the Securities Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting commissions or discounts under the Securities Act. At the time a particular offering of the shares of common stock is made, a prospectus supplement, if required, will be distributed, which will set forth the aggregate amount of shares of common stock being offered and the terms of the offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the selling shareholders and any discounts, commissions or concessions allowed or re-allowed or paid to broker-dealers.

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

------

of common stock may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.

There can be no assurance that any selling shareholder will sell any or all of the shares of common stock registered pursuant to the registration statement, of which this prospectus forms a part.

The selling shareholders and any other person participating in such distribution will be subject to applicable provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, including, without limitation, to the extent applicable, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the shares of common stock by the selling shareholders and any other participating person. To the extent applicable, Regulation M may also restrict the ability of any person engaged in the distribution of the shares of common stock to engage in market-making activities with respect to the shares of common stock. All of the foregoing may affect the marketability of the shares of common stock and the ability of any person or entity to engage in market-making activities with respect to the shares of common stock.

We will pay all expenses of the registration of the shares of common stock pursuant to the registration rights agreement, estimated to be $[ ] in total, including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance with state securities or "blue sky" laws; provided, however, a selling shareholder will pay all underwriting discounts and selling commissions, if any. We will indemnify the selling shareholders against liabilities, including some liabilities under the Securities Act in accordance with the registration rights agreements or the selling shareholders will be entitled to contribution. We may be indemnified by the selling shareholders against civil liabilities, including liabilities under the Securities Act that may arise from any written information furnished to us by the selling shareholder specifically for use in this prospectus, in accordance with the related registration rights agreements or we may be entitled to contribution.

**Once sold under the registration statement, of which this prospectus forms a part, the shares of common stock will be freely tradable in the hands of persons other than our affiliates.**

## Exhibit 10.40

**Exhibit 10.40**

**GLOBAL DIGITAL HOLDINGS, INC.**

**2022 OPTION PLAN**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **<u>Purpose and Term</u>**. The name of this plan is the Global Digital Holdings, Inc. 2022 Option Plan (the "**Plan**"). The purposes of the Plan are to (a) enable Global Digital Holdings, Inc., a Georgia corporation (the "**Company**"), to attract, retain and motivate the types of Employees, Consultants and Directors who will contribute to the Company's long range success; (b) provide incentives that align the interests of Employees, Consultants and Directors with those of the shareholders of the Company; and (c) promote the success of the Company's business. The term of this Plan shall be ten (10) years from the Effective Date, after which time, no further Awards may be granted under this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **<u>Definitions</u>**.

"**Affiliate**" means a corporation or other entity that, directly or through one or more intermediaries, controls, is controlled by or is under common control with, the Company (within the meaning of the Exchange Act).

"**Applicable Laws**" means the requirements related to or implicated by the administration of the Plan under applicable state corporate law, United States federal and state securities laws, the Code and the applicable laws of any foreign country or jurisdiction where Awards are granted under the Plan.

"**Award**" means any right granted under the Plan, including an Incentive Stock Option or a Non-Qualified Stock Option.

"**Award Agreement**" means a written agreement, contract, certificate or other instrument or document evidencing the terms and conditions of an individual Award granted under the Plan which may, in the discretion of the Company, be transmitted electronically to any Participant. Each Award Agreement shall be subject to the terms and conditions of the Plan.

"**Board**" means the Board of Directors of the Company, as constituted at any time.

"**Cause**" means, unless the applicable Award Agreement provides otherwise:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) with respect to any Employee or Consultant:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) if the Employee or Consultant is a party to an employment or service agreement with the Company or an Affiliate and such agreement provides for a definition of "cause," then the definition contained therein; or

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(ii) if no such agreement exists, or if such agreement does not define "cause," the occurrence of any of the following events:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) commission of, or plea or guilty or no contest to, a felony or a crime involving fraud, dishonesty, moral turpitude under the laws of the United States or any state thereof or the commission of any other act involving willful malfeasance or material fiduciary breach with respect to the Company or an Affiliate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) failure to perform duties as reasonably requested by the Board;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) material breach of any agreement with the Company or an Affiliate, or a material violation of the Company's or an Affiliate's code of conduct or other written policy;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) unauthorized use or disclosure of the Company's or an Affiliate's confidential or proprietary information or trade secrets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) use of illegal drugs or abuse of alcohol that materially impairs the Participant's ability to perform his or her duties to the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) gross negligence or willful misconduct with respect to the Company or an Affiliate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) fraud or conduct contributing to any financial restatements or irregularities, as determined by the Committee in its sole discretion; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(H) any other conduct or act determined to be materially injurious, detrimental or prejudicial to any interest of the Company or any of its Affiliates, as determined by the Committee in its sole discretion; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) with respect to any Director, a determination by a majority of the disinterested Board members that the Director has engaged in any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) malfeasance in office;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) gross misconduct or neglect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) false or fraudulent misrepresentation inducing the Director's appointment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) willful conversion of corporate funds; or

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) repeated failure to participate in Board meetings on a regular basis despite having received proper notice of the meetings in advance.

The Committee, in its absolute discretion, shall determine the effect of all matters and questions relating to whether a Participant has been discharged for Cause. Any determination by the Company that a Participant's status as a service provider was terminated by reason of dismissal without Cause for the purpose of Awards granted hereunder shall have no effect upon any determination of the rights or obligations of the Company, any Affiliate or such Participant for any other purpose.

"**Change in Control**" means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) One Person (or more than one Person acting as a group) acquires ownership of stock of the Company that, together with the stock held by such Person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the stock of the Company; provided, that, a Change in Control shall not occur if any Person (or more than one Person acting as a group) owns more than fifty percent (50%) of the total fair market value or total voting power of the Company's stock and acquires additional stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) One Person (or more than one Person acting as a group) acquires (or has acquired during the twelve-month period ending on the date of the most recent acquisition) ownership of the Company's stock possessing thirty percent (30%) or more of the total voting power of the stock of such corporation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) A majority of the members of the Board is replaced during any twelve-month period by Directors whose appointment or election is not endorsed by a majority of the Board before the date of appointment or election; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) One Person (or more than one Person acting as a group), acquires (or has acquired during the twelve-month period ending on the date of the most recent acquisition) assets from the Company that have a total gross fair market value equal to or more than forty percent (40%) of the total gross fair market value of all of the assets of the Company immediately before such acquisition(s).

Notwithstanding the foregoing, a transaction will not be deemed a Change in Control unless such transaction qualifies as a Change in Control event within the meaning of Section 409A. Further, and for the avoidance of doubt, a transaction will not constitute a Change in Control if: (i) its sole purpose is to change the jurisdiction of the Company's incorporation, or (ii) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the Persons who held the Company's securities immediately before such transaction.

"**Clawback Event**" has the meaning given to such term in Section 10.6.

"**Code**" means the Internal Revenue Code of 1986, as it may be amended from time to time. Any reference to a section of the Code shall be deemed to include a reference to any regulations promulgated thereunder.

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"**Committee**" means a committee of one or more members of the Board appointed by the Board to administer the Plan in accordance with Section 3.4 and Section 3.5; *provided, however*, that if no Committee has been appointed by the Board, the "Committee" shall be the Board.

"**Common Stock**" means the common stock of the Company.

"**Company**" has the meaning set forth in Section 1.

"**Consultant**" means any individual who is engaged by the Company or any Affiliate to render consulting or advisory services, whether or not compensated for such services.

"**Continuous Service**" means that the Participant's service with the Company or an Affiliate, whether as an Employee, Consultant or Director, is not interrupted or terminated. The Participant's Continuous Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the entity for which the Participant renders such service, *provided, however*, that there is no interruption or termination of the Participant's Continuous Service; *provided further* that if any Award is subject to Section 409A, this sentence shall only be given effect to the extent consistent with Section 409A. For example, a change in status from an Employee of the Company to a Director of an Affiliate will not constitute an interruption of Continuous Service. The Committee or its delegate, in its sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by that party, including sick leave, military leave or any other personal or family leave of absence.

"**Director**" means a member of the Board.

"**Disability**" means, unless otherwise provided in an Award Agreement, a Participant being considered "disabled" within the meaning of Code Section 409A(a)(2)(C) and the regulations thereunder.'

"**Disqualifying Disposition**" has the meaning set forth in Section 6.11.

"**Effective Date**" shall mean the date as of which this Plan is adopted by the Board.

"**Employee**" means any person, including an officer or Director, employed by the Company or an Affiliate; *provided, however,* that for purposes of determining eligibility to receive Incentive Stock Options, an Employee shall mean an employee of the Company or a parent or subsidiary corporation within the meaning of Code Section 424. Mere service as a Director or payment of a Director's fee by the Company or an Affiliate shall not be sufficient to constitute "employment" by the Company or an Affiliate.

"**Exchange Act**" means the Securities Exchange Act of 1934, as amended, and any successor thereto.

------

"**Fair Market Value**" means, on a given date, (a) if there is a public market for the shares of Common Stock on such date, the closing price of the shares as reported on such date on the principal national securities exchange on which the shares are listed or, if no sales of shares have been reported on any national securities exchange, then the immediately preceding date on which sales of the shares have been so reported or quoted, and (b) if there is no public market for the shares of Common Stock on such date, then the fair market value shall be the fair market value of such shares as determined by the Committee in its discretion, and to the extent deemed appropriate by the Committee, based upon a recent transaction price per share or third-party valuation of the Common Stock and, to the extent necessary, shall be determined in a manner consistent with Section 409A and Treasury Regulation 1.409A-1(b)(5)(iv), as well as any successor regulation or interpretation.

"**Grant Date**" means the date on which the Committee adopts a resolution, or takes other appropriate action, expressly granting an Award to a Participant that specifies the key terms and conditions of the Award or, if a later date is set forth in such resolution, then such date as is set forth in such resolution.

"**Incentive Stock Option**" means an Option intended to qualify as an incentive stock option within the meaning of Code Section 422 and the regulations thereunder.

"**Involuntary Transfer**" means a transfer of a Participant's Common Stock by operation of law including, without limitation, as a result of (a) a sale or other disposition by a trustee or debtor in possession appointed or retained in a bankruptcy case, (b) a sale at any creditors' or judicial sale, or (c) a transfer arising out of a divorce or separation proceeding.

"**Non-Qualified Stock Option**" means an Option that by its terms does not qualify or is not intended to qualify as an Incentive Stock Option.

"**Option**" means an Incentive Stock Option or a Non-Qualified Stock Option granted pursuant to the Plan.

"**Option Exercise Price**" means the price at which a share of Common Stock may be purchased upon the exercise of an Option.

"**Optionholder**" means a Person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option.

"**Participant**" means an eligible Person to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Award.

"**Person**" means any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act).

"**Plan**" has the meaning set forth in Section 1.

------

"**Section 409A**" means Code Section 409A.

"**Shareholders**' **Agreement**" means the Shareholders' Agreement by and among the Company and its shareholders, as may be in effect from time to time.

"**Ten Percent Shareholder**" means a Person who owns (or is deemed to own pursuant to Code Section 424(d)) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or of any of its Affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. **<u>Administration</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 **<u>Authority of Committee</u>**. The Plan shall be administered by the Committee. Subject to the terms of the Plan, the Committee's charter and Applicable Laws, and in addition to other express powers and authorization conferred by the Plan, the Committee shall have the authority:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) to construe and interpret the Plan and apply its provisions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) to promulgate, amend, and rescind rules and regulations relating to the administration of the Plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) to authorize any person to execute, on behalf of the Company, any instrument required to carry out the purposes of the Plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) to delegate its authority to one or more officers of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) to determine when Awards are to be granted under the Plan and the applicable Grant Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) from time to time to select, subject to the limitations set forth in this Plan, those Participants to whom Awards shall be granted;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) to determine the number of shares of Common Stock to be made subject to each Award;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) to determine whether each Option is to be an Incentive Stock Option or a Non-Qualified Stock Option;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) to prescribe the terms and conditions of each Award, including, without limitation, the exercise price and medium of payment and vesting provisions, and to specify the provisions of the Award Agreement relating to such grant;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) to amend any outstanding Awards, including for the purpose of modifying the time or manner of vesting, or the term of any outstanding Award; *provided, however*, that if any such amendment impairs a Participant's rights or increases a Participant's obligations under his or her Award or creates or increases a Participant's federal income tax liability with respect to an Award, such amendment shall also be subject to the Participant's consent;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) to determine the duration and purpose of leaves of absences which may be granted to a Participant without constituting termination of their employment for purposes of the Plan, which periods shall be no shorter than the periods generally applicable to Employees under the Company's employment policies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) to make decisions with respect to outstanding Awards that may become necessary upon a change in corporate control or an event that triggers anti-dilution adjustments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) to interpret, administer, reconcile any inconsistency in, correct any defect in and/or supply any omission in the Plan and any instrument or agreement relating to, or Award granted under, the Plan; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) to exercise discretion to make any and all other determinations which it determines to be necessary or advisable for the administration of the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 **<u>Acquisitions and Other Transactions</u>**. The Committee may, from time to time, assume outstanding awards granted by another entity, whether in connection with an acquisition of such other entity or otherwise, by either (a) granting an Award under the Plan in replacement of or in substitution for the award assumed by the Company, or (b) treating the assumed award as if it had been granted under the Plan if the terms of such assumed award could be applied to an Award granted under the Plan. Such assumed award shall be permissible if the holder of the assumed award would have been eligible to be granted an Award hereunder if the other entity had applied the rules of this Plan to such grant. The Committee may also grant Awards under the Plan in settlement of or in substitution for outstanding awards or obligations to grant future awards in connection with the Company or an Affiliate acquiring another entity, an interest in another entity, or an additional interest in an Affiliate whether by merger, stock purchase, asset purchase or other form of transaction.]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 **<u>Committee Decisions Final</u>**. All decisions, determinations, and interpretations made by the Committee pursuant to the provisions of the Plan shall be final and binding on the Company, the Participants, and any other holder of an Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4 **<u>Delegation</u>**. The Committee shall have the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Committee shall thereafter be to the committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the Board the administration of the Plan. The members of the Committee shall be appointed by and serve at the pleasure of the Board. From time to time, the Board may increase or decrease the size of the Committee, add additional members to, remove members (with or without cause) from, appoint new members in substitution therefor, and fill vacancies, however caused, in the Committee. The Committee shall act pursuant to a vote of the majority of its members or, in the case of a Committee comprised of only two members, the unanimous consent of its members, whether present or not, or by the written consent of the majority of its members and minutes shall be kept of all of its meetings and copies thereof shall be provided to the Board. Subject to the limitations prescribed by the Plan and the Board, the Committee may establish and follow such rules and regulations for the conduct of its business as it may determine to be advisable.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5 **<u>Committee Composition</u>**. Except as otherwise determined by the Board, the Committee shall consist solely of two or more Persons appointed to the Committee from time to time by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.6 **<u>Indemnification</u>**. In addition to such other rights of indemnification as they may have as Directors or members of the Committee, and to the extent allowed by Applicable Laws, the Committee shall be indemnified by the Company against the reasonable expenses, including attorney's fees, actually incurred in connection with any action, suit or proceeding or in connection with any appeal therein, to which the Committee may be party by reason of any action taken or failure to act under or in connection with the Plan or any Award granted under the Plan, and against all amounts paid by the Committee in settlement thereof (*provided, however*, that the settlement has been approved by the Company, which approval shall not be unreasonably withheld) or paid by the Committee in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such Committee did not act in good faith and in a manner which such Person reasonably believed to be in the best interests of the Company, or in the case of a criminal proceeding, had no reason to believe that the conduct complained of was unlawful; *provided, however*, that within 60 days after institution of any such action, suit or proceeding, such Committee shall, in writing, offer the Company the opportunity at its own expense to handle and defend such action, suit or proceeding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. **<u>Shares Subject to the Plan</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 Subject to adjustment in accordance with Section 8, a total of One Million Five Hundred Thousand (1,500,000) shares of Common Stock shall be available for the grant of Awards under the Plan; *provided, however*, that no more than One Million Five Hundred Thousand (1,500,000) shares of Common Stock may be granted as Incentive Stock Options. During the terms of the Awards, the Company shall keep available at all times the number of shares of Common Stock required to satisfy such Awards.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 Shares of Common Stock available for distribution under the Plan may consist, in whole or in part, of authorized and unissued shares or treasury shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 Any shares of Common Stock subject to an Award that is canceled, forfeited or expires prior to exercise or realization, either in full or in part, shall again become available for issuance under the Plan. Notwithstanding anything to the contrary contained herein, shares subject to an Award under the Plan shall not again be made available for issuance or delivery under the Plan if such shares are (a) shares tendered in payment of an Option or (b) shares delivered or withheld by the Company to satisfy any tax withholding obligation.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 If the Committee authorizes the assumption of awards pursuant to Section 3.2 or Section 9.1 hereof, the assumption will reduce the number of shares available for issuance under the Plan in the same manner as if the assumed awards had been granted under the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. **<u>Eligibility and Awards</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 **<u>Eligible Award Recipients</u>**. The Persons eligible to receive Awards are the Employees, Consultants and Directors of the Company and its Affiliates. In order to receive an Award and become a Participant, such Employee, Consultant or Director must be selected by the Committee to receive an Award. In selecting who may receive an Award, and determining the amount of Awards to be granted under the Plan, the Committee shall consider any and all factors that it deems relevant or appropriate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 **<u>Available Awards</u>**. Awards that may be granted under the Plan include: (a) Incentive Stock Options and (b) Non-Qualified Stock Options. Incentive Stock Options may be granted to "employees" (within the meaning of Treasury Regulation Section 1.421-7(h)) of the Company or any "subsidiary corporation" with respect to the Company for purposes of Code Section 424(f) only. Awards other than Incentive Stock Options may be granted to Employees, Consultants and Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 **<u>Determination of Awards</u>**. The Committee shall determine the terms and conditions of all Awards granted to Participant in accordance with its authority under Section 3. The terms and conditions of all Awards under the Plan will be specified by the Committee and will be set forth in individual Award Agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4 **<u>Ten Percent Shareholders</u>**. A Ten Percent Shareholder shall not be granted an Incentive Stock Option unless the Option Exercise Price is at least 110% of the Fair Market Value of the Common Stock at the Grant Date and the Option is not exercisable after the expiration of five years from the Grant Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. **<u>Option Provisions</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 **<u>General</u>**. Each Option granted under the Plan shall be evidenced by an Award Agreement. Each Option so granted shall be subject to the conditions set forth in this Section 6, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement. All Options shall be separately designated Incentive Stock Options or Non-Qualified Stock Options at the time of grant. Notwithstanding the foregoing, the Company shall have no liability to any Participant or any other person if an Option designated as an Incentive Stock Option fails to qualify as such at any time or if an Option is determined to constitute "nonqualified deferred compensation" within the meaning of Section 409A and the terms of such Option do not satisfy the requirements of Section 409A. The provisions of separate Options need not be identical, but each Option shall include (through incorporation of provisions hereof by reference in the Option or otherwise) the substance of each of the provisions set forth in the remainder of this Section 6.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 **<u>Term</u>**. Subject to the provisions of Section 5.4 regarding Ten Percent Shareholders, no Incentive Stock Option shall be exercisable after the expiration of 10 years from the Grant Date. The term of a Non-Qualified Stock Option granted under the Plan shall be determined by the Committee; *provided, however*, no Non-Qualified Stock Option shall be exercisable after the expiration of 10 years from the Grant Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 **<u>Exercise Price of an Incentive Stock Option</u>**. Subject to the provisions of Section 5.4 regarding Ten Percent Shareholders, the Option Exercise Price of each Incentive Stock Option shall be not less than 100% of the Fair Market Value of the Common Stock subject to the Option on the Grant Date. Notwithstanding the foregoing, an Incentive Stock Option may be granted with an Option Exercise Price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another Option in a manner satisfying the provisions of Code Section 424(a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4 **<u>Exercise Price of a Non-Qualified Stock Option</u>**. The Option Exercise Price of each Non-Qualified Stock Option shall be not less than 100% of the Fair Market Value of the Common Stock subject to the Option on the Grant Date. Notwithstanding the foregoing, a Non-Qualified Stock Option may be granted with an Option Exercise Price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another Option in a manner satisfying the provisions of Section 409A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5 **<u>Method of Exercise</u>**. The Option Exercise Price shall be paid, to the extent permitted by Applicable Laws, either (a) in cash or by certified or bank check at the time the Option is exercised or (b) in the discretion of the Committee, upon such terms as the Committee shall approve: (i) by delivery to the Company of other shares of Common Stock, duly endorsed for transfer to the Company, with a Fair Market Value on the date of delivery equal to the Option Exercise Price (or portion thereof) due for the number of shares being acquired; (ii) by a "net exercise" procedure effected by withholding the minimum number of shares of Common Stock otherwise issuable in respect of an Option that are needed to pay the Option Exercise Price; (iii) by any combination of the foregoing methods; or (iv) in any other form of legal consideration that may be acceptable to the Committee. Unless otherwise specifically provided in the Option, the Option Exercise Price that is paid by delivery to the Company of other Common Stock acquired, directly or indirectly from the Company, shall be paid only by shares of Common Stock that have been held for more than six months (or such longer or shorter period of time required to avoid a charge to earnings for financial accounting purposes).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6 **<u>Vesting of Options</u>**. Unless otherwise provided in an Award Agreement, one-thirty-sixth (1/36) of each Option shall vest and become exercisable on the Grant Date of the Option. Thereafter, an additional one-thirty-sixth (1/36) of each Option shall vest on each subsequent monthly anniversary of the Grant Date so that one hundred percent (100%) of the Option is fully vested on the third anniversary of the Grant Date. Each Option may be subject to such other terms and conditions as the Committee may deem appropriate. No Option may be exercised for a fraction of a share of Common Stock. The Committee may, but shall not be required to, provide for an acceleration of vesting and exercisability in the terms of any Option upon the occurrence of a specified event.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.7 **<u>Termination of Continuous Service</u>**. Unless otherwise provided in an Award Agreement or in an employment agreement the terms of which have been approved by the Committee, in the event an Optionholder's Continuous Service terminates (other than upon the Optionholder's death or Disability), the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination) but only within such period of time ending on the earlier of (a) the date three months following the termination of the Optionholder's Continuous Service or (b) the expiration of the term of the Option as set forth in the Award Agreement; *provided, however*, that if the termination of Continuous Service is by the Company for Cause, all outstanding Options (whether or not vested) shall immediately terminate and cease to be exercisable. If, after termination, the Optionholder does not exercise his or her Option within the time specified in the Award Agreement, the Option shall terminate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.8 **<u>Disability of Optionholder</u>**. Unless otherwise provided in an Award Agreement, in the event that an Optionholder's Continuous Service terminates as a result of the Optionholder's Disability, the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination), but only within such period of time ending on the earlier of (a) the date 12 months following such termination or (b) the expiration of the term of the Option as set forth in the Award Agreement. If, after termination, the Optionholder does not exercise his or her Option within the time specified herein or in the Award Agreement, the Option shall terminate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.9 **<u>Death of Optionholder</u>**. Unless otherwise provided in an Award Agreement, in the event an Optionholder's Continuous Service terminates as a result of the Optionholder's death, then the Option may be exercised (to the extent the Optionholder was entitled to exercise such Option as of the date of death) by the Optionholder's estate, by a Person who acquired the right to exercise the Option by bequest or inheritance or by a Person designated to exercise the Option upon the Optionholder's death, but only within the period ending on the earlier of (a) the date 12 months following the date of death or (b) the expiration of the term of such Option as set forth in the Award Agreement. If, after the Optionholder's death, the Option is not exercised within the time specified herein or in the Award Agreement, the Option shall terminate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.10 **<u>Incentive Stock Option $100,000 Limitation</u>**. No Incentive Stock Option shall be granted to a Participant as a result of which the aggregate Fair Market Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time in any calendar year under the Plan and any other stock option plans of the Company or any subsidiary or parent corporation, would exceed $100,000, determined in accordance with Code Section 422(d). This limitation shall be applied by taking Options into account in the order in which granted.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.11 **<u>Disqualifying Dispositions</u>**. Any Participant who shall make a "disposition" (as defined in Code Section 424) of all or any portion of shares of Common Stock acquired upon exercise of an Incentive Stock Option within two years from the Grant Date of such Incentive Stock Option or within one year after the issuance of the shares of Common Stock acquired upon exercise of such Incentive Stock Option (a "**Disqualifying Disposition**") shall be required to immediately advise the Company in writing as to the occurrence of the sale and the price realized upon the sale of such shares of Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.12 **<u>Termination for Cause</u>**. Unless otherwise provided in an Award Agreement, all outstanding Options (whether or not vested) shall immediately terminate and cease to be exercisable on the date on which an Optionholder is terminated for Cause.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.13 **<u>Violation of Employment Agreement</u>**. Unless otherwise provided in an Award Agreement, all outstanding Options (whether or not vested) shall immediately terminate and cease to be exercisable as of the date on which the Committee determines in its sole discretion that a Participant has materially violated any confidentiality, non-solicitation, development, or noncompetition agreement with the Company or an Affiliate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. **<u>Miscellaneous</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 **<u>Acceleration of Exercisability and Vesting</u>**. The Committee shall have the power to accelerate the time at which an Award may first be exercised or the time during which an Award or any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Award stating the time at which it may first be exercised or the time during which it will vest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 **<u>Shareholder Rights</u>**. Except as provided in the Plan or an Award Agreement, no Participant shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to an Award unless and until such Participant has satisfied all requirements for exercise or settlement of the Award pursuant to its terms (including any obligation to execute the Shareholders' Agreement) and no adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions of other rights for which the record date is prior to the date such Common Stock certificate is issued, except as provided in Section 8 hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 **<u>Use of Proceeds from Stock</u>**. Proceeds from the sale of Common Stock pursuant to Awards, or upon the exercise thereof, shall constitute general funds of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4 **<u>No Employment or Other Service Rights</u>**. Nothing in the Plan or any instrument executed or Award granted pursuant thereto shall confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Award was granted or shall affect the right of the Company or an Affiliate to terminate (a) the employment of an Employee with or without notice and with or without Cause or (b) the service of a Director pursuant to the bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5 **<u>Transfer; Approved Leave of Absence</u>**. For purposes of the Plan, no termination of employment by an Employee shall be deemed to result from either (a) a transfer of employment to the Company from an Affiliate or from the Company to an Affiliate, or from one Affiliate to another, or (b) an approved leave of absence for military service or sickness, or for any other purpose approved by the Company, if the Employee's right to reemployment is guaranteed either by a statute or by contract or under the policy pursuant to which the leave of absence was granted or if the Committee otherwise so provides in writing, in either case, except to the extent inconsistent with Section 409A if the applicable Award is subject thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.6 **<u>Withholding Obligations</u>**. Each Participant shall be responsible for payment of any taxes or similar charges required by law to be paid or withheld from an Award or an amount paid in satisfaction of an Award. Any required withholdings shall be paid by the Participant on or prior to the payment or other event that results in taxable income in respect of an Award. In addition to the methods described in this Plan, the Award Agreement may specify the manner in which the withholding obligation shall be satisfied with respect to the particular type of Award. Without limiting the foregoing, if the Company or any Affiliate determines in its sole discretion that under the requirements of applicable taxation laws or regulations of any governmental authority whatsoever it is obliged to withhold for remittance to a taxing authority any amount upon the grant or exercise of an Award, the exercise of the Call Right, the other disposition or deemed disposition by a Participant of an Award or any Common Stock, or the provision of any other benefit under this Plan, the Company or any of its Affiliates, on its own behalf or on behalf of any third party purchaser of the Award or any Common Stock held by the Participant, may take any steps it considers necessary or appropriate in the circumstances in connection therewith, including, without limiting the generality of the foregoing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) requiring the Participant to pay the Company or any Affiliate such amount as the Company or any Affiliate is obliged to remit to such taxing authority in respect thereof, with any such payment, in any event, being due no later than the date as of which any such amount first becomes included in the gross income of the Participant for tax purposes (and further provided that, in the case of an Option, such payment shall be made in the same manner as payment of any applicable exercise price or in any other manner that may be designated by the Committee);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) issuing any Common Stock issued pursuant to an Award to an agent on behalf of the Participant and directing the agent to sell a sufficient number of such shares on behalf of the Participant to satisfy the amount of any such withholding obligation, with the agent paying the proceeds of any such sale to the Company or any Affiliate for this purpose; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) to the extent permitted by law, deducting the amount of any such withholding obligation from any payment of any kind otherwise due to the Participant.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. **<u>Adjustments Upon Changes in Stock</u>**. In the event of changes in the outstanding Common Stock or in the capital structure of the Company by reason of any stock or extraordinary cash dividend, stock split, reverse stock split, an extraordinary corporate transaction such as any recapitalization, reorganization, merger, consolidation, combination, exchange, or other relevant change in capitalization occurring after the Grant Date of any Award, Awards granted under the Plan and any Award Agreements, the exercise price of Options and the maximum number of shares of Common Stock subject to Awards stated in Section 4 may be equitably adjusted or substituted, as to the number, price or kind of a share of Common Stock or other consideration subject to such Awards to the extent necessary to preserve the economic intent of such Award. In the case of adjustments made pursuant to this Section 8, unless the Committee specifically determines that such adjustment is in the best interests of the Company or its Affiliates, the Committee shall, in the case of Incentive Stock Options, ensure that any adjustments under this Section 8 will not constitute a modification, extension or renewal of the Incentive Stock Options within the meaning of Code Section 424(h)(3) and in the case of Non-Qualified Stock Options, ensure that any adjustments under this Section 8 will not constitute a modification of such Non-Qualified Stock Options within the meaning of Section 409A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. **<u>Effect of Change in Control</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1 In the event of a Change in Control, the Committee may, but shall not be obligated to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) accelerate, vest or cause the restrictions to lapse with respect to all or any portion of any Award;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) cancel Awards and cause to be paid to the holders of vested Awards the value of such Awards, if any, as determined by the Committee, in its sole discretion, it being understood that in the case of any Option with an Option Exercise Price that equals or exceeds the price paid for a share of Common Stock in connection with the Change in Control, the Committee may cancel the Option without the payment of consideration therefor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) provide for the issuance of substitute Awards or the assumption or replacement of such Awards; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) provide written notice to Participants that for a period of at least ten (10) days prior to the Change in Control, such Awards shall be exercisable, to the extent applicable, as to all shares of Common Stock subject thereto and upon the occurrence of the Change in Control, any Awards not so exercised shall terminate and be of no further force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2 The obligations of the Company under the Plan shall be binding upon any successor corporation or organization resulting from the merger, consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to all or substantially all of the assets and business of the Company and its Affiliates, taken as a whole.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. **<u>Amendment of the Plan and Awards</u>**.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1 **<u>Amendment of the Plan</u>**. The Board at any time, and from time to time, may amend or terminate the Plan. However, except as provided in Section 8 relating to adjustments upon changes in Common Stock and Section 10.3, no amendment shall be effective unless approved by the shareholders of the Company to the extent shareholder approval is necessary to satisfy any Applicable Laws. At the time of such amendment, the Board shall determine, upon advice from counsel, whether such amendment will be contingent on shareholder approval.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2 **<u>Shareholder Approval</u>**. The Board may, in its sole discretion, submit any other amendment to the Plan for shareholder approval.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3 **<u>Contemplated Amendments</u>**. It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to provide eligible Employees, Consultants and Directors with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to Incentive Stock Options or to the nonqualified deferred compensation provisions of Section 409A and/or to bring the Plan and/or Awards granted under it into compliance therewith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.4 **<u>No Impairment of Rights</u>**. Rights under any Award granted before amendment of the Plan shall not be impaired by any amendment of the Plan unless (a) the Company requests the consent of the Participant and (b) the Participant consents in writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.5 **<u>Amendment of Awards</u>**. The Committee at any time, and from time to time, may amend the terms of any one or more Awards; *provided, however*, that the Committee may not affect any amendment which would otherwise constitute an impairment of the rights under any Award unless (a) the Company requests the consent of the Participant and (b) the Participant consents in writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.6 **<u>Clawback Rights</u>**. Unless the Committee provides otherwise, if a Participant materially violates any confidentiality, non-solicitation, development, or noncompetition agreement with the Company or an Affiliate, if the Participant's employment is terminated for Cause, or upon such other events as determined by the Committee in its sole discretion (each a "**Clawback Event**"), the Company may in its sole discretion (a) repurchase (and the Participant shall sell) any shares of Common Stock acquired by the Participant (or by a permitted transferee of the Participant) pursuant to Awards granted hereunder for a price equal to the purchase price paid (if any) by the Participant under the Award, or if less, the Fair Market Value of the shares of Common Stock on the date of repurchase, or (b) cause the Participant to (and the Participant shall) reimburse the Company the amounts received (either directly or indirectly with respect to amounts that were withheld for tax purposes) by the Participant pursuant to Awards granted and exercised hereunder for a price equal to the excess of the Fair Market Value of the shares of Common Stock on the date of exercise over the Option Exercise Price for the respective shares of Common Stock. In the event a Clawback Event has occurred but is not discovered until a later time, the Company may either repurchase shares of Common Stock as described above (and the Participant shall sell), or require the Participant to (and the Participant shall) reimburse the Company pursuant to the foregoing provisions.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. **<u>General Provisions</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1 **<u>Restrictions on Transfer</u>**. Awards under the Plan shall not be assignable or transferable by a Participant, except by will or by the laws of descent and distribution, and shall not be subject in any manner to assignment, alienation, pledge, encumbrance, or charge. Notwithstanding the foregoing, in the event of the death of a Participant while employed by the Company, except as otherwise provided by the Committee in an Award Agreement, an outstanding Award may become payable to a Participant's beneficiary as designated by such Participant in the manner prescribed by the Committee or, in the absence of an authorized beneficiary designation, by a legatee or legatees of such Award under the Participant's last will, or by such Participant's executors, personal representatives, or distributees of such Award in accordance with the Participant's will of the laws of descent and distribution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.2 **<u>Forfeiture</u>**. The Committee may specify in an Award Agreement at the time of the Award that the Participant's rights, payments, and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture, or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions of an Award. Such events shall include, but shall not be limited to, termination for Cause, violation of material Company policies, breach of noncompetition, confidentiality, or other restrictive covenants that may apply to the Participant, or other conduct by the Participant that is detrimental to the business or reputation of the Company. Unless otherwise provided by the Committee and set forth in an Award Agreement, if a Participant's employment with the Company or any Affiliate shall be terminated for Cause, such Participant's rights, payments and benefits with respect to an Award shall be subject to cancellation, forfeiture, and/or recoupment. In addition, if the Company shall reasonably determine that a Participant has committed or may have committed any act which could constitute the basis for a termination of such Participant's employment for Cause, the Company may suspend the Participant's rights to exercise any option, receive any payment, or vest in any right with respect to any Award pending a determination by the Company of whether an act has been committed which could constitute the basis for a termination for Cause.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.3 **<u>Shareholders</u>**<u>'</u> **<u>Agreement</u>**. In connection with the grant, vesting and/or exercise of any Award under the Plan, the Committee may require a Participant to execute and become a party to the Shareholders' Agreement as a condition of such grant, vesting and/or exercise. In such event, the Participant shall be bound by, and the Company shall have all rights set forth in, the Shareholders' Agreement in addition to the terms of this Plan and any Award Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.4 **<u>Unfunded Plan</u>**. The adoption of the Plan and any reservation of shares of Common Stock or cash amounts by the Company to discharge its obligations hereunder shall not be deemed to create a trust or other funded arrangement. Except upon the issuance of Common Stock pursuant to an Award, any rights of a Participant under the Plan shall be those of a general unsecured creditor of the Company, and neither a Participant nor the Participant's permitted transferees or estate shall have any other interest in any assets of the Company by virtue of the Plan. Notwithstanding the foregoing, the Company shall have the right to implement or set aside funds in a grantor trust, subject to the claims of the Company's creditors or otherwise, to discharge its obligations under the Plan.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.5 **<u>Recapitalizations</u>**. Each Award Agreement shall contain provisions required to reflect the provisions of Section 8.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.6 **<u>Delivery</u>**. Upon exercise of a right granted under this Plan, the Company shall issue Common Stock or pay any amounts due within a reasonable period of time thereafter. Subject to any statutory or regulatory obligations the Company may otherwise have, for purposes of this Plan, 30 days shall be considered a reasonable period of time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.7 **<u>No Fractional Shares</u>**. No fractional shares of Common Stock shall be issued or delivered pursuant to the Plan. The Committee shall determine whether cash, additional Awards or other securities or property shall be issued or paid in lieu of fractional shares of Common Stock or whether any fractional shares should be rounded, forfeited or otherwise eliminated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.8 **<u>Plan Binding on Transferees</u>**. The Plan shall be binding upon the Company, its transferees and assigns, and the Participant, the Participant's executor, administrator, and permitted transferees and beneficiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.9 **<u>Other Provisions</u>**. The Award Agreements authorized under the Plan may contain such other provisions not inconsistent with this Plan, including, without limitation, restrictions upon the exercise of the Awards, as the Committee may deem advisable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.10 **<u>Section 409A</u>**. The Plan is intended to comply with Section 409A to the extent subject thereto, and, accordingly, to the maximum extent permitted, the Plan shall be interpreted and administered to be in compliance therewith. Any payments described in the Plan that are due within the "short-term deferral period" as defined in Section 409A shall not be treated as deferred compensation unless Applicable Laws require otherwise. Notwithstanding anything to the contrary in the Plan, to the extent required to avoid accelerated taxation and tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to the Plan during the six (6) month period immediately following the Participant's termination of Continuous Service shall instead be paid on the first payroll date after the six-month anniversary of the Participant's separation from service (or the Participant's death, if earlier). In the event that any provision of the Plan or an Award Agreement is determined by the Committee to not comply with the applicable requirements of Section 409A, the Committee shall have the authority to take such actions and to make such changes to the Plan or an Award Agreement as the Committee deems necessary to comply with such requirements, provided that no such action shall adversely affect any outstanding Award without the consent of the affected Participant Notwithstanding the foregoing, neither the Company nor the Committee shall have any obligation to take any action to prevent the assessment of any additional tax or penalty on any Participant under Section 409A and neither the Company nor the Committee will have any liability to any Participant for such tax or penalty.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.11 **<u>No Guarantee of Tax Consequences</u>**. Neither the Company, the Board, the Committee, nor any other person make any commitment or guarantee that any Federal, state, local, or foreign tax treatment will apply or be available to any Participant or any other person hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.12 **<u>Beneficiary Designation</u>**. Each Participant under the Plan may from time to time name any beneficiary or beneficiaries by whom any right under the Plan is to be exercised in case of such Participant's death. Each designation will revoke all prior designations by the same Participant, shall be in a form reasonably prescribed by the Committee and shall be effective only when filed by the Participant in writing with the Company during the Participant's lifetime.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.13 **<u>Expenses</u>**. The costs of administering the Plan shall be paid by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.14 **<u>Severability</u>**. If any of the provisions of the Plan or any Award Agreement is held to be invalid, illegal or unenforceable, whether in whole or in part, by any court of law in any jurisdiction, the remaining provisions hereof and thereof shall be severable and enforceable in accordance with their terms, and all provisions shall remain enforceable in any other jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.15 **<u>Plan Headings</u>**. The headings in the Plan are for purposes of convenience only and are not intended to define or limit the construction of the provisions hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.16 **<u>Non-Uniform Treatment</u>**. The Committee's determinations under the Plan need not be uniform and may be made by it selectively among Persons who are eligible to receive, or actually receive, Awards. Without limiting the generality of the foregoing, the Committee shall be entitled to make non-uniform and selective determinations, amendments and adjustments, and to enter into non-uniform and selective Award Agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.17 **<u>Construction</u>**. The following rules of construction will apply to the Plan: (a) the word "or" is disjunctive but not necessarily exclusive and (b) words in the singular include the plural, words in the plural include the singular, and words in the neuter gender include the masculine and feminine genders and words in the masculine or feminine genders include the opposite gender and the neuter gender. The headings of sections and subsections are included solely for convenience of reference, and if there is any conflict between such headings and the text of this Plan, the text shall control. All references to Sections herein are intended to be references to sections of this Plan, unless otherwise indicated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. **<u>Termination or Suspension of the Plan</u>**. The Plan shall terminate automatically on **December 31, 2032**. No Award shall be granted pursuant to the Plan after such date, but Awards theretofore granted may extend beyond that date. The Board may suspend or terminate the Plan at any earlier date pursuant to Section 10.1 hereof. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. **<u>Choice of Law</u>**. The validity, construction and effect of the Plan and any rules and regulations relating to the Plan shall be determined in accordance with the laws of the State of Georgia, other than its law respecting choice of laws, and applicable federal law. Venue shall be in, and subject to the jurisdiction of, the courts of the State of Georgia or a Federal Court located in the State of Georgia (as may be appropriate).

As adopted by the Board of Directors of Global Digital Holdings, Inc. on **December 12, 2022**; and as approved by the shareholders of Global Digital Holdings, Inc. on **December 12, 2022**.

## Exhibit 10.44

**Exhibit 10.44**

**QUMULUSAI, INC.**

**2026 EQUITY INCENTIVE PLAN**

**(Effective [**•**], 2026)**

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**Table of Contents**

1. Purpose of Plan. 1

2. Definitions. 1

3. Plan Administration. 6

4. Shares Available for Issuance. 8

5. Participation. 10

6. Options. 10

7. Stock Appreciation Rights. 12

8. Restricted Stock Awards, Restricted Stock Units and Deferred Stock Units. 13

9. Performance Awards. 14

10. Non-Employee Director Awards. 16

11. Other Stock-Based Awards. 16

12. Dividend Equivalents. 17

13. Effect of Termination of Employment or Other Service. 17

14. Payment of Withholding Taxes. 20

15. Change in Control. 21

16. Rights of Eligible Recipients and Participants; Transferability. 23

17. Securities Law and Other Restrictions. 24

18. Deferred Compensation; Compliance with Section 409A. 24

19. Amendment, Modification and Termination. 25

20. Substituted Awards. 26

21. Duration of this Plan. 26

22. Miscellaneous. 26

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**QUMULUSAI, INC.**<br> **2026 EQUITY INCENTIVE PLAN**

**(Effective [**•**], 2026)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Purpose of Plan</u>.

The purpose of the QumulusAI, Inc. 2026 Equity Incentive Plan (as may be amended from time to time, the "<u>Plan</u>") is to advance the interests of QumulusAI, Inc., a Georgia corporation, and any successor thereto as provided in Section 22.5 of this Plan (the "<u>Company</u>"), and its shareholders by enabling the Company and its Subsidiaries to attract and retain qualified individuals to perform services for the Company and its Subsidiaries, providing incentive compensation for such individuals that is linked to the growth and profitability of the Company and increases in shareholder value and aligning the interests of such individuals with the interests of shareholders through opportunities for equity participation in the Company. This Plan will become effective upon its approval by the Company's shareholders and will replace the Global Digital Holdings, Inc. 2022 Option Plan (as amended, the "<u>Prior Plan</u>"); <u>provided</u>, <u>however</u>, that awards outstanding under the Prior Plan as of the Effective Date will remain outstanding in accordance with their terms. After the Effective Date, no more grants of awards will be made under the Prior Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Definitions</u>.

The following terms will have the meanings set forth below, unless the context clearly otherwise requires. Terms defined elsewhere in this Plan will have the same meaning throughout this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 "<u>Adverse Action</u>" means any action or conduct by a Participant that the Committee, in its sole discretion, determines to be injurious, detrimental, prejudicial or adverse to the interests of the Company or any Subsidiary, including: (a) disclosing confidential information of the Company or any Subsidiary to any person not authorized by the Company or Subsidiary to receive it, (b) engaging, directly or indirectly, in any commercial activity that in the judgment of the Committee competes with the business of the Company or any Subsidiary or (c) interfering with the relationships of the Company or any Subsidiary and their respective Employees, independent contractors, customers, prospective customers and vendors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 "<u>Affiliate</u>" means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with, such Person where "control" will have the meaning given such term under Rule 405 of the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 "<u>Applicable Law</u>" means any applicable law, including without limitation, (a) provisions of the Code, the Securities Act, the Exchange Act and any rules or regulations thereunder; (b) corporate, securities, tax or other laws, statutes, rules, requirements or regulations, whether federal, state, local or foreign; and (c) rules of any securities exchange, national market system or automated quotation system on which the shares of Common Stock are listed, quoted or traded.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4 "<u>Award</u>" means, individually or collectively, an Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit, Deferred Stock Unit, Performance Award, Non-Employee Director Award, or Other Stock-Based Award, in each case granted to an Eligible Recipient pursuant to this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5 "<u>Award Agreement</u>" means either: (a) a written or electronic (as provided in Section 22.7) agreement entered into by the Company and a Participant setting forth the terms and provisions applicable to an Award granted under this Plan, including any amendment or modification thereof, or (b) a written or electronic (as provided in Section 22.7) statement issued by the Company to a Participant describing the terms and provisions of such an Award, including any amendment or modification thereof.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6 "<u>Board</u>" means the Board of Directors of the Company.

2.7 "<u>Broker Exercise Notice</u>" means a written notice pursuant to which a Participant, upon exercise of an Option, irrevocably instructs a broker or dealer to sell a sufficient number of shares of Common Stock or loan a sufficient amount of money to pay all or a portion of the exercise price of the Option and/or any related withholding tax obligations and remit such sums to the Company and directs the Company to deliver shares of Common Stock to be issued upon such exercise directly to such broker or dealer or its nominee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.8 "<u>Cause</u>" means, unless otherwise provided in an Award Agreement, (a) "Cause" as defined in any employment, consulting, severance or similar agreement between the Participant and the Company or one of its Subsidiaries or Affiliates (an "<u>Individual Agreement</u>"), or (b) if there is no such Individual Agreement or if it does not define Cause: (i) dishonesty, fraud, misrepresentation, embezzlement or deliberate injury or attempted injury, in each case related to the Company or any Subsidiary; (ii) any unlawful or criminal activity of a serious nature; (iii) any intentional and deliberate breach of a duty or duties that, individually or in the aggregate, are material in relation to the Participant's overall duties; (iv) any material breach by a Participant of any employment, service, confidentiality, non-compete or non-solicitation agreement entered into with the Company or any Subsidiary; or (v) before a Change in Control, such other events as will be determined by the Committee. Before a Change in Control, the Committee will, unless otherwise provided in an Individual Agreement, have the sole discretion to determine whether "Cause" exists with respect to subclauses (i), (ii), (iii), (iv) or (v) above, and its determination will be final.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.9 "<u>Change in Control</u>" means, unless otherwise provided in an Award Agreement or any Individual Agreement, and except as provided in Section 18, an event described in Section 15.1 of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.10 "<u>Code</u>" means the Internal Revenue Code of 1986, as amended. Any reference to a section of the Code herein will be deemed to include a reference to any applicable regulations thereunder and any successor or amended section of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11 "<u>Committee</u>" means the Board or, if the Board so delegates, the Compensation Committee of the Board or a subcommittee thereof, or any other committee delegated authority by the Board to administer this Plan. If the Board determines appropriate, such committee may be comprised solely of directors designated by the Board to administer this Plan who are (a) "non-employee directors" within the meaning of Rule 16b-3 under the Exchange Act, and (b) "independent directors" within the meaning of the rules of the Nasdaq Stock Market (or other applicable exchange or market on which the Common Stock may be traded or quoted). The members of the Committee will be appointed from time to time by and will serve at the discretion of the Board. Any action duly taken by the Committee will be valid and effective, whether or not the members of the Committee at the time of such action are later determined not to have satisfied the requirements of membership provided herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.12 "<u>Common Stock</u>" means the common stock of the Company, no par value per share, or the number and kind of shares of stock or other securities into which such Common Stock may be changed in accordance with Section 4.4 of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.13 "<u>Company</u>" means QumulusAI, Inc., a Georgia corporation, and any successor thereto as provided in Section 22.5 of this Plan.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.14 "<u>Consultant</u>" means a person engaged to provide consulting or advisory services (other than as an Employee or a Director) to the Company or any Subsidiary that: (a) are not in connection with the offer and sale of the Company's securities in a capital raising transaction and (b) do not directly or indirectly promote or maintain a market for the Company's securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.15 "<u>Deferred Stock Unit</u>" means a right granted to an Eligible Recipient pursuant to Section 8 of this Plan to receive shares of Common Stock (or the equivalent value in cash or other property if the Committee so provides) at a future time as determined by the Committee, or as determined by the Participant within guidelines established by the Committee in the case of voluntary deferral elections.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.16 "<u>Director</u>" means a member of the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.17 "<u>Disability</u>" means, unless otherwise provided in an Award Agreement, with respect to a Participant who is a party to an Individual Agreement, which agreement contains a definition of "disability" or "permanent disability" (or words of like import) for purposes of termination of employment thereunder by the Company, "disability" or "permanent disability" as defined in the most recent of such agreements; or in all other cases, means the disability of the Participant such as would entitle the Participant to receive disability income benefits pursuant to the long-term disability plan of the Company or Subsidiary then covering the Participant or, if no such plan exists or is applicable to the Participant, the permanent and total disability of the Participant within the meaning of Section 22(e)(3) of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.18 "<u>Dividend Equivalents</u>" has the meaning set forth in Section 3.2(l) of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.19 "<u>Effective Date</u>" means the date that this Plan is approved by the Company's shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.20 "<u>Eligible Recipients</u>" means all Employees, all Non-Employee Directors and all Consultants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.21 "<u>Employee</u>" means any individual performing services for the Company or a Subsidiary and designated as an employee of the Company or a Subsidiary on the payroll records thereof. An Employee will not include any individual during any period he or she is classified or treated by the Company or Subsidiary as an independent contractor, a consultant, or any employee of an employment, consulting or temporary agency or any other entity other than the Company or Subsidiary, without regard to whether such individual is subsequently determined to have been, or is subsequently retroactively reclassified as a common-law employee of the Company or Subsidiary during such period. An individual will not cease to be an Employee in the case of: (a) any leave of absence approved by the Company, or (b) transfers between locations of the Company or between the Company or any Subsidiaries. For purposes of Incentive Stock Options, no such leave may exceed ninety (90) days, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company or a Subsidiary, as applicable, is not so guaranteed, then three (3) months following the ninety-first (91st) day of such leave, any Incentive Stock Option held by a Participant will cease to be treated as an Incentive Stock Option and will be treated for tax purposes as a Non-Statutory Stock Option. Neither service as a Director nor payment of a Director's fee by the Company will be sufficient to constitute "employment" by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.22 "<u>Exchange Act</u>" means the Securities Exchange Act of 1934, as amended. Any reference to a section of the Exchange Act herein will be deemed to include a reference to any applicable rules and regulations thereunder and any successor or amended section of the Exchange Act.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.23 "<u>Fair Market Value</u>" means, with respect to the Common Stock, as of any date a price that is based on the opening, closing, actual, high, low, or average selling prices of a share of Common Stock as reported on the Nasdaq Stock Market or other established stock exchange (or exchanges) or if the Common Stock is not so listed, admitted to unlisted trading privileges or reported on any national exchange, then as reported by the OTC Bulletin Board, OTC Markets or other comparable quotation service, on the applicable date, the preceding trading day, the next succeeding trading day, or an average of trading days that is within thirty (30) days before or after the applicable valuation date, as determined by the Committee in its discretion, provided that with respect to establishing the exercise price of an Option or Stock Appreciation Right, the Committee shall irrevocably commit to grant such Award prior to the period during which the Fair Market Value is determined. Unless the Committee determines otherwise, Fair Market Value shall be deemed to be equal to the closing sale price of the Common Stock as of the immediately preceding trading date at the end of the regular trading session, as reported by the Nasdaq Stock Market or any national securities exchange on which the Common Stock is then listed (or, if no shares were traded on such date, as of the next preceding date on which there was such a trade) or if the Common Stock is not so listed, admitted to unlisted trading privileges or reported on any national exchange, the closing sale price as of the immediately preceding trading date at the end of the regular trading session, as reported by the OTC Bulletin Board, OTC Markets or other comparable quotation service (or, if no shares were traded or quoted on such date, as of the next preceding date on which there was such a trade or quote). In the event the Common Stock is not publicly traded at the time a determination of its value is required to be made hereunder, the determination of Fair Market Value shall be made by the Committee in such manner as it deems appropriate and in good faith in the exercise of its reasonable discretion, and consistent with the definition of "fair market value" under Section 409A of the Code. If determined by the Committee, such determination will be final, conclusive and binding for all purposes and on all persons, including the Company, the shareholders of the Company, the Participants and their respective successors-in-interest. No member of the Committee will be liable for any determination regarding the fair market value of the Common Stock that is made in good faith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.24 "<u>Grant Date</u>" means the date an Award is granted to a Participant pursuant to this Plan and as determined pursuant to Section 5 of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.25 " <u>Incentive Stock Option</u>" means a right to purchase shares of Common Stock granted to an Employee pursuant to Section 6 of this Plan that is designated as and intended to meet the requirements of an "incentive stock option" within the meaning of Section 422 of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.26 "<u>Individual Agreement</u>" has the meaning set forth in Section 2.8 of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.27 "<u>Initial Share Pool</u>" has the meaning set forth in Section 4.1 of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.28 "<u>Non-Employee Director</u>" means a Director who is not an Employee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.29 "<u>Non-Employee Director Award</u>" means any Award granted, whether singly, in combination, or in tandem, to an Eligible Recipient who is a Non-Employee Director, pursuant to such applicable terms, conditions and limitations as the Board or Committee may establish in accordance with this Plan, including any Non-Employee Director Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.30 "<u>Non-Employee Director Option</u>" means a Non-Statutory Stock Option granted to a Non-Employee Director pursuant to Section 10 of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.31 "<u>Non-Statutory Stock Option</u>" means a right to purchase Common Stock granted to an Eligible Recipient pursuant to Section 6 of this Plan that is not intended to meet the requirements of or does not qualify as an Incentive Stock Option.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.32 "<u>Option</u>" means an Incentive Stock Option or a Non-Statutory Stock Option, including a Non-Employee Director Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.33 "<u>Other Stock-Based Award</u>" means an Award, denominated in Shares, not otherwise described by the terms of this Plan, granted pursuant to Section 11 of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.34 "<u>Participant</u>" means an Eligible Recipient who receives one or more Awards under this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.35 "<u>Performance Award</u>" means a right granted to an Eligible Recipient pursuant to Section 9 of this Plan to receive an amount of cash, a number of shares of Common Stock, or a combination of both, contingent upon and the value of which at the time it is payable is determined as a function of the extent of the achievement of one or more Performance Goals during a specified Performance Period or the achievement of other objectives during a specified period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.36 "<u>Performance Goals</u>" means with respect to any applicable Award, one or more targets, goals or levels of attainment required to be achieved during the specified Performance Period, as set forth in the related Award Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.37 "<u>Performance Period</u>" means the period of time, as determined by the Committee, during which the Performance Goals must be met in order to determine the degree of payout or vesting with respect to an Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.38 "<u>Period of Restriction</u>" means the period when a Restricted Stock Award or Restricted Stock Units are subject to a substantial risk of forfeiture (based on the passage of time, the achievement of Performance Goals, or upon the occurrence of other events as determined by the Committee, in its discretion), as provided in Section 8 of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.39 "<u>Person</u>" means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, governmental authority or any other entity of whatever nature.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.40 "<u>Plan</u>" means the QumulusAI, Inc. 2026 Equity Incentive Plan, as may be amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.41 "<u>Plan Year</u>" means the Company's fiscal year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.42 "<u>Previously Acquired Shares</u>" means shares of Common Stock that are already owned by the Participant or, with respect to any Award, that are to be issued to the Participant upon the grant, exercise, vesting or settlement of such Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.43 "<u>Prior Plan</u>" means the Global Digital Holdings, Inc. 2022 Option Plan, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.44 "<u>Restricted Stock Award</u>" means an award of Common Stock granted to an Eligible Recipient pursuant to Section 8 of this Plan that is subject to the restrictions on transferability and the risk of forfeiture imposed by the provisions of such Section 8.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.45 "<u>Restricted Stock Unit</u>" means an award denominated in shares of Common Stock granted to an Eligible Recipient pursuant to Section 8 of this Plan.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.46 "<u>Retirement</u>," means, unless otherwise defined in the Award Agreement or in an Individual Agreement between the Participant and the Company or one of its Subsidiaries or Affiliates, "Retirement" as defined from time to time for purposes of this Plan by the Committee or by the Company's chief human resources officer or other person performing that function or, if not so defined, means voluntary termination of employment or service by the Participant on or after the date the Participant reaches age fifty-five (55) with the present intention to leave the Company's industry or to leave the general workforce.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.47 "<u>Securities Act</u>" means the Securities Act of 1933, as amended. Any reference to a section of the Securities Act herein will be deemed to include a reference to any applicable rules and regulations thereunder and any successor or amended section of the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.48 "<u>Stock Appreciation Right</u>" means a right granted to an Eligible Recipient pursuant to Section 7 of this Plan to receive, upon exercise, a payment from the Company in the form of shares of Common Stock, cash or a combination of both, equal to the difference between the Fair Market Value of one or more shares of Common Stock and the grant price of such shares under the terms of such Stock Appreciation Right.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.49 "<u>Stock-Based Award</u>" means any Award, denominated in Shares, made pursuant to this Plan, including Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Deferred Stock Units, Performance Awards or Other Stock-Based Awards.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.50 "<u>Subsidiary</u>" means any corporation or other entity, whether domestic or foreign, in which the Company has or obtains, directly or indirectly, an interest of more than fifty percent (50%) by reason of stock ownership or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.51 "<u>Tax Date</u>" means the date any withholding or employment related tax obligation arises under the Code or any Applicable Law for a Participant with respect to an Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.52 "<u>Tax Laws</u>" has the meaning set forth in Section 22.9 of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Plan Administration</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 <u>The Committee</u>. The Plan will be administered by the Committee. The Committee will act by majority approval of the members at a meeting or by unanimous written consent, and a majority of the members of the Committee will constitute a quorum. The Committee may exercise its duties, power and authority under this Plan in its sole discretion without the consent of any Participant or other party, unless this Plan specifically provides otherwise. The Committee will not be obligated to treat Participants or Eligible Recipients uniformly, and determinations made under this Plan may be made by the Committee selectively among Participants or Eligible Recipients, whether or not such Participants and Eligible Recipients are similarly situated. Each determination, interpretation or other action made or taken by the Committee pursuant to the provisions of this Plan will be final, conclusive and binding for all purposes and on all persons, and no member of the Committee will be liable for any action or determination made in good faith with respect to this Plan or any Award granted under this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 <u>Authority of the Committee</u>. In accordance with and subject to the provisions of this Plan, the Committee will have full and exclusive discretionary power and authority to take such actions as it deems necessary and advisable with respect to the administration of this Plan, including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) To designate the Eligible Recipients to be selected as Participants;

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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;(b) To determine the nature, extent and terms of the Awards to be made to each Participant, including the amount of cash or number of shares of Common Stock to be subject to each Award, any exercise price or grant price, the manner in which Awards will vest, become exercisable, settled or paid out and whether Awards will be granted in tandem with other Awards, and the form of Award Agreement, if any, evidencing such Award;

&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) To determine the time or times when Awards will be granted;

&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) To determine the duration of each Award;

&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) To determine the terms, restrictions and other conditions to which the grant of an Award or the payment or vesting of Awards may be subject;

&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) To construe and interpret this Plan and Awards granted under it, and to establish, amend and revoke rules and regulations for its administration and in so doing, to correct any defect, omission, or inconsistency in this Plan or in an Award Agreement, in a manner and to the extent it will deem necessary or expedient to make this Plan fully effective;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) To determine Fair Market Value in accordance with Section 2.23 of this Plan;

&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) To amend this Plan or any Award Agreement, as provided in this Plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) To adopt subplans or special provisions applicable to Awards regulated by the laws of a jurisdiction other than, and outside of, the United States, which except as otherwise provided in this Plan, such subplans or special provisions may take precedence over other provisions of this Plan;

&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) To authorize any person to execute on behalf of the Company any Award Agreement or any other instrument required to effect the grant of an Award previously granted by the Committee;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) To determine whether Awards will be settled in shares of Common Stock, cash or in any combination thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) To determine whether Awards will be adjusted for dividend equivalents, with "Dividend Equivalents" meaning a credit, made at the discretion of the Committee, to the account of a Participant in an amount equal to the cash dividends paid on one share of Common Stock for each share of Common Stock represented by an Award held by such Participant, subject to Section 12 of this Plan and any other provision of this Plan, and which Dividend Equivalents may be subject to the same conditions and restrictions as the Awards to which they attach and may be settled in the form of cash, shares of Common Stock, or in any combination of both; 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;(m) To impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any resales by a Participant or other subsequent transfers by the Participant of any shares of Common Stock, including restrictions under an insider trading policy, stock ownership guidelines, restrictions as to the use of a specified brokerage firm for such resales or other transfers and other restrictions designed to increase equity ownership by Participants or otherwise align the interests of Participants with the Company's shareholders.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 <u>Delegation</u>. To the extent permitted by Applicable Law, the Committee may delegate to one or more of its members or to one or more officers of the Company or any Subsidiary or to one or more agents or advisors such administrative duties or powers as it may deem advisable, and the Committee or any individuals to whom it has delegated duties or powers as aforesaid may employ one or more individuals to render advice with respect to any responsibility the Committee or such individuals may have under this Plan. The Committee may, by resolution, authorize one or more directors of the Company or one or more officers of the Company to do one or both of the following on the same basis as can the Committee: (a) designate Eligible Recipients to be recipients of Awards pursuant to this Plan; and (b) determine the size of any such Awards; <u>provided</u>, <u>however</u>, that (x) the Committee will not delegate such responsibilities to any such director(s) or officer(s) for any Awards granted to an Eligible Recipient: (i) who is a Non-Employee Director or who is subject to the reporting and liability provisions of Section 16 under the Exchange Act, or (ii) to whom authority to grant or amend Awards has been delegated hereunder; <u>provided</u>, <u>further</u>; that any delegation of administrative authority will only be permitted to the extent it is permissible under Applicable Law; (y) the resolution providing such authorization will set forth the type of Awards and total number of each type of Awards such director(s) or officer(s) may grant; and (z) such director(s) or officer(s) will report periodically to the Committee regarding the nature and scope of the Awards granted pursuant to the authority delegated. At all times, the delegate appointed under this Section 3.3 will serve in such capacity at the pleasure of the Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4 <u>No Re-pricing</u>. Notwithstanding any other provision of this Plan other than Section 4.4 of this Plan, the Committee may not, without prior approval of the Company's shareholders, seek to effect any re-pricing of any previously granted, "underwater" Option or Stock Appreciation Right by: (a) amending or modifying the terms of the Option or Stock Appreciation Right to lower the exercise price or grant price; (b) canceling the underwater Option or Stock Appreciation Right in exchange for (i) cash; (ii) replacement Options or Stock Appreciation Rights having a lower exercise price or grant price; or (iii) other Awards; or (c) repurchasing the underwater Options or Stock Appreciation Rights and granting new Awards under this Plan. For purposes of this Section 3.4, an Option or Stock Appreciation Right will be deemed to be "underwater" at any time when the Fair Market Value of the Common Stock is less than the exercise price of the Option or grant price of the Stock Appreciation Right.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5 <u>Participants Based Outside of the United States</u>. In addition to the authority of the Committee under Section 3.2(i) and notwithstanding any other provision of this Plan, the Committee may, in its sole discretion, amend the terms of this Plan or Awards with respect to Participants resident outside of the United States or employed by a non-U.S. Subsidiary in order to comply with local legal requirements, to otherwise protect the Company's or Subsidiary's interests or to meet objectives of this Plan, and may, where appropriate, establish one or more sub-plans (including the adoption of any required rules and regulations) for the purposes of qualifying for preferred tax treatment under foreign tax laws. The Committee will have no authority, however, to take action pursuant to this Section 3.5: (a) to reserve shares of Common Stock or grant Awards in excess of the limitations provided in Section 4.1 of this Plan; (b) to effect any re-pricing in violation of Section 3.4 of this Plan; (c) to grant Options or Stock Appreciation Rights having an exercise price or grant price less than one hundred percent (100%) of the Fair Market Value of one share of Common Stock on the Grant Date in violation of Section 6.3 or Section 7.3 of this Plan; or (d) for which shareholder approval would then be required pursuant to Section 19.2 of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Shares Available for Issuance</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 <u>Maximum Number of Shares Available</u>. Subject to adjustment as provided in Section 4.4 of this Plan, the maximum number of shares of Common Stock that will be available for issuance under this Plan will be 4,770,000 shares of Common Stock (the "<u>Initial Share Pool</u>"). The Initial Share Pool will automatically increase on January 1<sup>st</sup> of each year from 2027 until 2036 by the lesser of (a) five percent (5%) of the number of shares of Common Stock outstanding as of the close of business on the immediately preceding December 31<sup>st</sup> and (b) the number of shares of Common Stock determined by the Board on or prior to such date for such year.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 <u>Limits on Incentive Stock Options and Non-Employee Director Compensation</u>. Notwithstanding any other provisions of this Plan to the contrary and subject to adjustment as provided in Section 4.4 of this Plan,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the maximum aggregate number of shares of Common Stock that will be available for issuance pursuant to Incentive Stock Options under this Plan will be 1,770,000 shares; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the sum of any cash compensation, or other compensation, and the value (determined as of the grant date in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor thereto) of Awards granted to a Non-Employee Director as compensation for services as a Non-Employee Director during any fiscal year of the Company may not exceed $400,000 (increased to $600,000 with respect to any Non-Employee Director serving as Chairman of the Board or Lead Independent Director or in the fiscal year of a non-employee Director's initial service as a Non-Employee Director) (with any compensation that is deferred counting towards this limit for the year in which the compensation is first earned, and not a later year of settlement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 <u>Accounting for Awards</u>. Shares of Common Stock that are issued under this Plan or that are subject to outstanding Awards will be applied to reduce the maximum number of shares of Common Stock remaining available for issuance under this Plan only to the extent they are used; <u>provided</u>, <u>however</u>, that the full number of shares of Common Stock subject to a stock-settled Stock Appreciation Right or other Stock-Based Award will be counted against the shares of Common Stock authorized for issuance under this Plan, regardless of the number of shares actually issued upon settlement of such Stock Appreciation Right or other Stock-Based Award. Furthermore, any shares of Common Stock withheld to satisfy tax withholding obligations on Awards issued under this Plan, any shares of Common Stock withheld to pay the exercise price or grant price of Awards under this Plan and any shares of Common Stock not issued or delivered as a result of the "net exercise" of an outstanding Option pursuant to Section 6.5 or settlement of a Stock Appreciation Right in shares of Common Stock pursuant to Section 7.7 will be counted against the shares of Common Stock authorized for issuance under this Plan and will not be available again for grant under this Plan. Shares of Common Stock subject to Awards settled in cash will again be available for issuance pursuant to Awards granted under the Plan. Any shares of Common Stock repurchased by the Company on the open market using the proceeds from the exercise of an Award will not increase the number of shares of Common Stock available for future grant of Awards. Any shares of Common Stock related to Awards granted under this Plan that terminate by expiration, forfeiture, cancellation or otherwise without the issuance of the shares of Common Stock will be available again for grant under this Plan. To the extent permitted by Applicable Law, shares of Common Stock issued in assumption of, or in substitution for, any outstanding awards of any entity acquired in any form of combination by the Company or a Subsidiary pursuant to Section 20 of this Plan or otherwise will not be counted against shares of Common Stock available for issuance pursuant to this Plan. The shares of Common Stock available for issuance under this Plan may be authorized and unissued shares or treasury shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 <u>Adjustments to Shares and Awards</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) In the event of any reorganization, merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split, combination of shares, rights offering, divestiture or extraordinary dividend (including a spin off) or any other similar change in the corporate structure or shares of Common Stock the Company, the Committee (or, if the Company is not the surviving corporation in any such transaction, the board of directors of the surviving corporation) will make appropriate adjustment or substitutions (which determination will be conclusive) as to: (i) the number and kind of securities or other property (including cash) available for issuance or payment under this Plan, including the sub-limits set forth in Section 4.2 of this Plan, and (ii) in order to prevent dilution or enlargement of the rights of Participants, the number and kind of securities or other property (including cash) subject to outstanding Awards and the exercise price of outstanding Awards; <u>provided</u>, <u>however</u>, that this Section 4.4 will not limit the authority of the Committee to take action pursuant to Section 15 of this Plan in the event of a Change in Control. The determination of the Committee as to the foregoing adjustments and/or substitutions, if any, will be final, conclusive and binding on Participants under this Plan.

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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;(b) Notwithstanding anything else herein to the contrary, without affecting the number of shares of Common Stock reserved or available hereunder, the limits in Section 4.2 of this Plan, the Committee may authorize the issuance or assumption of benefits under this Plan in connection with any merger, consolidation, acquisition of property or stock or reorganization upon such terms and conditions as it may deem appropriate, subject to compliance with the rules under Sections 422, 424 and 409A of the Code, as and where applicable.

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

Participants in this Plan will be those Eligible Recipients who, in the judgment of the Committee, have contributed, are contributing or are expected to contribute to the achievement of the objectives of the Company or its Subsidiaries. Eligible Recipients may be granted from time to time one or more Awards, singly or in combination or in tandem with other Awards, as may be determined by the Committee in its sole discretion. Awards will be deemed to be granted as of the date specified in the grant resolution of the Committee, which date will be the Grant Date of any related Award Agreement with the Participant.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 <u>Grant</u>. An Eligible Recipient may be granted one or more Options under this Plan, and such Options will be subject to such terms and conditions, consistent with the other provisions of this Plan, as may be determined by the Committee in its sole discretion. Incentive Stock Options may be granted solely to Eligible Recipients who are Employees of the Company or a Subsidiary. The Committee may designate whether an Option is to be considered an Incentive Stock Option or a Non-Statutory Stock Option. To the extent that any Incentive Stock Option (or portion thereof) granted under this Plan ceases for any reason to qualify as an "incentive stock option" for purposes of Section 422 of the Code, such Incentive Stock Option (or portion thereof) will continue to be outstanding for purposes of this Plan but will thereafter be deemed to be a Non-Statutory Stock Option. Options may be granted to an Eligible Recipient for services provided to a Subsidiary only if, with respect to such Eligible Recipient, the underlying shares of Common Stock constitute "service recipient stock" within the meaning of Treas. Reg. Sec. 1.409A-1(b)(5)(iii) promulgated under the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 <u>Award Agreement</u>. Each Option grant will be evidenced by an Award Agreement that will specify the exercise price of the Option, the maximum duration of the Option, the number of shares of Common Stock to which the Option pertains, the conditions upon which an Option will become vested and exercisable, and such other provisions as the Committee will determine which are not inconsistent with the terms of this Plan. The Award Agreement also will specify whether the Option is intended to be an Incentive Stock Option or a Non-Statutory Stock Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 <u>Exercise Price</u>. The per share price to be paid by a Participant upon exercise of an Option granted pursuant to this Section 6 will be determined by the Committee in its sole discretion at the time of the Option grant; <u>provided</u>, <u>however</u>, that such price will not be less than one hundred percent (100%) of the Fair Market Value of one share of Common Stock on the Grant Date (one hundred and ten percent (110%) of the Fair Market Value if, at the time the Incentive Stock Option is granted, the Participant owns, directly or indirectly, more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any parent or subsidiary corporation of the Company).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4 <u>Exercisability and Duration</u>. An Option will become exercisable at such times and in such installments and upon such terms and conditions as may be determined by the Committee in its sole discretion at the time of grant, including (a) the achievement of one or more of the Performance Goals; or that (b) the Participant remain in the continuous employment or service with the Company or a Subsidiary for a certain period; <u>provided</u>, <u>however</u>, that no Option may be exercisable after ten (10) years from the Grant Date (five (5) years from the Grant Date in the case of an Incentive Stock Option that is granted to a Participant who owns, directly or indirectly, more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any parent or subsidiary corporation of the Company). Notwithstanding the foregoing, if the exercise of an Option that is exercisable in accordance with its terms is prevented by the provisions of Section 17 of this Plan, the Option will remain exercisable until thirty (30) days after the date such exercise first would no longer be prevented by such provisions, but in any event no later than the expiration date of such Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5 <u>Payment of Exercise Price</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The total purchase price of the shares of Common Stock to be purchased upon exercise of an Option will be paid entirely in cash (including check, bank draft or money order); <u>provided</u>, <u>however</u>, that the Committee, in its sole discretion and upon terms and conditions established by the Committee, may allow such payments to be made, in whole or in part, by (i) tender of a Broker Exercise Notice; (ii) tender, either by actual delivery or attestation as to ownership, of Previously Acquired Shares; (iii) a "net exercise" of the Option (as further described in paragraph (b), below); (iv) a combination of such methods; or (v) any other method approved or accepted by the Committee in its sole discretion. Notwithstanding any other provision of this Plan to the contrary, no Participant who is a Director or an "executive officer" of the Company within the meaning of Section 13(k) of the Exchange Act will be permitted to make payment with respect to any Awards granted under this Plan, or continue any extension of credit with respect to such payment with a loan from the Company or a loan arranged by the Company in violation of Section 13(k) of the Exchange Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In the case of a "net exercise" of an Option, the Company will not require a payment of the exercise price of the Option from the Participant but will reduce the number of shares of Common Stock issued upon the exercise by the largest number of whole shares that has a Fair Market Value on the exercise date that does not exceed the aggregate exercise price for the shares exercised under this method. Shares of Common Stock will no longer be outstanding under an Option (and will therefore not thereafter be exercisable) following the exercise of such Option to the extent of (i) shares used to pay the exercise price of an Option under the "net exercise," (ii) shares actually delivered to the Participant as a result of such exercise and (iii) any shares withheld for purposes of tax withholding pursuant to Section 14 of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) For purposes of such payment, Previously Acquired Shares tendered or covered by an attestation will be valued at their Fair Market Value on the exercise date of the Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6 <u>Manner of Exercise</u>. An Option may be exercised by a Participant in whole or in part from time to time, subject to the conditions contained in this Plan and in the Award Agreement evidencing such Option, by delivery in person, by facsimile or electronic transmission or through the mail of written notice of exercise to the Company at its principal executive office (or to the Company's designee as may be established from time to time by the Company and communicated to Participants) and by paying in full the total exercise price for the shares of Common Stock to be purchased in accordance with Section 6.5 of this Plan.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Stock Appreciation Rights</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 <u>Grant</u>. An Eligible Recipient may be granted one or more Stock Appreciation Rights under this Plan, and such Stock Appreciation Rights will be subject to such terms and conditions, consistent with the other provisions of this Plan, as may be determined by the Committee in its sole discretion. Stock Appreciation Rights may be granted to an Eligible Recipient for services provided to a Subsidiary only if, with respect to such Eligible Recipient, the underlying shares of Common Stock constitute "service recipient stock" within the meaning of Treas. Reg. Sec. 1.409A-1(b)(5)(iii) promulgated under the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 <u>Award Agreement</u>. Each Stock Appreciation Right will be evidenced by an Award Agreement that will specify the grant price of the Stock Appreciation Right, the term of the Stock Appreciation Right, and such other provisions as the Committee will determine which are not inconsistent with the terms of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 <u>Grant Price</u>. The grant price of a Stock Appreciation Right will be determined by the Committee, in its discretion, at the Grant Date; <u>provided</u>, <u>however</u>, that such price may not be less than one hundred percent (100%) of the Fair Market Value of one share of Common Stock on the Grant Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4 <u>Exercisability and Duration</u>. A Stock Appreciation Right will become exercisable at such times and in such installments as may be determined by the Committee in its sole discretion at the time of grant; <u>provided</u>, <u>however</u>, that no Stock Appreciation Right may be exercisable after ten (10) years from its Grant Date. Notwithstanding the foregoing, if the exercise of a Stock Appreciation Right that is exercisable in accordance with its terms is prevented by the provisions of Section 17 of this Plan, the Stock Appreciation Right will remain exercisable until thirty (30) days after the date such exercise first would no longer be prevented by such provisions, but in any event no later than the expiration date of such Stock Appreciation Right.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5 <u>Manner of Exercise</u>. A Stock Appreciation Right will be exercised by giving notice in the same manner as for Options, as set forth in Section 6.6 of this Plan, subject to any other terms and conditions consistent with the other provisions of this Plan as may be determined by the Committee in its sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.6 <u>Settlement</u>. Upon the exercise of a Stock Appreciation Right, a Participant will be entitled to receive payment from the Company in an amount determined by multiplying:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The excess of the Fair Market Value of a share of Common Stock on the date of exercise over the per share grant price; by

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The number of shares of Common Stock with respect to which the Stock Appreciation Right is exercised.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.7 <u>Form of Payment</u>. Payment, if any, with respect to a Stock Appreciation Right settled in accordance with Section 7.6 of this Plan will be made in accordance with the terms of the applicable Award Agreement, in cash, shares of Common Stock or a combination thereof, as the Committee determines.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Restricted Stock Awards, Restricted Stock Units and Deferred Stock Units</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 <u>Grant</u>. An Eligible Recipient may be granted one or more Restricted Stock Awards, Restricted Stock Units or Deferred Stock Units under this Plan, and such Awards will be subject to such terms and conditions, consistent with the other provisions of this Plan, as may be determined by the Committee in its sole discretion. Restricted Stock Units and Deferred Stock Units will be similar to Restricted Stock Awards except that no shares of Common Stock are actually awarded to the Participant on the Grant Date of the Restricted Stock Units. Restricted Stock Units and Deferred Stock Units will be denominated in shares of Common Stock but paid in cash, shares of Common Stock or a combination of cash and shares of Common Stock as the Committee, in its sole discretion, will determine, and as provided in the Award Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 <u>Award Agreement</u>. Each Restricted Stock Award, Restricted Stock Unit or Deferred Stock Unit grant will be evidenced by an Award Agreement that will specify the type of Award, the period(s) of restriction, the number of shares of restricted Common Stock, or the number of Restricted Stock Units or Deferred Stock Units granted, and such other provisions as the Committee will determine that are not inconsistent with the terms of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3 <u>Conditions and Restrictions</u>. Subject to the terms and conditions of this Plan, the Committee will impose such conditions or restrictions on a Restricted Stock Award, Restricted Stock Units or Deferred Stock Units granted pursuant to this Plan as it may deem advisable including a requirement that Participants pay a stipulated purchase price for each share of Common Stock underlying a Restricted Stock Award, Restricted Stock Unit or Deferred Stock Unit, restrictions based upon the achievement of specific Performance Goals, time-based restrictions on vesting following the attainment of the Performance Goals, time-based restrictions, restrictions under Applicable Laws or holding requirements or sale restrictions placed on the shares of Common Stock by the Company upon vesting of such Restricted Stock Award, Restricted Stock Units or Deferred Stock Units.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4 <u>Voting Rights</u>. Unless otherwise determined by the Committee and set forth in a Participant's Award Agreement, to the extent permitted or required by Applicable Law, as determined by the Committee, Participants holding a Restricted Stock Award granted hereunder will be granted the right to exercise full voting rights with respect to the shares of Common Stock underlying such Restricted Stock Award during the Period of Restriction. A Participant will have no voting rights with respect to any Restricted Stock Units or Deferred Stock Units granted hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.5 <u>Dividend Rights</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Unless otherwise determined by the Committee and set forth in a Participant's Award Agreement, to the extent permitted or required by Applicable Law, as determined by the Committee, Participants holding a Restricted Stock Award granted hereunder will have the same dividend rights as the Company's other shareholders. Notwithstanding the foregoing any such dividends as to a Restricted Stock Award that is subject to vesting requirements will be subject to forfeiture and termination to the same extent as the Restricted Stock Award to which such dividends relate and the Award Agreement may require that any cash dividends be reinvested in additional shares of Common Stock subject to the Restricted Stock Award and subject to the same conditions and restrictions as the Restricted Stock Award with respect to which the dividends were paid. In no event will dividends with respect to Restricted Stock Awards that are subject to vesting be paid or distributed until the vesting provisions of such Restricted Stock Award lapse.

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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;(b) Unless otherwise determined by the Committee and set forth in a Participant's Award Agreement, to the extent permitted or required by Applicable Law, as determined by the Committee, prior to settlement or forfeiture, any Restricted Stock Units or Deferred Stock Unit awarded under this Plan may, at the Committee's discretion, carry with it a right to Dividend Equivalents. Such right entitles the Participant to be credited with an amount equal to all cash dividends paid on one share of Common Stock while the Restricted Stock Unit or Deferred Stock Unit is outstanding. Dividend Equivalents may be converted into additional Restricted Stock Units or Deferred Stock Units and may (and will, to the extent required below) be made subject to the same conditions and restrictions as the Restricted Stock Units or Deferred Stock Units to which they attach. Settlement of Dividend Equivalents may be made in the form of cash, in the form of shares of Common Stock, or in a combination of both. Dividend Equivalents as to Restricted Stock Units or Deferred Stock Units will be subject to forfeiture and termination to the same extent as the corresponding Restricted Stock Units or Deferred Stock Units as to which the Dividend Equivalents relate. In no event will Participants holding Restricted Stock Units or Deferred Stock Units be entitled to receive any Dividend Equivalents on such Restricted Stock Units or Deferred Stock Units until the vesting provisions of such Restricted Stock Units or Deferred Stock Units lapse.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.6 <u>Enforcement of Restrictions on Restricted Stock Awards</u>. To enforce the restrictions referred to in this Section 8, the Committee may place a legend on the stock certificates or book-entry notations representing Restricted Stock Awards referring to such restrictions and may require the Participant, until the restrictions have lapsed, to keep the stock certificates, together with duly endorsed stock powers, in the custody of the Company or its transfer agent, or to maintain evidence of stock ownership, together with duly endorsed stock powers, in a certificateless book-entry stock account with the Company's transfer agent. Alternatively, Restricted Stock Awards may be held in non-certificated form pursuant to such terms and conditions as the Company may establish with its registrar and transfer agent or any third-party administrator designated by the Company to hold Restricted Stock Awards on behalf of Participants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.7 <u>Lapse of Restrictions; Settlement</u>. Except as otherwise provided in this Plan, including without limitation this Section 8 and 16.4 of this Plan, shares of Common Stock underlying a Restricted Stock Award will become freely transferable by the Participant after all conditions and restrictions applicable to such shares have been satisfied or lapse (including satisfaction of any applicable tax withholding obligations). Upon the vesting of a Restricted Stock Unit, the Restricted Stock Unit will be settled, subject to the terms and conditions of the applicable Award Agreement, (a) in cash, based upon the Fair Market Value of the vested underlying shares of Common Stock, (b) in shares of Common Stock or (c) a combination thereof, as provided in the Award Agreement, except to the extent that a Participant has properly elected to defer income that may be attributable to a Restricted Stock Unit under a Company deferred compensation plan or arrangement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.8 <u>Section 83(b) Election for Restricted Stock Award</u>. If a Participant makes an election pursuant to Section 83(b) of the Code with respect to a Restricted Stock Award, the Participant must file, within thirty (30) days following the Grant Date of the Restricted Stock Award, a copy of such election with the Company and with the Internal Revenue Service, in accordance with the regulations under Section 83 of the Code. The Committee may provide in the Award Agreement that the Restricted Stock Award is conditioned upon the Participant's making or refraining from making an election with respect to the award under Section 83(b) of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Performance Awards.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1 <u>Grant</u>. An Eligible Recipient may be granted one or more Performance Awards under this Plan, and such Awards will be subject to such terms and conditions, consistent with the other provisions of this Plan, as may be determined by the Committee in its sole discretion, including the achievement of one or more Performance Goals.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2 <u>Award Agreement</u>. Each Performance Award will be evidenced by an Award Agreement that will specify the amount of cash, shares of Common Stock, other Awards, or combination of both to be received by the Participant upon payout of the Performance Award, any Performance Goals upon which the Performance Award is subject, any Performance Period during which any Performance Goals must be achieved and such other provisions as the Committee will determine which are not inconsistent with the terms of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3 <u>Vesting</u>. Subject to the terms of this Plan, the Committee may impose such restrictions or conditions, not inconsistent with the provisions of this Plan, to the vesting of such Performance Awards as it deems appropriate, including the achievement of one or more of the Performance Goals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4 <u>Earning of Performance Award Payment</u>. Subject to the terms of this Plan and the Award Agreement, after the applicable Performance Period has ended, the holder of Performance Awards will be entitled to receive payout on the value and number of Performance Awards earned by the Participant over the Performance Period, to be determined as a function of the extent to which the corresponding Performance Goals have been achieved and such other restrictions or conditions imposed on the vesting and payout of the Performance Awards has been satisfied.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.5 <u>Form and Timing of Performance Award Payment</u>. Subject to the terms of this Plan, after the applicable Performance Period has ended, the holder of Performance Awards will be entitled to receive payment on the value and number of Performance Awards earned by the Participant over the Performance Period, to be determined as a function of the extent to which the corresponding Performance Goals have been achieved. Payment of earned Performance Awards will be as determined by the Committee and as evidenced in the Award Agreement. Subject to the terms of this Plan, the Committee, in its sole discretion, may pay earned Performance Awards in the form of cash, in shares of Common Stock or other Awards (or in a combination thereof) equal to the value of the earned Performance Awards at the close of the applicable Performance Period. Payment of any Performance Award will be made as soon as practicable after the Committee has determined the extent to which the applicable Performance Goals have been achieved and not later than the fifteenth (15<sup>th</sup>) day of the third (3<sup>rd</sup>) month immediately following the later of the end of the Company's fiscal year in which the Performance Period ends and any additional vesting restrictions are satisfied or the end of the calendar year in which the Performance Period ends and any additional vesting restrictions are satisfied, except to the extent that a Participant has properly elected to defer payment that may be attributable to a Performance Award under a Company deferred compensation plan or arrangement. The determination of the Committee with respect to the form and time of payment of Performance Awards will be set forth in the Award Agreement pertaining to the grant of the Performance Award. Any shares of Common Stock or other Awards issued in payment of earned Performance Awards may be granted subject to any restrictions deemed appropriate by the Committee, including that the Participant remain in the continuous employment or service with the Company or a Subsidiary for a certain period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.6 <u>Evaluation of Performance</u>. The Committee may provide in any such Award Agreement including Performance Goals that any evaluation of performance may include or exclude any of the following events that occurs during a Performance Period: (a) items related to a change in accounting principles; (b) items relating to financing activities; (c) expenses for restructuring or productivity initiatives; (d) other non-operating items; (e) items related to acquisitions; (f) items attributable to the business operations of any entity acquired by the Company during the Performance Period; (g) items related to the disposal of a business or segment of a business; (h) items related to discontinued operations that do not qualify as a segment of a business under applicable accounting standards; (i) items attributable to any stock dividend, stock split, combination or exchange of stock occurring during the Performance Period; (j) any other items of significant income or expense which are determined to be appropriate adjustments; (k) items relating to unusual or extraordinary corporate transactions, events or developments; (l) items related to amortization of acquired intangible assets; (m) items that are outside the scope of the Company's core, on-going business activities; (n) items related to acquired in-process research and development; (o) items relating to changes in tax laws; (p) items relating to major licensing or partnership arrangements; (q) items relating to asset impairment charges; (r) items relating to gains or losses for litigation, arbitration and contractual settlements; (s) foreign exchange gains and losses; or (t) items relating to any other unusual or nonrecurring events or changes in applicable laws, accounting principles or business conditions.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.7 <u>Adjustment of Performance Goals, Performance Periods or other Vesting Criteria</u>. The Committee may amend or modify the vesting criteria (including any Performance Goals or Performance Periods) of any outstanding Awards based in whole or in part on the financial performance of the Company (or any Subsidiary or division, business unit or other sub-unit thereof) in recognition of unusual or nonrecurring events (including the events described in Sections 9.6 or 4.4(a) of this Plan) affecting the Company or the financial statements of the Company or of changes in applicable laws, regulations or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent unintended dilution or enlargement of the benefits or potential benefits intended to be made available under this Plan. The determination of the Committee as to the foregoing adjustments, if any, will be final, conclusive and binding on Participants under this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.8 <u>Committee Discretion to Make Adjustments</u>. Subject to the terms of an Individual Agreement, the Committee retains the discretion to adjust Awards either upward or downward, either on a formula or discretionary basis or any combination, as the Committee determines.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.9 <u>Dividend Rights</u>. Participants holding Performance Awards granted under this Plan will not receive any cash dividends or Dividend Equivalents based on the dividends declared on shares of Common Stock that are subject to such Performance Awards during the period between the date that such Performance Awards are granted and the date such Performance Awards are settled.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>Non-Employee Director Awards</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1 <u>Automatic and Non-Discretionary Awards to Non-Employee Directors</u>. Subject to such terms and conditions, consistent with the other provisions of this Plan, the Committee at any time and from time to time may approve resolutions providing for the automatic grant to Non-Employee Directors of Non-Employee Director Awards granted under this Plan and may grant to Non-Employee Directors such discretionary Non-Employee Director Awards on such terms and conditions, consistent with the other provisions of this Plan, as may be determined by the Committee in its sole discretion, and set forth in an applicable Award Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2 <u>Deferral of Award Payment; Election to Receive Award in Lieu of Retainers</u>. The Committee may permit Non-Employee Directors the opportunity to defer the payment of an Award pursuant to such terms and conditions as the Committee may prescribe from time to time. In addition, the Committee may permit Non-Employee Directors to elect to receive, pursuant to the procedures established by the Board or a committee of the Board, all or any portion of their annual retainers, meeting fees, or other fees in Restricted Stock, Restricted Stock Units, Deferred Stock Units or other Stock-Based Awards as contemplated by this Plan in lieu of cash.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>Other Stock-Based Awards</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1 <u>Other Stock-Based Awards</u>. Subject to such terms and conditions, consistent with the other provisions of this Plan, as may be determined by the Committee in its sole discretion, the Committee may grant Other Stock-Based Awards to Eligible Recipients not otherwise described by the terms of this Plan (including the grant or offer for sale of unrestricted shares of Common Stock) in such amounts and subject to such terms and conditions as the Committee will determine. Such Awards may involve the transfer of actual shares of Common Stock to Participants as a bonus or in lieu of obligations to pay cash or deliver other property under this Plan or under other plans or compensatory arrangements, or payment in cash or otherwise of amounts based on the value of shares of Common Stock, and may include Awards designed to comply with or take advantage of the applicable local laws of jurisdictions other than the United States.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.2 <u>Value of Other Stock-Based Awards</u>. Each Other Stock-Based Award will be expressed in terms of shares of Common Stock or units based on shares of Common Stock, as determined by the Committee. The Committee may establish Performance Goals in its discretion for any Other Stock-Based Award. If the Committee exercises its discretion to establish Performance Goals for any such Awards, the number or value of Other Stock-Based Awards that will be paid out to the Participant will depend on the extent to which the Performance Goals are met.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.3 <u>Payment of Other Stock-Based Awards</u>. Payment, if any, with respect to an Other Stock-Based Award will be made in accordance with the terms of the Award, in cash or shares of Common Stock for any Other Stock-Based Award, as the Committee determines, except to the extent that a Participant has properly elected to defer payment that may be attributable to an Other Stock-Based Award under a Company deferred compensation plan or arrangement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u>Dividend Equivalents</u>.

Subject to the provisions of this Plan and any Award Agreement, any Participant selected by the Committee may be granted Dividend Equivalents based on the dividends declared on shares of Common Stock that are subject to any Award (including any Award that has been deferred), to be credited as of dividend payment dates, during the period between the date the Award is granted and the date the Award is exercised, vests, settles, is paid or expires, as determined by the Committee. Such Dividend Equivalents will be converted to cash or additional shares of Common Stock by such formula and at such time and subject to such limitations as may be determined by the Committee and the Committee may provide that such amounts (if any) will be deemed to have been reinvested in additional shares of Common Stock or otherwise reinvested. Notwithstanding the foregoing, the Committee may not grant Dividend Equivalents based on the dividends declared on shares of Common Stock that are subject to an Option or Stock Appreciation Right or unvested Performance Awards; and further, no dividends or Dividend Equivalents will be paid out with respect to any Awards until they are vested.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. <u>Effect of Termination of Employment or Other Service</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.1 <u>Termination Due to Cause</u>. Unless otherwise expressly provided by the Committee in its sole discretion in an Award Agreement or the terms of an Individual Agreement between the Participant and the Company or one of its Subsidiaries or Affiliates or a plan or policy of the Company applicable to the Participant specifically provides otherwise, and subject to Sections 13.4 and 13.5 of this Plan, in the event a Participant's employment or other service with the Company and all Subsidiaries is terminated for Cause:

&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) All outstanding Options and Stock Appreciation Rights held by the Participant as of the effective date of such termination will be immediately terminated and forfeited;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All outstanding but unvested Restricted Stock Awards, Restricted Stock Units, Performance Awards and Other Stock-Based Awards held by the Participant as of the effective date of such termination will be terminated and forfeited; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) All other outstanding Awards to the extent not vested will be immediately terminated and forfeited.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.2 <u>Termination Due to Death, Disability or Retirement</u>. Unless otherwise expressly provided by the Committee in its sole discretion in an Award Agreement between the Participant and the Company or one of its Subsidiaries or Affiliates or the terms of an Individual Agreement or a plan or policy of the Company applicable to the Participant specifically provides otherwise, and subject to Sections 13.4, 13.5 and 15 of this Plan, in the event a Participant's employment or other service with the Company and all Subsidiaries is terminated by reason of death or Disability of a Participant, or in the case of a Participant that is an Employee, Retirement:

&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) All outstanding Options (excluding Non-Employee Director Options in the case of Retirement) and Stock Appreciation Rights held by the Participant as of the effective date of such termination or Retirement will, to the extent exercisable as of the date of such termination or Retirement, remain exercisable for a period of one (1) year after the date of such termination or Retirement (but in no event after the expiration date of any such Option or Stock Appreciation Right) and Options and Stock Appreciation Rights not exercisable as of the date of such termination or Retirement will be terminated and forfeited;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All outstanding unvested Restricted Stock Awards held by the Participant as of the effective date of such termination or Retirement will be terminated and forfeited; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) All outstanding unvested Restricted Stock Units, Performance Awards, and Other Stock-Based Awards held by the Participant as of the effective date of such termination or Retirement will be terminated and forfeited; <u>provided</u>, <u>however</u>, that with respect to any such Awards the vesting of which is based on the achievement of Performance Goals, if a Participant's employment or other service with the Company or any Subsidiary, as the case may be, is terminated prior to the end of the Performance Period of such Award, but after the conclusion of a portion of the Performance Period (but in no event less than one year), the Committee may, in its sole discretion, cause shares of Common Stock to be delivered or payment made (except to the extent that a Participant has properly elected to defer income that may be attributable to such Award under a Company deferred compensation plan or arrangement) with respect to the Participant's Award, but only if otherwise earned for the entire Performance Period and only with respect to the portion of the applicable Performance Period completed at the date of such event, with proration based on the number of months or years that the Participant was employed or performed services during the Performance Period. The Committee will consider the provisions of Section 13.5 of this Plan and will have the discretion to consider any other fact or circumstance in making its decision as to whether to deliver such shares of Common Stock or other payment, including whether the Participant again becomes employed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.3 <u>Termination for Reasons Other than Death, Disability or Retirement</u>. Unless otherwise expressly provided by the Committee in its sole discretion in an Award Agreement or the terms of an Individual Agreement between the Participant and the Company or one of its Subsidiaries or Affiliates or a plan or policy of the Company applicable to the Participant specifically provides otherwise, and subject to Sections 13.4, 13.5 and 15 of this Plan, in the event a Participant's employment or other service with the Company and all Subsidiaries is terminated for any reason other than for Cause or death or Disability of a Participant, or in the case of a Participant that is an Employee, Retirement:

&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) All outstanding Options (including Non-Employee Director Options) and Stock Appreciation Rights held by the Participant as of the effective date of such termination will, to the extent exercisable as of such termination, remain exercisable for a period of three (3) months after such termination (but in no event after the expiration date of any such Option or Stock Appreciation Right) and Options and Stock Appreciation Rights not exercisable as of such termination will be terminated and forfeited. If the Participant dies within the three (3) month period referred to in the preceding sentence, the Option or Stock Appreciation Right may be exercised by those entitled to do so under the Participant's will or by the laws of descent and distribution within a period of one (1) year following the Participant's death (but in no event after the expiration date of any such Option or Stock Appreciation Right);

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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;(b) All outstanding unvested Restricted Stock Awards held by the Participant as of the effective date of such termination will be terminated and forfeited; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) All outstanding unvested Restricted Stock Units, Performance Awards, and Other Stock-Based Awards held by the Participant as of the effective date of such termination will be terminated and forfeited; <u>provided</u>, <u>however</u>, that with respect to any such Awards the vesting of which is based on the achievement of Performance Goals, if a Participant's employment or other service with the Company or any Subsidiary, as the case may be, is terminated by the Company without Cause prior to the end of the Performance Period of such Award, but after the conclusion of a portion of the Performance Period (but in no event less than one year), the Committee may, in its sole discretion, cause Shares to be delivered or payment made (except to the extent that a Participant has properly elected to defer income that may be attributable to such Award under a Company deferred compensation plan or arrangement) with respect to the Participant's Award, but only if otherwise earned for the entire Performance Period and only with respect to the portion of the applicable Performance Period completed at the date of such event, with proration based on the number of months or years that the Participant was employed or performed services during the Performance Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.4 <u>Modification of Rights upon Termination</u>. Notwithstanding the other provisions of this Section 13, upon a Participant's termination of employment or other service with the Company or any Subsidiary, as the case may be, the Committee may, in its sole discretion (which may be exercised at any time on or after the Grant Date, including following such termination) cause Options or Stock Appreciation Rights (or any part thereof) held by such Participant as of the effective date of such termination to terminate, become or continue to become exercisable or remain exercisable following such termination of employment or service, and Restricted Stock, Restricted Stock Units, Deferred Stock Units, Performance Awards, Non-Employee Director Awards, and Other Stock-Based Awards held by such Participant as of the effective date of such termination to terminate, vest or become free of restrictions and conditions to payment, as the case may be, following such termination of employment or service, in each case in the manner determined by the Committee; <u>provided</u>, <u>however</u>, that (a) no Option or Stock Appreciation Right may remain exercisable beyond its expiration date; and (b) any such action by the Committee adversely affecting any outstanding Award will not be effective without the consent of the affected Participant (subject to the right of the Committee to take whatever action it deems appropriate under Section 4.4, 13.5, 15 or 19 of this Plan).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.5 <u>Additional Forfeiture Events</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Effect of Actions Constituting Cause or Adverse Action</u>. Notwithstanding anything in this Plan to the contrary and in addition to the other rights of the Committee under this Plan, including this Section 13.5, if a Participant is determined by the Committee, acting in its sole discretion, to have taken any action that would constitute Cause or an Adverse Action during or within one (1) year after the termination of employment or other service with the Company or a Subsidiary, irrespective of whether such action or the Committee's determination occurs before or after termination of such Participant's employment or other service with the Company or any Subsidiary and irrespective of whether or not the Participant was terminated as a result of such Cause or Adverse Action, (i) all rights of the Participant under this Plan and any Award Agreements evidencing an Award then held by the Participant will terminate and be forfeited without notice of any kind, and (ii) the Committee in its sole discretion will have the authority to rescind the exercise, vesting or issuance of, or payment in respect of, any Awards of the Participant that were exercised, vested or issued, or as to which such payment was made, and to require the Participant to pay to the Company, within ten (10) days of receipt from the Company of notice of such rescission, any amount received or the amount of any gain realized as a result of such rescinded exercise, vesting, issuance or payment (including any dividends paid or other distributions made with respect to any shares of Common Stock subject to any Award). The Company may defer the exercise of any Option or Stock Appreciation Right for a period of up to six (6) months after receipt of the Participant's written notice of exercise or the issuance of stock certificates or book-entry notations upon the vesting of any Award for a period of up to six (6) months after the date of such vesting in order for the Committee to make any determination as to the existence of Cause or an Adverse Action. The Company will be entitled to withhold and deduct from future wages of the Participant (or from other amounts that may be due and owing to the Participant from the Company or a Subsidiary) or make other arrangements for the collection of all amounts necessary to satisfy such payment obligations. Unless otherwise provided by the Committee in an applicable Award Agreement, this Section 13.5(a) will not apply to any Participant following a Change in Control.

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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;(b) <u>Forfeiture or Clawback of Awards Under Applicable Law and Company Policy</u>. Subject to the terms of an Individual Agreement, Awards under the Plan shall be subject to any automatic forfeiture or voluntary compensation "clawback," forfeiture or recoupment provisions under Applicable Law and any compensation "clawback," forfeiture or recoupment policy of the Company, as in effect from time to time, and such forfeiture and/or penalty conditions or provisions as determined by the Committee and set forth in the applicable Award Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. <u>Payment of Withholding Taxes</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.1 <u>General Rules</u>. The Company is entitled to (a) withhold and deduct from future wages of the Participant (or from other amounts that may be due and owing to the Participant from the Company or a Subsidiary), or make other arrangements for the collection of, all amounts the Company reasonably determines are necessary to satisfy any and all federal, foreign, state and local withholding and employment related tax requirements attributable to an Award, including the grant, exercise, vesting or settlement of, or payment of dividends with respect to, an Award or a disqualifying disposition of stock received upon exercise of an Incentive Stock Option, or (b) require the Participant promptly to remit the amount of such withholding to the Company before taking any action, including issuing any shares of Common Stock, with respect to an Award. When withholding shares of Common Stock for taxes is effected under this Plan, it will be withheld only up to an amount based on the maximum statutory tax rates in the Participant's applicable tax jurisdiction or such other rate that will not trigger a negative accounting impact on the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.2 <u>Special Rules</u>. The Committee may, in its sole discretion and upon terms and conditions established by the Committee, permit or require a Participant to satisfy, in whole or in part, any withholding or employment related tax obligation described in Section 14.1 of this Plan by withholding shares of Common Stock underlying an Award, by electing to tender, or by attestation as to ownership of, Previously Acquired Shares, by delivery of a Broker Exercise Notice or a combination of such methods. For purposes of satisfying a Participant's withholding or employment-related tax obligation, shares of Common Stock withheld by the Company or Previously Acquired Shares tendered or covered by an attestation will be valued at their Fair Market Value on the Tax Date.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. <u>Change in Control</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.1 <u>Definition of Change in Control</u>. Unless otherwise provided in an Award Agreement or Individual Agreement between the Participant and the Company or one of its Subsidiaries or Affiliates, a "<u>Change in Control</u>" will mean the occurrence of any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The acquisition, other than from the Company, by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty percent (50%) or more of either the then outstanding shares of Common Stock of the Company or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors, but excluding, for this purpose, any such acquisition by the Company or any of its Subsidiaries, or any employee benefit plan (or related trust) of the Company or its Subsidiaries, or any entity with respect to which, following such acquisition, more than fifty percent (50%) of, respectively, the then outstanding equity of such entity and the combined voting power of the then outstanding voting equity of such entity entitled to vote generally in the election of all or substantially all of the members of such entity's governing body is then beneficially owned, directly or indirectly, by the individuals and entities who were the beneficial owners, respectively, of the Common Stock and voting securities of the Company immediately prior to such acquisition in substantially the same proportion as their ownership, immediately prior to such acquisition, of the then outstanding shares of Common Stock of the Company or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors, as the case may be; 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;(b) The consummation of a reorganization, merger or consolidation of the Company, in each case, with respect to which all or substantially all of the individuals and entities who were the respective beneficial owners of the Common Stock and voting securities of the Company immediately prior to such reorganization, merger or consolidation do not, following such reorganization, merger or consolidation, beneficially own, directly or indirectly, more than fifty percent (50%) of, respectively, the then outstanding shares of Common Stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such reorganization, merger or consolidation; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) a complete liquidation or dissolution of the Company or the sale or other disposition of all or substantially all of the assets of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.2 <u>Effect of Change in Control</u>. Subject to the terms of the applicable Award Agreement or an Individual Agreement, in the event of a Change in Control, the Committee (as constituted prior to such Change in Control) may, in its discretion:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) require that shares of stock of the corporation resulting from such Change in Control, or a parent corporation thereof, be substituted for some or all of the shares of Common Stock subject to an outstanding Award, with an appropriate and equitable adjustment to such Award as shall be determined by the Board in accordance with Section 4.4;

&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) provide that (i) some or all outstanding Options shall become exercisable in full or in part, either immediately or upon a subsequent termination of employment, (ii) the restrictions or vesting applicable to some or all outstanding Restricted Stock Awards and Restricted Stock Units shall lapse in full or in part, either immediately or upon a subsequent termination of employment, (iii) the Performance Period applicable to some or all outstanding Awards shall lapse in full or in part, and/or (iv) the Performance Goals applicable to some or all outstanding Awards shall be deemed to be satisfied at the target or any other level; and/or

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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;(c) require outstanding Awards, in whole or in part, to be surrendered to the Company by the holder, and to be immediately cancelled by the Company, and to provide for the holder to receive (A) a cash payment in an amount determined pursuant to Section 15.3 below; (B) shares of capital stock of the corporation resulting from or succeeding to the business of the Company pursuant to such Change in Control, or a parent corporation thereof, having a fair market value not less than the amount determined under clause (A) above; or (C) a combination of the payment of cash pursuant to clause (A) above and the issuance of shares pursuant to clause (B) above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.3 <u>Alternative Treatment of Incentive Awards</u>. In connection with a Change in Control, the Committee in its sole discretion, either in an Award Agreement at the time of grant of an Award or at any time after the grant of such an Award, in lieu of providing a substitute award to a Participant pursuant to Section 15.2(a), may determine that any or all outstanding Awards granted under the Plan, whether or not exercisable or vested, as the case may be, will be canceled and terminated and that in connection with such cancellation and termination the holder of such Award will receive for each share of Common Stock subject to such Award a cash payment (or the delivery of shares of stock, other securities or a combination of cash, stock and securities with a fair market value (as determined by the Committee in good faith) equivalent to such cash payment) equal to the difference, if any, between the consideration received by shareholders of the Company in respect of a share of Common Stock in connection with such Change in Control and the purchase price per share, if any, under the Award, multiplied by the number of shares of Common Stock subject to such Award (or in which such Award is denominated); <u>provided</u>, <u>however</u>, that if such product is zero ($0) or less or to the extent that the Award is not then exercisable, the Award may be canceled and terminated without payment therefor. If any portion of the consideration pursuant to a Change in Control may be received by holders of shares of Common Stock on a contingent or delayed basis, the Committee may, in its sole discretion, determine the fair market value per share of such consideration as of the time of the Change in Control on the basis of the Committee's good faith estimate of the present value of the probable future payment of such consideration. Notwithstanding the foregoing, any shares of Common Stock issued pursuant to an Award that immediately prior to the effectiveness of the Change in Control are subject to no further restrictions pursuant to the Plan or an Award Agreement (other than pursuant to the securities laws) will be deemed to be outstanding shares of Common Stock and receive the same consideration as other outstanding shares of Common Stock in connection with the Change in Control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.4 <u>Limitation on Change in Control Payments</u>. Notwithstanding anything in this Section 15 to the contrary, if, with respect to a Participant, the acceleration of the vesting of an Award or the payment of cash in exchange for all or part of a Stock-Based Award (which acceleration or payment could be deemed a "payment" within the meaning of Section 280G(b)(2) of the Code), together with any other "payments" that such Participant has the right to receive from the Company or any corporation that is a member of an "affiliated group" (as defined in Section 1504(a) of the Code without regard to Section 1504(b) of the Code) of which the Company is a member, would constitute a "parachute payment" (as defined in Section 280G(b)(2) of the Code), then the "payments" to such Participant pursuant to Section 15.2 or Section 15.3 of this Plan will be reduced (or acceleration of vesting eliminated) to the largest amount as will result in no portion of such "payments" being subject to the excise tax imposed by Section 4999 of the Code; <u>provided</u>, <u>however</u>, that such reduction will be made only if the aggregate amount of the payments after such reduction exceeds the difference between (a) the amount of such payments absent such reduction minus (b) the aggregate amount of the excise tax imposed under Section 4999 of the Code attributable to any such excess parachute payments; and <u>provided,</u> <u>further</u> that such payments will be reduced (or acceleration of vesting eliminated) by first eliminating vesting of Options with an exercise price above the then Fair Market Value of a share of Common Stock that have a positive value for purposes of Section 280G of the Code, followed by reducing or eliminating payments or benefits pro rata among Awards that are deferred compensation subject to Section 409A of the Code, and, if a further reduction is necessary, by reducing or eliminating payments or benefits pro rata among Awards that are not subject to Section 409A of the Code. Notwithstanding the foregoing sentence, if a Participant is subject to a separate agreement with the Company or a Subsidiary that expressly addresses the potential application of Section 280G or 4999 of the Code, then this Section 15.4 will not apply and any "payments" to a Participant pursuant to Section 15 of this Plan will be treated as "payments" arising under such separate agreement; <u>provided</u>, <u>however</u>, such separate agreement may not modify the time or form of payment under any Award that constitutes deferred compensation subject to Section 409A of the Code if the modification would cause such Award to become subject to the adverse tax consequences specified in Section 409A of the Code.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.5 <u>Exceptions</u>. Notwithstanding anything in this Section 15 to the contrary, individual Award Agreements or Individual Agreements between a Participant and the Company or one of its Subsidiaries or Affiliates may contain provisions with respect to vesting, payment or treatment of Awards upon the occurrence of a Change in Control, and the terms of any such Award Agreement or Individual Agreement will govern to the extent of any inconsistency with the terms of this Section 15. The Committee will not be obligated to treat all Awards subject to this Section 15 in the same manner. The timing of any payment under this Section 15 may be governed by any election to defer receipt of a payment made under a Company deferred compensation plan or arrangement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. <u>Rights of Eligible Recipients and Participants; Transferability</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.1 <u>Employment</u>. Nothing in this Plan or an Award Agreement will interfere with or limit in any way the right of the Company or any Subsidiary to terminate the employment or service of any Eligible Recipient or Participant at any time, nor confer upon any Eligible Recipient or Participant any right to continue employment or other service with the Company or any Subsidiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.2 <u>No Rights to Awards</u>. No Participant or Eligible Recipient will have any claim to be granted any Award under this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.3 <u>Rights as a Shareholder</u>. Except as otherwise provided in the Award Agreement, a Participant will have no rights as a shareholder with respect to shares of Common Stock covered by any Stock-Based Award unless and until the Participant becomes the holder of record of such shares of Common Stock and then subject to any restrictions or limitations as provided herein or in the Award Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.4 <u>Restrictions on Transfer</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except pursuant to testamentary will or the laws of descent and distribution or as otherwise expressly permitted by subsections (b) and (c) below, no right or interest of any Participant in an Award prior to the exercise (in the case of Options or Stock Appreciation Rights) or vesting, issuance or settlement of such Award will be assignable or transferable, or subjected to any lien, during the lifetime of the Participant, either voluntarily or involuntarily, directly or indirectly, by operation of law 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) A Participant will be entitled to designate a beneficiary to receive an Award upon such Participant's death, and in the event of such Participant's death, payment of any amounts due under this Plan will be made to, and exercise of any Options or Stock Appreciation Rights (to the extent permitted pursuant to Section 13 of this Plan) may be made by, such beneficiary. If a deceased Participant has failed to designate a beneficiary, or if a beneficiary designated by the Participant fails to survive the Participant, payment of any amounts due under this Plan will be made to, and exercise of any Options or Stock Appreciation Rights (to the extent permitted pursuant to Section 13 of this Plan) may be made by, the Participant's legal representatives, heirs and legatees. If a deceased Participant has designated a beneficiary and such beneficiary survives the Participant but dies before complete payment of all amounts due under this Plan or exercise of all exercisable Options or Stock Appreciation Rights, then such payments will be made to, and the exercise of such Options or Stock Appreciation Rights may be made by, the legal representatives, heirs and legatees of the beneficiary.

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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;(c) Upon a Participant's request, the Committee may, in its sole discretion, permit a transfer of all or a portion of a Non-Statutory Stock Option, other than for value, to such Participant's child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, any person sharing such Participant's household (other than a tenant or employee), a trust in which any of the foregoing have more than fifty percent (50%) of the beneficial interests, a foundation in which any of the foregoing (or the Participant) control the management of assets, and any other entity in which these persons (or the Participant) own more than fifty percent (50%) of the voting interests. Any permitted transferee will remain subject to all the terms and conditions applicable to the Participant prior to the transfer. A permitted transfer may be conditioned upon such requirements as the Committee may, in its sole discretion, determine, including, but not limited to, execution and/or delivery of appropriate acknowledgements, opinion of counsel, or other documents by the transferee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Committee may impose such restrictions on any shares of Common Stock acquired by a Participant under this Plan as it may deem advisable, including minimum holding period requirements, restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which the Common Stock is then listed or traded, or under any blue sky or state securities laws applicable to such shares or the Company's insider trading policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.5 <u>Non-Exclusivity of this Plan</u>. Nothing contained in this Plan is intended to modify or rescind any previously approved compensation plans or programs of the Company or create any limitations on the power or authority of the Board to adopt such additional or other compensation arrangements as the Board may deem necessary or desirable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. <u>Securities Law and Other Restrictions</u>.

Notwithstanding any other provision of this Plan or any Award Agreements entered into pursuant to this Plan, the Company will not be required to issue any shares of Common Stock under this Plan, and a Participant may not sell, assign, transfer or otherwise dispose of shares of Common Stock issued pursuant to Awards granted under this Plan, unless (a) there is in effect with respect to such shares a registration statement under the Securities Act and any applicable securities laws of a state or foreign jurisdiction or an exemption from such registration under the Securities Act and applicable state or foreign securities laws, and (b) there has been obtained any other consent, approval or permit from any other U.S. or foreign regulatory body which the Committee, in its sole discretion, deems necessary or advisable. The Company may condition such issuance, sale or transfer upon the receipt of any representations or agreements from the parties involved, and the placement of any legends on certificates or book-entry notations representing shares of Common Stock, as may be deemed necessary or advisable by the Company in order to comply with such securities law or other restrictions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. <u>Deferred Compensation; Compliance with Section 409A</u>.

It is intended that all Awards issued under this Plan be in a form and administered in a manner that will comply with the requirements of Section 409A of the Code, or the requirements of an exception to Section 409A of the Code, and the Award Agreements and this Plan will be construed and administered in a manner that is consistent with and gives effect to such intent. The Committee is authorized to adopt rules or regulations deemed necessary or appropriate to qualify for an exception from or to comply with the requirements of Section 409A of the Code. With respect to an Award that constitutes a deferral of compensation subject to Code Section 409A: (a) if any amount is payable under such Award upon a termination of service, a termination of service will be treated as having occurred only at such time the Participant has experienced a Separation from Service; (b) if any amount is payable under such Award upon a Disability, a Disability will be treated as having occurred only at such time the Participant has experienced a "disability" as such term is defined for purposes of Code Section 409A; (c) if any amount is payable under such Award on account of the occurrence of a Change in Control, a Change in Control will be treated as having occurred only at such time a "change in the ownership or effective control of the corporation or in the ownership of a substantial portion of the assets of the corporation" as such terms are defined for purposes of Code Section 409A, (d) if any amount becomes payable under such Award on account of a Participant's Separation from Service at such time as the Participant is a "specified employee" within the meaning of Code Section 409A, then no payment will be made, except as permitted under Code Section 409A, prior to the first business day after the earlier of (i) the date that is six (6) months after the date of the Participant's Separation from Service or (ii) the Participant's death, and (e) no amendment to or payment under such Award will be made except and only to the extent permitted under Code Section 409A.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19. <u>Amendment, Modification and Termination</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.1 <u>Generally</u>. Subject to other subsections of this Section 19 and Sections 3.4 and 19.3 of this Plan, the Board at any time may suspend or terminate this Plan (or any portion thereof) or terminate any outstanding Award Agreement and the Committee, at any time and from time to time, may amend this Plan or amend or modify the terms of an outstanding Award. The Committee's power and authority to amend or modify the terms of an outstanding Award includes the authority to modify the number of shares of Common Stock or other terms and conditions of an Award, extend the term of an Award, accelerate the vesting of an Award, accept the surrender of any outstanding Award or, to the extent not previously exercised or vested, authorize the grant of new Awards in substitution for surrendered Awards; <u>provided</u>, <u>however</u> that the amended or modified terms are permitted by this Plan as then in effect and that any Participant adversely affected by such amended or modified terms has consented to such amendment or modification.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.2 <u>Shareholder Approval</u>. No amendments to this Plan will be effective without approval of the Company's shareholders if: (a) shareholder approval of the amendment is then required pursuant to Section 422 of the Code, the rules of the primary stock exchange or stock market on which the Common Stock is then traded, applicable state corporate laws or regulations, applicable federal laws or regulations, and the applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under this Plan; or (b) such amendment would: (i) modify Section 3.4 of this Plan; (ii) increase the aggregate number of shares of Common Stock issued or issuable under this Plan; (iii) modify the eligibility requirements for Participants in this Plan; or (iv) reduce the minimum exercise price or grant price as set forth in Sections 6.3 and 7.3 of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.3 <u>Awards Previously Granted</u>. Notwithstanding any other provision of this Plan to the contrary, no termination, suspension or amendment of this Plan may adversely affect any outstanding Award without the consent of the affected Participant; <u>provided</u>, <u>however</u>, that this sentence will not impair the right of the Committee to take whatever action it deems appropriate under Sections 4.4, 9.7, 13, 15, 18 or 19.4 of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.4 <u>Amendments to Conform to Law</u>. Notwithstanding any other provision of this Plan to the contrary, the Committee may amend this Plan or an Award Agreement, to take effect retroactively or otherwise, as deemed necessary or advisable for the purpose of conforming this Plan or an Award Agreement to any present or future law relating to plans of this or similar nature, and to the administrative regulations and rulings promulgated thereunder. By accepting an Award under this Plan, a Participant agrees to any amendment made pursuant to this Section 19.4 to any Award granted under this Plan without further consideration or action.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20. <u>Substituted Awards.</u> 

The Committee may grant Awards under this Plan in substitution for stock and stock-based awards held by employees of another entity who become employees of the Company or a Subsidiary as a result of a merger or consolidation of the former employing entity with the Company or a Subsidiary or the acquisition by the Company or a Subsidiary of property or stock of the former employing corporation. The Committee may direct that the substitute Awards be granted on such terms and conditions as the Committee considers appropriate in the circumstances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21. <u>Duration of this Plan</u>.

This Plan will terminate at 11:59 p.m., Eastern Time, on [•], 2036, and may be terminated prior to such time by Board action. No Award will be granted after termination of this Plan, but Awards outstanding upon termination of this Plan will remain outstanding in accordance with their applicable terms and conditions and the terms and conditions of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22. <u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.1 <u>Usage</u>. In this Plan, except where otherwise indicated by clear contrary intention, (a) any masculine term used herein also will include the feminine, (b) the plural will include the singular, and the singular will include the plural, (c) "including" (and with correlative meaning "include") means including without limiting the generality of any description preceding such term, and (d) "or" is used in the inclusive sense of "and/or".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.2 <u>Relationship to Other Benefits</u>. Neither Awards made under this Plan nor shares of Common Stock or cash paid pursuant to such Awards under this Plan will be included as "compensation" for purposes of computing the benefits payable to any Participant under any pension, retirement (qualified or non-qualified), savings, profit sharing, group insurance, welfare, or benefit plan of the Company or any Subsidiary unless provided otherwise in such plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.3 <u>Fractional Shares</u>. No fractional shares of Common Stock will be issued or delivered under this Plan or any Award. The Committee will determine whether cash, other Awards or other property will be issued or paid in lieu of fractional shares of Common Stock or whether such fractional shares of Common Stock or any rights thereto will be forfeited or otherwise eliminated by rounding up or down.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.4 <u>Governing Law; Venue</u>. Except to the extent expressly provided herein or in connection with other matters of corporate governance and authority (all of which will be governed by the laws of the Company's jurisdiction of incorporation), the validity, construction, interpretation, administration and effect of this Plan and any rules, regulations and actions relating to this Plan will be governed by and construed exclusively in accordance with the laws of the State of Georgia, notwithstanding the conflicts of laws principles of any jurisdictions. Unless otherwise expressly provided in an Award Agreement, the Company and recipients of an Award under this Plan hereby irrevocably submit to the exclusive jurisdiction and venue of the federal or state courts of the State of Georgia to resolve any and all issues that may arise out of or relate to this Plan or any Award Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.5 <u>Successors</u>. All obligations of the Company under this Plan with respect to Awards granted hereunder will be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation or otherwise, of all or substantially all of the business or assets of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.6 <u>Construction</u>. Wherever possible, each provision of this Plan and any Award Agreement will be interpreted so that it is valid under the Applicable Law. If any provision of this Plan or any Award Agreement is to any extent invalid under the Applicable Law, that provision will still be effective to the extent it remains valid. The remainder of this Plan and the Award Agreement also will continue to be valid, and the entire Plan and Award Agreement will continue to be valid in other jurisdictions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.7 <u>Delivery and Execution of Electronic Documents</u>. To the extent permitted by Applicable Law, the Company may: (a) deliver by email or other electronic means (including posting on a Web site maintained by the Company or by a third party under contract with the Company) all documents relating to this Plan or any Award hereunder (including prospectuses required by the Securities and Exchange Commission) and all other documents that the Company is required to deliver to its security holders (including annual reports and proxy statements), and (b) permit Participants to use electronic, internet or other non-paper means to execute applicable Plan documents (including Award Agreements) and take other actions under this Plan in a manner prescribed by the Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.8 <u>Corporate Action Constituting Grant of Awards</u>. Corporate action constituting a grant by the Company of an Award to any Participant will be deemed completed as of the date of such corporate action, unless otherwise determined by the Committee, regardless of when the instrument, certificate or letter evidencing the Award is communicated to, or actually received or accepted by, the Participant. In the event that the corporate records (*e.g*., Board or Committee consents, resolutions or minutes) documenting the corporate action constituting the grant contain terms (*e.g*., exercise price, vesting schedule or number of shares) that are inconsistent with those in the Award Agreement or related grant documents as a result of a clerical error in the papering of the Award Agreement or related grant documents, the corporate records will control and the Participant will have no legally binding right to the incorrect term in the Award Agreement or related grant documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.9 <u>No Representations or Warranties Regarding Tax Effect; No Obligation to Minimize or Notify Regarding Taxes</u>. Notwithstanding any provision of this Plan to the contrary, the Company and its Subsidiaries, the Board, and the Committee neither represent nor warrant the tax treatment under any federal, state, local, or foreign laws and regulations thereunder (individually and collectively referred to as the "<u>Tax Laws</u>") of any Award granted or any amounts paid to any Participant under this Plan including, but not limited to, when and to what extent such Awards or amounts may be subject to tax, penalties, and interest under the Tax Laws and have no duty or obligation to minimize the tax consequences of an Award to the holder of such Award. The Company will have no duty or obligation to any Participant to advise such holder as to the time or manner of exercising an Award. Furthermore, the Company will have no duty or obligation to warn or otherwise advise such holder of a pending termination or expiration of an Award or a possible period in which the Award may not be exercised.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.10 <u>Unfunded Plan</u>. Participants will have no right, title or interest whatsoever in or to any investments that the Company or its Subsidiaries may make to aid it in meeting its obligations under this Plan. Nothing contained in this Plan, and no action taken pursuant to its provisions, will create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and any Participant, beneficiary, legal representative, or any other individual. To the extent that any individual acquires a right to receive payments from the Company or any Subsidiary under this Plan, such right will be no greater than the right of an unsecured general creditor of the Company or the Subsidiary, as the case may be. All payments to be made hereunder will be paid from the general funds of the Company or the Subsidiary, as the case may be, and no special or separate fund will be established and no segregation of assets will be made to assure payment of such amounts except as expressly set forth in this Plan.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.11 <u>Indemnification</u>. Subject to any limitations and requirements of Georgia law, each individual who is or will have been a member of the Board, or a Committee appointed by the Board, or an officer or Employee of the Company to whom authority was delegated in accordance with Section 3.3 of this Plan, will be indemnified and held harmless by the Company against and from any loss, cost, liability or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under this Plan and against and from any and all amounts paid by him or her in settlement thereof, with the Company's approval, or paid by him or her in satisfaction of any judgment in any such action, suit or proceeding against him or her, provided he or she will give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his/her own behalf. The foregoing right of indemnification will not be exclusive of any other rights of indemnification to which such individuals may be entitled under the Company's Articles of Incorporation or Bylaws, as a matter of law, or otherwise, or pursuant to any agreement with the Company, or any power that the Company may have to indemnify them or hold them harmless.

## Exhibit 10.45

**Exhibit 10.45**

**[Non-Employee Director]**

**NOTICE OF RESTRICTED STOCK UNIT GRANT UNDER THE** 

**QUMULUSAI, INC. 2026 EQUITY INCENTIVE PLAN**

QumulusAI, Inc., a Georgia corporation (the "<u>Company</u>"), pursuant to the QumulusAI, Inc. 2026 Equity Incentive Plan (as may be amended from time to time, the "<u>Plan</u>"), hereby grants to the individual named below (the "<u>Participant</u>") the number of Restricted Stock Units (as defined in the Plan) set forth below (the "<u>Restricted Stock Units</u>"). The Restricted Stock Units are subject to all of the terms and conditions set forth in this Notice of Restricted Stock Unit Grant (this "<u>Grant Notice</u>"), in the Restricted Stock Unit Award Agreement attached hereto (the "<u>Award Agreement</u>"), and in the Plan, all of which are incorporated herein in their entirety. Capitalized terms not otherwise defined herein will have the meaning set forth in the Plan. This Restricted Stock Units grant has been made as of the grant date indicated below, which shall be referred to as the "<u>Grant Date</u>."

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| | |
|:---|:---|
| **Participant**: | <u> </u><u> </u><u> </u><u> </u> |
| **Grant Date**: | <u> </u><u> </u><u> </u><u> </u> |
| **Total Number of** <br> **Restricted Stock Units**:  | <u> </u><u> </u><u> </u><u> </u>, subject to adjustment as provided in the Plan. |
| **Vesting Schedule**: | Except as otherwise provided in Section 3 of the Award Agreement, the Restricted Stock Units will vest and the underlying shares of Common Stock will become issuable:<u> </u><u> </u><u> </u><u> </u>; <u>provided</u>, <u>however</u>, that the Participant remains a director of or provides services to the Company or any Subsidiary through the applicable vesting date. |

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\* \* \* \* \*

**The Participant must accept this Restricted Stock Unit grant by executing this Grant Notice in the space provided below and returning such original execution copy to the Company or otherwise indicating affirmative acceptance of the Restricted Stock Unit grant electronically pursuant to procedures established by the Company and/or its third party administrator. The undersigned Participant acknowledges that he or she has received a copy of this Grant Notice, the Award Agreement, the Plan and the Plan Prospectus. As an express condition to the grant of the Restricted Stock Units hereunder, the Participant agrees to be bound by the terms of this Grant Notice, the Award Agreement and the Plan. The Participant has read carefully and in its entirety the Award Agreement and specifically the acknowledgements in Section 7.9 thereof. This Grant Notice, the Award Agreement and the Plan set forth the entire agreement and understanding of the Company and the Participant with respect to the grant, vesting and administration of this Restricted Stock Units award and supersede all prior agreements, arrangements, plans and understandings. This Grant Notice (which includes the attached Award Agreement) may be executed in two counterparts each of which will be deemed an original and both of which together will constitute one and the same instrument.**

\* \* \* \* \*

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| | |
|:---|:---|
| **QUMULUSAI, INC.** | **PARTICIPANT** |
| ________________________________ | ________________________________ |
| By: Michael Maniscalco | [Name of Participant] |
| Title: Chief Executive Officer |  |

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&nbsp;&nbsp;&nbsp;&nbsp;<br>

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**RESTRICTED STOCK UNIT AWARD AGREEMENT**

Pursuant to the Notice of Restricted Stock Unit Grant (the "<u>Grant Notice</u>") to which this Restricted Stock Unit Award Agreement (this "<u>Agreement</u>") is attached and which Grant Notice is included in and part of this Agreement, and subject to the terms of this Agreement and the QumulusAI, Inc. 2026 Equity Incentive Plan (as may be amended from time to time, the "<u>Plan</u>"), QumulusAI, Inc., a Georgia corporation (the "<u>Company</u>"), and the Participant named in the Grant Notice (the "<u>Participant</u>") agree as follows:

1. <u>Incorporation of Plan; Definitions</u>. The provisions of the Plan are hereby incorporated herein by reference. Except as otherwise expressly set forth herein, this Agreement will be construed in accordance with the provisions of the Plan and any capitalized terms not otherwise defined in this Agreement or in the Grant Notice will have the same meanings as set forth in the Plan. The provisions of this Agreement will be interpreted as to be consistent with the Plan and any ambiguities in this Agreement will be interpreted by reference to the Plan. In the event that any provision of this Agreement is not authorized by or is inconsistent with the terms of the Plan, the terms of the Plan will prevail. Pursuant to and in accordance with the terms of the Plan, the Committee will have final authority to interpret and construe the Plan and this Agreement and to make any and all determinations thereunder, and its decision will be final, binding and conclusive upon the Participant and his or her legal representatives in respect of any questions arising under the Plan or this Agreement. A copy of the Plan and the Plan Prospectus have been delivered to the Participant together with this Agreement.

2. <u>Grant of Restricted Stock Units</u>. The Company hereby grants to the Participant that number of Restricted Stock Units as set forth in the Grant Notice, subject to adjustment as provided in the Plan, and each of which, once vested pursuant to this Agreement, will be settled in one (1) share of Common Stock, subject to the terms, conditions and restrictions set forth herein and in the Plan. Reference in this Agreement to the Restricted Stock Units will be deemed to include the Dividend Equivalents with respect to such Restricted Stock Units as set forth in Section 4.2 of this Agreement.

3. <u>Vesting and Conditions to Issuance of Common Stock; Forfeiture</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 <u>Service-Based Vesting Condition</u>. Except as otherwise provided in this Section 3 or this Agreement or the Plan, the Restricted Stock Units will vest and such vested Restricted Stock Units will be converted to Common Stock immediately thereafter in the amounts and on the date(s) as indicated in the Vesting Schedule set forth in the Grant Notice (each a "<u>Vesting Date</u>") and as set forth in this Agreement and in the Plan; <u>provided</u>, <u>however</u>, that the Participant remains a director of the Company or otherwise provides services to the Company or any Subsidiary through the applicable Vesting Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 <u>Change in Control</u>. Except as otherwise provided in an Individual Agreement between the Company and the Participant, upon a Change in Control (as defined in an Individual Agreement between the Participant and the Company or if there is no such Individual Agreement or if it does not define Change in Control, then as defined in the Plan), the Restricted Stock Units will be subject to the provisions below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. In the event of such a Change in Control, the surviving or successor organization (or a parent or subsidiary thereof) (the "<u>Successor</u>") may continue, assume or substitute equivalent awards (with such adjustments as may be required or permitted by Section 4.4 of the Plan). A substitute equivalent award must (i) have a value at least equal to the value of the Restricted Stock Units being substituted; (ii) be the same type of award as the Restricted Stock Units being substituted; (iii) be vested to the extent vested at the time of and as a result of the Change in Control; and (iv) have other terms and conditions (including vesting and effect of termination within one (1) year following a Change in Control) that are not less favorable to the Participant than the terms and conditions of the Restricted Stock Units being substituted, in each case, as determined by the Committee (as constituted prior to the Change in Control) in its sole discretion. If the Restricted Stock Units are continued, assumed or substituted by the Successor and within one (1) year following a Change in Control, the Participant is no longer a director of the Company or providing services to the Company or any Subsidiary for any reason other than the Participant's voluntary resignation, the Restricted Stock Units will vest and such vested Restricted Stock Units will be converted to Common Stock immediately thereafter in the amounts as indicated in the Grant Notice and as set forth in this Agreement and in the Plan as of the termination or resignation.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. In the event of such a Change in Control, any Restricted Stock Units that are not continued, assumed or substituted with equivalent awards by the Successor pursuant to Section 3.2(a) above, the Restricted Stock Units, effective immediately prior to such Change in Control but conditioned upon the completion of such Change in Control, will be fully vested and such vested Restricted Stock Units will be converted to Common Stock immediately thereafter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 <u>Effect of Termination of Service</u>. Except as otherwise provided below or in Section 13.4 or 13.5 of the Plan or in an Individual Agreement between the Company or any Subsidiary and the Participant, in the event the Participant's service as a director or otherwise with the Company and all Subsidiaries is terminated for any reason, all outstanding but unvested Restricted Stock Units held by the Participant as of the effective date of such termination will be terminated and forfeited. Notwithstanding the foregoing, in the event the Participant has served as a director of the Company for at least one year and the Participant's service with the Company and all Subsidiaries is terminated by a Qualifying Termination (as defined below), then all outstanding but unvested Restricted Stock Units will become immediately vested and shares of Common Stock will become issuable under Section 4.1 except to the extent the Participant has properly elected to defer income that may be attributable to such Restricted Stock Units under a Company deferred compensation plan or arrangement. For purposes of this Section 3.3, a "<u>Qualifying Termination</u>" means a termination of the Participant's service as a director or otherwise with the Company and all Subsidiaries due to any of the following: (a) the Participant's death; (b) the Participant's Disability; or (c) a resignation by the Participant at the request of the Board; <u>provided</u>, <u>however</u>, that in the case of clause (c), the Participant is otherwise in "good standing" with the Board, as defined and determined by the Board in its sole discretion. Notwithstanding the foregoing, the Board may, in its sole discretion, accelerate the vesting of the Restricted Stock Units at any time and for any reason, including without limitation if the Board decides not to re-nominate the Participant as a director nominee despite the Participant's "good standing" with the Board and desire and willingness to stand for re-election as a director nominee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4 <u>Effect of Actions Constituting Cause or Adverse Action; Forfeiture or Clawback</u>. The Restricted Stock Units are subject to the forfeiture provisions set forth in Section 13.5 of the Plan, including those applicable if the Participant is determined by the Committee to have taken any action that would constitute Cause or an Adverse Action and any forfeiture or clawback requirement under Applicable Law or any policy adopted from time to time by the Company.

4. <u>Settlement; Issuance of Common Stock</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 <u>Timing and Manner of Settlement</u>. Vested Restricted Stock Units will be converted to shares of Common Stock which the Company will issue and deliver to the Participant (either by delivering one or more certificates for such shares or by entering such shares in book entry form in the name of the Participant or depositing such shares for the Participant's benefit with any broker with which the Participant has an account relationship or the Company has engaged to provide such services under the Plan, as determined by the Company in its sole discretion) within seventy four (74) days following the Vesting Date, except to the extent that shares of Common Stock are withheld to pay tax withholding obligations pursuant to Section 6 of this Agreement or the Participant has properly elected to defer income that may be attributable to such Restricted Stock Units under a Company deferred compensation plan or arrangement. Payment of amounts under this Agreement (by issuance of shares of Common Stock or otherwise) is intended to comply with the requirements of an exception to Section 409A of the Code and this Agreement shall in all respects be administered and construed to give effect to such intent. The Committee in its sole discretion may accelerate or delay the distribution of any payment under this Agreement to the extent allowed under Section 409A of the Code.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 <u>Dividends Equivalents</u>. The Restricted Stock Units are being granted with an equal number of Dividend Equivalents. Such Dividend Equivalents entitle the Participant to be credited with any amount equal to all cash dividends paid on one share of Common Stock for each Restricted Stock Unit while the corresponding Restricted Stock Unit is outstanding. Dividend Equivalents will be converted into additional Restricted Stock Units and will be subject to the same conditions and restrictions as the Restricted Stock Units to which they attach. The number of additional Restricted Stock Units to be received as Dividend Equivalents will be determined by dividing the cash dividend per share by the Fair Market Value of one share of Common Stock on the dividend payment date. Dividend Equivalents as to the Restricted Stock Units will be subject to forfeiture and termination to the same extent as the corresponding Restricted Stock Units as to which the Dividend Equivalents relate.

5. <u>Rights of Participant</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 <u>No Right to Service</u>. Nothing in this Agreement will interfere with or limit in any way the right of the Company or any Subsidiary to terminate the service of the Participant at any time, nor confer upon the Participant any right to continue service as a director or otherwise with the Company or any Subsidiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 <u>Rights as a Shareholder</u>. The Participant will have no rights as, or privileges of, a shareholder of the Company, with respect to shares of Common Stock covered by the Restricted Stock Units unless and until the Participant becomes the holder of record of such shares of Common Stock issued in settlement of the Restricted Stock Units (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 <u>Restrictions on Transfer</u>. Except pursuant to testamentary will or the laws of descent and distribution or as otherwise expressly permitted by the Plan, no right or interest of the Participant in the Restricted Stock Units prior to the vesting, issuance or settlement of the Restricted Stock Units will be assignable or transferable, or subjected to any lien, during the lifetime of the Participant, either voluntarily or involuntarily, directly or indirectly, by operation of law or otherwise. Any attempt to transfer, assign or encumber the Restricted Stock Units other than in accordance with this Agreement and the Plan will be null and void and the Restricted Stock Units for which the restrictions have not lapsed will be forfeited and immediately returned to the Company.

6. <u>Withholding Taxes</u>. The Company is entitled to (a) withhold and deduct from future wages of the Participant (or from other amounts that may be due and owing to the Participant from the Company or a Subsidiary), or make other arrangements for the collection of, all amounts the Company reasonably determines are necessary to satisfy any and all federal, foreign, state and local withholding and employment related tax requirements attributable to the Restricted Stock Units, including the grant, vesting or settlement of, or payment of Dividend Equivalents with respect to, the Restricted Stock Units, or (b) require the Participant promptly to remit the amount of such withholding to the Company before taking any action, including issuing any shares of Common Stock, with respect to the Restricted Stock Units. The Committee may, in its sole discretion and upon terms and conditions established by the Committee, permit or require the Participant to satisfy, in whole or in part, any withholding or employment related tax obligation in connection with the Restricted Stock Units by withholding shares of Common Stock issuable upon settlement of the Restricted Stock Units. When withholding shares of Common Stock for taxes is effected under this Agreement and the Plan, it will be withheld only up to an amount based on the maximum statutory tax rates in the Participant's applicable tax jurisdiction or such other rate that will not trigger a negative accounting impact on the Company.

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7. <u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 <u>Governing Law</u>. The validity, construction, interpretation, administration and effect of this Agreement and any rules, regulations and actions relating to this Agreement will be governed by and construed exclusively in accordance with the laws of the State of Georgia, notwithstanding the conflicts of laws principles of any jurisdictions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 <u>Interpretation</u>. Any dispute regarding the interpretation of this Agreement will be submitted by the Participant or by the Company forthwith to the Committee for review. The resolution of such a dispute by the Committee will be final and binding on all parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 <u>Successors and Assigns</u>. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement will inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Agreement will be binding upon the Participant and his or her heirs, executors, administrators, successors and assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4 <u>Notices</u>. All notices, requests or other communications provided for in this Agreement must be made, if to the Company, to QumulusAI, Inc., Attn: Chief Financial Officer, 1130 Powers Ferry Pl SE, Marietta, Georgia 30067, and if to the Participant, to the last known mailing address of the Participant contained in the records of the Company. All notices, requests or other communications provided for in this Agreement must be made in writing either (a) by personal delivery, (b) by facsimile or electronic mail with confirmation of receipt, (c) by mailing in the United States mails or (d) by express courier service. The notice, request or other communication will be deemed to be received upon personal delivery, upon confirmation of receipt of facsimile or electronic mail transmission or upon receipt by the party entitled thereto if by United States mail or express courier service; <u>provided</u>, <u>however</u>, that if a notice, request or other communication sent to the Company is not received during regular business hours, it will be deemed to be received on the next succeeding business day of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5 <u>Electronic Delivery and Acceptance</u>. The Company may, in its sole discretion, deliver any documents related to the Restricted Stock Units by electronic means or request the Participant's consent to participate in the Plan by electronic means. The Participant hereby consents to receive all applicable documentation by electronic delivery and to participate in the Plan through an on-line system established and maintained by the Company or a third party vendor designated by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.6 <u>Other Laws</u>. The Company will have the right to refuse to issue to the Participant or transfer any shares of Common Stock subject to the Restricted Stock Units if the Company acting in its absolute discretion determines that the issuance or transfer of such shares might violate any Applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.7 <u>Investment Representation</u>. The Participant hereby represents and covenants that (a) any share of Common Stock acquired upon the vesting and settlement of the Restricted Stock Units will be acquired for investment and not with a view to the distribution thereof within the meaning of the Securities Act of 1933, as amended (the "<u>Securities Act</u>"), unless such acquisition has been registered under the Securities Act and any applicable state securities laws; (b) any subsequent sale of any such shares of Common Stock will be made either pursuant to an effective registration statement under the Securities Act and any applicable state securities laws, or pursuant to an exemption from registration under the Securities Act and such state securities laws; and (c) if requested by the Company, the Participant will submit a written statement, in form satisfactory to the Company, to the effect that such representation (x) is true and correct as of the date of vesting of any shares of Common Stock hereunder or (y) is true and correct as of the date of any sale of any such share, as applicable. As a further condition precedent to the delivery to the Participant of any shares of Common Stock subject to the Restricted Stock Units, the Participant will comply with all regulations and requirements of any regulatory authority having control of or supervision over the issuance or delivery of the shares of Common Stock and, in connection therewith, will execute any documents which the Company will in its sole discretion deem necessary or advisable.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.8 <u>Non-Negotiable Terms</u>. The terms of this Agreement and the Restricted Stock Units are not negotiable, but the Participant may refuse to accept the Restricted Stock Units by notifying the Company's Chief Financial Officer in writing within thirty (30) day after the Grant Date set forth in the Grant Notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.9 <u>Acknowledgement by the Participant</u>. In accepting the Restricted Stock Units, the Participant hereby acknowledges 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;(a) The Plan is established voluntarily by the Company, it is discretionary in nature, and it may be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The grant of the Restricted Stock Units is voluntary and occasional and does not create any contractual or other right to receive future awards of Restricted Stock Units, or benefits in lieu of Restricted Stock Units, even if Restricted Stock Units have been granted repeatedly in the past.

&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) All decisions with respect to future Restricted Stock Units award grants, if any, will be at the sole discretion of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Participant is voluntarily participating in the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The future value of the shares of Common Stock subject to the Restricted Stock Units is unknown and cannot be predicted with certainty and if the Restricted Stock Units vest and the shares of Common Stock become issuable in accordance with the terms of this Agreement, the value of those shares of Common Stock may increase or decrease.

&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) In consideration of the grant of the Restricted Stock Units, no claim or entitlement to compensation or damages shall arise from termination of the Restricted Stock Units or diminution in value of the Restricted Stock Units or shares of Common Stock acquired upon vesting of the Restricted Stock Units resulting from a termination of service of the Participant with the Company (for any reason whatsoever and whether or not in breach of applicable labor laws) and the Participant hereby irrevocably releases the Company and its Subsidiaries from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by acceptance of the Restricted Stock Units, the Participant shall be deemed irrevocably to have waived his or her entitlement to pursue such claim.

&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) Neither the Company nor any Subsidiary is providing any tax, legal or financial advice, nor is the Company or any Subsidiary making any recommendations regarding the Participant's participation in the Plan, acceptance of the Restricted Stock Units, acquisition of shares of Common Stock upon vesting of the Restricted Stock Units or any sale of such shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) The Participant has been advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.

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## Exhibit 10.46

**Exhibit 10.46**

**[Employee** – **Time-Based Vesting]**

**NOTICE OF RESTRICTED STOCK UNIT GRANT UNDER THE** 

**QUMULUSAI, INC. 2026 EQUITY INCENTIVE PLAN**

QumulusAI, Inc., a Georgia corporation (the "<u>Company</u>"), pursuant to the QumulusAI, Inc. 2026 Equity Incentive Plan (as may be amended from time to time, the "<u>Plan</u>"), hereby grants to the individual named below (the "<u>Participant</u>") the number of Restricted Stock Units (as defined in the Plan) set forth below (the "<u>Restricted Stock Units</u>"). The Restricted Stock Units are subject to all of the terms and conditions set forth in this Notice of Restricted Stock Unit Grant (this "<u>Grant Notice</u>"), in the Restricted Stock Unit Award Agreement attached hereto (the "<u>Award Agreement</u>"), and in the Plan, all of which are incorporated herein in their entirety. Capitalized terms not otherwise defined herein will have the meaning set forth in the Plan. This Restricted Stock Units grant has been made as of the grant date indicated below, which shall be referred to as the "<u>Grant Date</u>."

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| | |
|:---|:---|
| **Participant**: | <u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u> |
| **Grant Date**: | <u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u> |
| **Total Number of** <br> **Restricted Stock Units**: | <u> </u><u> </u><u> </u><u> </u>, subject to adjustment as provided in the Plan. |
| **Vesting Schedule**: | Except as otherwise provided in Section 3 of the Award Agreement, the Restricted Stock Units will vest and the underlying shares of Common Stock will become issuable:<u> </u><u> </u><u> </u><u> </u>; <u>provided</u>, <u>however</u>, that the Participant remains continuously employed by or provides services to the Company (including its Subsidiaries and Affiliates) through the applicable vesting date. |

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**The Participant must accept this Restricted Stock Unit grant by executing this Grant Notice in the space provided below and returning such original execution copy to the Company or otherwise indicating affirmative acceptance of the Restricted Stock Unit grant electronically pursuant to procedures established by the Company and/or its third party administrator. The undersigned Participant acknowledges that he or she has received a copy of this Grant Notice, the Award Agreement, the Plan and the Plan Prospectus. As an express condition to the grant of the Restricted Stock Units hereunder, the Participant agrees to be bound by the terms of this Grant Notice, the Award Agreement and the Plan. The Participant has read carefully and in its entirety the Award Agreement and specifically the acknowledgements in Section 7.9 thereof. This Grant Notice, the Award Agreement and the Plan set forth the entire agreement and understanding of the Company and the Participant with respect to the grant, vesting and administration of this Restricted Stock Units award and supersede all prior agreements, arrangements, plans and understandings. This Grant Notice (which includes the attached Award Agreement) may be executed in two counterparts each of which will be deemed an original and both of which together will constitute one and the same instrument.**

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| | |
|:---|:---|
| **QUMULUSAI, INC.**  | **PARTICIPANT** |
| By: Michael Maniscalco | [Name of Participant] |
| Title: Chief Executive Officer |  |

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**RESTRICTED STOCK UNIT AWARD AGREEMENT**

Pursuant to the Notice of Restricted Stock Unit Grant (the "<u>Grant Notice</u>") to which this Restricted Stock Unit Award Agreement (this "<u>Agreement</u>") is attached and which Grant Notice is included in and part of this Agreement, and subject to the terms of this Agreement and the QumulusAI, Inc. 2026 Equity Incentive Plan (as may be amended from time to time, the "<u>Plan</u>"), QumulusAI, Inc., a Georgia corporation (the "<u>Company</u>"), and the Participant named in the Grant Notice (the "<u>Participant</u>") agree as follows:

1. <u>Incorporation of Plan; Definitions</u>. The provisions of the Plan are hereby incorporated herein by reference. Except as otherwise expressly set forth herein, this Agreement will be construed in accordance with the provisions of the Plan and any capitalized terms not otherwise defined in this Agreement or in the Grant Notice will have the same meanings as set forth in the Plan. The provisions of this Agreement will be interpreted as to be consistent with the Plan and any ambiguities in this Agreement will be interpreted by reference to the Plan. In the event that any provision of this Agreement is not authorized by or is inconsistent with the terms of the Plan, the terms of the Plan will prevail. Pursuant to and in accordance with the terms of the Plan, the Committee will have final authority to interpret and construe the Plan and this Agreement and to make any and all determinations thereunder, and its decision will be final, binding and conclusive upon the Participant and his or her legal representatives in respect of any questions arising under the Plan or this Agreement. A copy of the Plan and the Plan Prospectus have been delivered to the Participant together with this Agreement.

2. <u>Grant of Restricted Stock Units</u>. The Company hereby grants to the Participant that number of Restricted Stock Units as set forth in the Grant Notice, subject to adjustment as provided in the Plan, and each of which, once vested pursuant to this Agreement, will be settled in one (1) share of Common Stock, subject to the terms, conditions and restrictions set forth herein and in the Plan. Reference in this Agreement to the Restricted Stock Units will be deemed to include the Dividend Equivalents with respect to such Restricted Stock Units as set forth in Section 4.2 of this Agreement.

3. <u>Vesting and Conditions to Issuance of Common Stock; Forfeiture</u>.

3.1 <u>Service-Based Vesting Condition</u>. Except as otherwise provided in this Section 3 or this Agreement or the Plan, the Restricted Stock Units will vest and such vested Restricted Stock Units will be converted to Common Stock immediately thereafter in the amounts and on the date(s) as indicated in the Vesting Schedule set forth in the Grant Notice (each a "<u>Vesting Date</u>") and as set forth in this Agreement and in the Plan; <u>provided</u>, <u>however</u>, that the Participant remains continuously employed by or provides services to the Company (including its Subsidiaries and Affiliates) through the applicable Vesting Date.

3.2 <u>Change in Control</u>. [Except as otherwise provided in an Individual Agreement between the Company and the Participant, upon a Change in Control, the Restricted Stock Units will be subject to Section 15 of the Plan.]

OR

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[Except as otherwise provided in an Individual Agreement between the Company and the Participant, upon a Change in Control (as defined in an Individual Agreement between the Participant and the Company or if there is no such Individual Agreement or if it does not define Change in Control, then as defined in the Plan), the Restricted Stock Units will be subject to the provisions below.

a. In the event of such a Change in Control, the surviving or successor organization (or a parent or subsidiary thereof) (the "<u>Successor</u>") may continue, assume or substitute equivalent awards (with such adjustments as may be required or permitted by Section 4.4 of the Plan). A substitute equivalent award must (i) have a value at least equal to the value of the Restricted Stock Units being substituted; (ii) be the same type of award as the Restricted Stock Units being substituted; (iii) be vested to the extent vested at the time of and as a result of the Change in Control; and (iv) have other terms and conditions (including vesting and effect of termination within one (1) year following a Change in Control) that are not less favorable to the Participant than the terms and conditions of the Restricted Stock Units being substituted, in each case, as determined by the Committee (as constituted prior to the Change in Control) in its sole discretion. If the Restricted Stock Units are continued, assumed or substituted by the Successor and within one (1) year following a Change in Control the Participant (i) is terminated by the Successor (or an Affiliate thereof) without Cause or (ii) the Participant resigns for Good Reason (as defined below), the Restricted Stock Units will vest and such vested Restricted Stock Units will be converted to Common Stock immediately thereafter in the amounts as indicated in the Grant Notice and as set forth in this Agreement and in the Plan as of the termination or resignation. For purposes of this Section 3.2(a), "<u>Good Reason</u>" means as defined in an Individual Agreement between the Participant and the Company but only if and to the extent such Good Reason constitutes "good reason" under Treas. Reg. Section 1.409A-1(n), or if there is no such Individual Agreement or if it does not define Good Reason, Good Reason means the assignment to the Participant of any duties materially inconsistent in any respect with the Participant's position (including a material negative change regarding the Participant's status, offices, titles or reporting requirements), authority, duties or responsibilities, or any other action by the Company which results in a material diminution in such position, authority, duties or responsibilities (but not occurring solely as a result of the Company's ceasing to be a publicly traded entity) existing immediately prior to the date of the Change in Control, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Participant; <u>provided</u>, <u>however</u>, "Good Reason" will not be deemed to exist unless (a) written notice of termination on account thereof is given by the Participant to the Company no later than sixty (60) days after the time at which the event or condition purportedly giving rise to Good Reason first occurs or arises; (b) if there exists (without regard to this clause (b)) an event or condition that constitutes Good Reason, the Company will have thirty (30) days from the date notice of such a termination is given to cure such event or condition and, if the Company does so, such event or condition will not constitute Good Reason hereunder and (c) if not cured, the Participant must resign from employment for a Good Reason event or condition within sixty (60) days following the last day of the Company's cure period. Any good faith determination of "Good Reason" made by the Committee will be conclusive. The Participant's mental or physical incapacity following the occurrence of an event described in above clauses will not affect the Participant's ability to terminate employment for Good Reason.

b. In the event of such a Change in Control, any Restricted Stock Units that are not continued, assumed or substituted with equivalent awards by the Successor pursuant to Section 3.2(a) above, the Restricted Stock Units, effective immediately prior to such Change in Control but conditioned upon the completion of such Change in Control, will be fully vested and such vested Restricted Stock Units will be converted to Common Stock immediately thereafter.]

3.3 <u>Effect of Termination of Employment or Other Service</u>. Except as otherwise provided below or in Section 13.4 or 13.5 of the Plan or in an Individual Agreement between the Company (including its Subsidiaries and Affiliates) and the Participant, in the event the Participant's employment or other service with the Company and all Subsidiaries is terminated for any reason, including for Cause, by reason of death, Disability or Retirement of the Participant, all outstanding but unvested Restricted Stock Units held by the Participant as of the effective date of such termination will be terminated and forfeited. Notwithstanding the foregoing, in the event the Participant's employment or other service with the Company and all Subsidiaries is terminated by reason of the Participant's death, a pro rata percentage of the unvested Restricted Stock Units scheduled to vest on the next applicable Vesting Date, with such proration based on the number of days during which the Participant was continuously employed by the Company or provided services to the Company (including its Subsidiaries and Affiliates) beginning on the Grant Date, or if a Vesting Date has occurred, the most recent Vesting Date, and ending on the next applicable Vesting Date, multiplied by the number of unvested Restricted Stock Units that were scheduled to vest on the next applicable Vesting Date, will become immediately vested and shares of Common Stock will become issuable under Section 4.1.

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3.4 <u>Effect of Actions Constituting Cause or Adverse Action; Forfeiture or Clawback</u>. The Restricted Stock Units are subject to the forfeiture provisions set forth in Section 13.5 of the Plan, including those applicable if the Participant is determined by the Committee to have taken any action that would constitute Cause or an Adverse Action and any forfeiture or clawback requirement under Applicable Law or any policy adopted from time to time by the Company.

4. <u>Settlement; Issuance of Common Stock</u>.

4.1 <u>Timing and Manner of Settlement</u>. Vested Restricted Stock Units will be converted to shares of Common Stock which the Company will issue and deliver to the Participant (either by delivering one or more certificates for such shares or by entering such shares in book entry form in the name of the Participant or depositing such shares for the Participant's benefit with any broker with which the Participant has an account relationship or the Company has engaged to provide such services under the Plan, as determined by the Company in its sole discretion) within seventy four (74) days following the Vesting Date, except to the extent that shares of Common Stock are withheld to pay tax withholding obligations pursuant to Section 6 of this Agreement or the Participant has properly elected to defer income that may be attributable to such Restricted Stock Units under a Company deferred compensation plan or arrangement. Payment of amounts under this Agreement (by issuance of shares of Common Stock or otherwise) is intended to comply with the requirements of an exception to Section 409A of the Code and this Agreement shall in all respects be administered and construed to give effect to such intent. The Committee in its sole discretion may accelerate or delay the distribution of any payment under this Agreement to the extent allowed under Section 409A of the Code.

4.2 <u>Dividends Equivalents</u>. The Restricted Stock Units are being granted with an equal number of Dividend Equivalents. Such Dividend Equivalents entitle the Participant to be credited with any amount equal to all cash dividends paid on one share of Common Stock for each Restricted Stock Unit while the corresponding Restricted Stock Unit is outstanding. Dividend Equivalents will be converted into additional Restricted Stock Units and will be subject to the same conditions and restrictions as the Restricted Stock Units to which they attach. The number of additional Restricted Stock Units to be received as Dividend Equivalents will be determined by dividing the cash dividend per share by the Fair Market Value of one share of Common Stock on the dividend payment date. Dividend Equivalents as to the Restricted Stock Units will be subject to forfeiture and termination to the same extent as the corresponding Restricted Stock Units as to which the Dividend Equivalents relate.

5. <u>Rights of Participant</u>.

5.1 <u>Employment or Other Service</u>. Nothing in this Agreement will interfere with or limit in any way the right of the Company (including its Subsidiaries and Affiliates) to terminate the employment or service of the Participant at any time, nor confer upon the Participant any right to continue employment or service with the Company (including its Subsidiaries and Affiliates).

5.2 <u>Rights as a Shareholder</u>. The Participant will have no rights as, or privileges of, a shareholder of the Company, with respect to shares of Common Stock covered by the Restricted Stock Units unless and until the Participant becomes the holder of record of such shares of Common Stock issued in settlement of the Restricted Stock Units (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company).

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5.3 <u>Restrictions on Transfer</u>. Except pursuant to testamentary will or the laws of descent and distribution or as otherwise expressly permitted by the Plan, no right or interest of the Participant in the Restricted Stock Units prior to the vesting, issuance or settlement of the Restricted Stock Units will be assignable or transferable, or subjected to any lien, during the lifetime of the Participant, either voluntarily or involuntarily, directly or indirectly, by operation of law or otherwise. Any attempt to transfer, assign or encumber the Restricted Stock Units other than in accordance with this Agreement and the Plan will be null and void and the Restricted Stock Units for which the restrictions have not lapsed will be forfeited and immediately returned to the Company.

6. <u>Withholding Taxes</u>. The Company (including its Subsidiaries and Affiliates) is entitled to (a) withhold and deduct from future wages of the Participant (or from other amounts that may be due and owing to the Participant from the Company (including its Subsidiaries and Affiliates)), or make other arrangements for the collection of, all amounts the Company reasonably determines are necessary to satisfy any and all federal, foreign, state and local withholding and employment related tax requirements attributable to the Restricted Stock Units, including the grant, vesting or settlement of, or payment of Dividend Equivalents with respect to, the Restricted Stock Units, or (b) require the Participant promptly to remit the amount of such withholding to the Company before taking any action, including issuing any shares of Common Stock, with respect to the Restricted Stock Units. The Committee may, in its sole discretion and upon terms and conditions established by the Committee, permit or require the Participant to satisfy, in whole or in part, any withholding or employment related tax obligation in connection with the Restricted Stock Units by withholding shares of Common Stock issuable upon settlement of the Restricted Stock Units. When withholding shares of Common Stock for taxes is effected under this Agreement and the Plan, it will be withheld only up to an amount based on the maximum statutory tax rates in the Participant's applicable tax jurisdiction or such other rate that will not trigger a negative accounting impact on the Company.

7. <u>Miscellaneous</u>.

7.1 <u>Governing Law</u>. The validity, construction, interpretation, administration and effect of this Agreement and any rules, regulations and actions relating to this Agreement will be governed by and construed exclusively in accordance with the laws of the State of Georgia notwithstanding the conflicts of laws principles of any jurisdictions.

7.2 <u>Interpretation</u>. Any dispute regarding the interpretation of this Agreement will be submitted by the Participant or by the Company forthwith to the Committee for review. The resolution of such a dispute by the Committee will be final and binding on all parties.

7.3 <u>Successors and Assigns</u>. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement will inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Agreement will be binding upon the Participant and his or her heirs, executors, administrators, successors and assigns.

7.4 <u>Notices</u>. All notices, requests or other communications provided for in this Agreement must be made, if to the Company, to QumulusAI, Inc., Attn: Chief Financial Officer, 1130 Powers Ferry Pl SE, Marietta, Georgia 30067, and if to the Participant, to the last known mailing address of the Participant contained in the records of the Company. All notices, requests or other communications provided for in this Agreement must be made in writing either (a) by personal delivery, (b) by facsimile or electronic mail with confirmation of receipt, (c) by mailing in the United States mails or (d) by express courier service. The notice, request or other communication will be deemed to be received upon personal delivery, upon confirmation of receipt of facsimile or electronic mail transmission or upon receipt by the party entitled thereto if by United States mail or express courier service; <u>provided</u>, <u>however</u>, that if a notice, request or other communication sent to the Company is not received during regular business hours, it will be deemed to be received on the next succeeding business day of the Company.

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7.5 <u>Electronic Delivery and Acceptance</u>. The Company may, in its sole discretion, deliver any documents related to the Restricted Stock Units by electronic means or request the Participant's consent to participate in the Plan by electronic means. The Participant hereby consents to receive all applicable documentation by electronic delivery and to participate in the Plan through an on-line system established and maintained by the Company or a third party vendor designated by the Company.

7.6 <u>Other Laws</u>. The Company will have the right to refuse to issue to the Participant or transfer any shares of Common Stock subject to the Restricted Stock Units if the Company acting in its absolute discretion determines that the issuance or transfer of such shares might violate any Applicable Law.

7.7 <u>Investment Representation</u>. The Participant hereby represents and covenants that (a) any share of Common Stock acquired upon the vesting and settlement of the Restricted Stock Units will be acquired for investment and not with a view to the distribution thereof within the meaning of the Securities Act of 1933, as amended (the "<u>Securities Act</u>"), unless such acquisition has been registered under the Securities Act and any applicable state securities laws; (b) any subsequent sale of any such shares of Common Stock will be made either pursuant to an effective registration statement under the Securities Act and any applicable state securities laws, or pursuant to an exemption from registration under the Securities Act and such state securities laws; and (c) if requested by the Company, the Participant will submit a written statement, in form satisfactory to the Company, to the effect that such representation (x) is true and correct as of the date of vesting of any shares of Common Stock hereunder or (y) is true and correct as of the date of any sale of any such share, as applicable. As a further condition precedent to the delivery to the Participant of any shares of Common Stock subject to the Restricted Stock Units, the Participant will comply with all regulations and requirements of any regulatory authority having control of or supervision over the issuance or delivery of the shares of Common Stock and, in connection therewith, will execute any documents which the Company will in its sole discretion deem necessary or advisable.

7.8 <u>Non-Negotiable Terms</u>. The terms of this Agreement and the Restricted Stock Units are not negotiable, but the Participant may refuse to accept the Restricted Stock Units by notifying the Company's Chief Financial Officer in writing within thirty (30) day after the Grant Date set forth in the Grant Notice.

7.9 <u>Acknowledgement by the Participant</u>. In accepting the Restricted Stock Units, the Participant hereby acknowledges that:

(a) The Plan is established voluntarily by the Company, it is discretionary in nature, and it may be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan.

(b) The grant of the Restricted Stock Units is voluntary and occasional and does not create any contractual or other right to receive future awards of Restricted Stock Units, or benefits in lieu of Restricted Stock Units, even if Restricted Stock Units have been granted repeatedly in the past.

(c) All decisions with respect to future Restricted Stock Units award grants, if any, will be at the sole discretion of the Company.

(d) The Participant is voluntarily participating in the Plan.

------

(e) The award of Restricted Stock Units is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company, and which is outside the scope of the Participant's employment contract, if any.

(f) The award of Restricted Stock Units is not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company (including its Subsidiaries and Affiliates).

(g) The award of Restricted Stock Units or this Agreement will not be interpreted to form an employment contract with the Company (including its Subsidiaries and Affiliates).

(h) The future value of the shares of Common Stock subject to the Restricted Stock Units is unknown and cannot be predicted with certainty and if the Restricted Stock Units vest and the shares of Common Stock become issuable in accordance with the terms of this Agreement, the value of those shares of Common Stock may increase or decrease.

(i) In consideration of the grant of the Restricted Stock Units, no claim or entitlement to compensation or damages shall arise from termination of the Restricted Stock Units or diminution in value of the Restricted Stock Units or shares of Common Stock acquired upon vesting of the Restricted Stock Units resulting from termination of employment by the Company (for any reason whatsoever and whether or not in breach of applicable labor laws) and the Participant hereby irrevocably releases the Company and its Subsidiaries from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by acceptance of the Restricted Stock Units, the Participant shall be deemed irrevocably to have waived his or her entitlement to pursue such claim.

(j) In the event of termination of the Participant's employment with the Company (whether or not in breach of local labor laws), the Participant's right to receive the Restricted Stock Units and vest in the Restricted Stock Units under the Plan, if any, will terminate effective as of the date of termination of his or her active employment as determined in the sole discretion of the Committee and will not be extended by any notice of termination of employment or severance period provided to the Participant by contract or practice of the Company (including its Subsidiaries and Affiliates) or mandated under local law and the Committee will have the sole discretion to determine the date of termination of the Participant's active employment for purposes of the Restricted Stock Units.

(k) The Company (including its Subsidiaries and Affiliates) is not providing any tax, legal or financial advice, nor is the Company (including its Subsidiaries and Affiliates) making any recommendations regarding the Participant's participation in the Plan, acceptance of the Restricted Stock Units, acquisition of shares of Common Stock upon vesting of the Restricted Stock Units or any sale of such shares.

(l) The Participant has been advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.

\* \* \* \* \*

## Exhibit 10.47

**Exhibit 10.47**

**[Employee** – **Performance Share Units]**

**NOTICE OF PERFORMANCE SHARE UNIT GRANT UNDER THE** 

**QUMULUSAI, INC. 2026 EQUITY INCENTIVE PLAN**

QumulusAI, Inc., a Georgia corporation (the "<u>Company</u>"), pursuant to the QumulusAI, Inc. 2026 Equity Incentive Plan (as may be amended from time to time, the "<u>Plan</u>"), hereby grants to the individual named below (the "<u>Participant</u>") the number of performance share units, a form of Restricted Stock Units (as defined in the Plan) and Performance Awards (as defined in the Plan), set forth below (collectively, the "<u>Performance Share Units</u>"). The Performance Share Units are subject to all of the terms and conditions set forth in this Notice of Performance Share Unit Grant (this "<u>Grant Notice</u>"), in the Performance Share Unit Award Agreement attached hereto (the "<u>Award Agreement</u>"), and in the Plan, all of which are incorporated herein in their entirety. Capitalized terms not otherwise defined herein will have the meaning set forth in the Plan. This Performance Share Unit award grant has been made as of the grant date indicated below, which shall be referred to as the "<u>Grant Date</u>."

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| | |
|:---|:---|
| **Participant**: | <u> </u> |
| **Grant Date**: | <u> </u> |
| **Threshold Potential Payout**: | 50% of the Target Potential Payout |
| **Target Potential Payout**: | <u> </u> shares of Common Stock, subject to adjustment as provided in the Plan |
| **Maximum Potential Payout**: | 200% of the Target Potential Payout |
| **Performance Goal**: | Relative Total Shareholder Return, as described in Award Agreement |
| **Performance Period**: | <u> </u> |

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\* \* \* \* \*

**The Participant must accept this Performance Share Unit grant by executing this Grant Notice in the space provided below and returning such original execution copy to the Company or otherwise indicating affirmative acceptance of the Performance Share Unit grant electronically pursuant to procedures established by the Company and/or its third party administrator. The undersigned Participant acknowledges that he or she has received a copy of this Grant Notice, the Award Agreement, the Plan and the Plan Prospectus. As an express condition to the grant of the Performance Share Units hereunder, the Participant agrees to be bound by the terms of this Grant Notice, the Award Agreement and the Plan. The Participant has read carefully and in its entirety the Award Agreement and specifically the acknowledgements in Section 11.9 thereof. This Grant Notice, the Award Agreement and the Plan set forth the entire agreement and understanding of the Company and the Participant with respect to the grant, vesting and administration of this Performance Share Unit award and supersede all prior agreements, arrangements, plans and understandings. This Grant Notice (which includes the attached Award Agreement) may be executed in two counterparts each of which will be deemed an original and both of which together will constitute one and the same instrument.**

\* \* \* \* \*

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| | |
|:---|:---|
| **QUMULUSAI, INC.**  | **PARTICIPANT** |
| By: Michael Maniscalco | [Name of Participant] |
| Title: Chief Executive Officer |  |

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**PERFORMANCE SHARE UNIT AWARD AGREEMENT**

Pursuant to the Notice of Performance Share Unit Grant (the "<u>Grant Notice</u>") to which this Performance Share Unit Award Agreement (this "<u>Agreement</u>") is attached and which Grant Notice is included in and part of this Agreement, and subject to the terms of this Agreement and the QumulusAI, Inc. 2026 Equity Incentive Plan (as may be amended from time to time, the "<u>Plan</u>"), QumulusAI, Inc., a Georgia corporation (the "<u>Company</u>"), and the Participant named in the Grant Notice (the "<u>Participant</u>") agree as follows:

1. <u>Incorporation of Plan; Definitions</u>. The provisions of the Plan are hereby incorporated herein by reference. Except as otherwise expressly set forth herein, this Agreement will be construed in accordance with the provisions of the Plan and any capitalized terms not otherwise defined in this Agreement or in the Grant Notice will have the same meanings as set forth in the Plan. The provisions of this Agreement will be interpreted as to be consistent with the Plan and any ambiguities in this Agreement will be interpreted by reference to the Plan. In the event that any provision of this Agreement is not authorized by or is inconsistent with the terms of the Plan, the terms of the Plan will prevail. Pursuant to and in accordance with the terms of the Plan, the Committee will have final authority to interpret and construe the Plan and this Agreement and to make any and all determinations thereunder, and its decision will be final, binding and conclusive upon the Participant and his or her legal representatives in respect of any questions arising under the Plan or this Agreement. A copy of the Plan and the Plan Prospectus have been delivered to the Participant together with this Agreement.

2. <u>Grant of Performance Share Units</u>. The Company hereby grants to the Participant a target number of Performance Share Units, as set forth in the Grant Notice, subject to adjustment as provided in this Agreement and the Plan, and each of which, once vested and earned pursuant to this Agreement, will be settled in one (1) share of Common Stock, subject to the terms, conditions, restrictions and adjustments set forth herein and in the Plan. The Performance Share Units will not accrue or be paid any Dividend Equivalents.

3. <u>Performance and Time-Based Vesting; Determination of Amount of Earned Performance Share Units</u>.

3.1 <u>Performance and Time-Based Vesting</u>. Except as otherwise provided in this Section 3, Section 6 of this Agreement, the Plan or an Individual Agreement, the actual number of Performance Share Units that will be eligible to vest will be determined based on the achievement of the Company's Total Shareholder Return ("<u>TSR</u>") versus the Benchmark Companies (as defined in Section 3.2 of this Agreement), as measured over the three-year performance period set forth in the Grant Notice (the "<u>Performance Period</u>"). Any Performance Share Units that become eligible to vest after satisfaction of the applicable TSR goals with respect to the Performance Period are referred to herein as the "<u>Earned Performance Share Units</u>." In order to vest in any Earned Performance Share Units, the Participant must remain an Employee (as defined in the Plan) or a Consultant (as defined in the Plan) through the Certification Date (as defined below).

3.2 <u>Performance Goal: Relative Company TSR Versus Benchmark Companies</u>. The number of Earned Performance Share Units will be determined based on the level of achievement of TSR by the Company during the Performance Period, as compared to the TSR achieved by the companies comprising the Benchmark Companies. For purposes of this Agreement, the "<u>Benchmark Companies</u>" shall mean the companies listed on <u>Exhibit A</u> attached hereto, provided that a company shall be removed from the list of Benchmark Companies to the extent the stock of such company is not publicly traded on an established stock exchange or national market system at the end of the Performance Period.

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3.3 <u>Determination of Amount of Earned Performance Share Units</u>. The percentage of the target Performance Share Units, as set forth in the Grant Notice (the "<u>Target Performance Share Units</u>"), that become Earned Performance Share Units (if any) will be determined by the percentage derived from the table below, which percentage depends on the percentile ranking of the Company's TSR in relation to the TSR of each of the Benchmark Companies. To the extent that the Company's TSR results for the Performance Period fall between any levels set forth in the table below, the percentage of applicable Target Performance Share Units that will become Earned Performance Share Units with respect to the Performance Period will be determined based on linear interpolation using the Company TSR percentile rank amount in the table that is greater than but closest to the Company's results and the amount in the table that is less than but closest to the Company's results, and their corresponding percentages. For example and the avoidance of doubt, if the percentile ranking of the Company's TSR in relation to the TSR of the Benchmark Companies for the Performance Period is 67.5%, then 170% of the applicable Target Performance Share Units for the Performance Period will become Earned Performance Share Units. This is determined by interpolating on a linear basis between the TSR Percentile Rank levels of 65% and 70% and their corresponding percentages of attainment of 160% and 180%.

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| | |
|:---|:---|
| **Company TSR Percentile Rank in Relation to** <br> **Benchmark Companies for Performance Period** | **Earned Performance Share Units as a Percentage of** <br> **Target Performance Share Units<sup>(1)</sup>** |
| <25% | 0% |
| 25% | 50% |
| 30% | 60% |
| 35% | 70% |
| 40% | 80% |
| 45% | 90% |
| 50% | 100% |
| 55% | 120% |
| 60% | 140% |
| 65% | 160% |
| 70% | 180% |
| 75% | 200% |
| 80% | 200% |
| 85% | 200% |
| 90% | 200% |
| 95% | 200% |
| 100% | 200% |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) If TSR is negative, the number of Earned Performance Share Units will be capped at 100% of the number of Target Performance Share Units.

For purposes of the TSR calculations, the following rules shall apply. The beginning and ending prices for the Company's Common Stock and each stock of the Benchmark Companies shall be the average closing stock price during the thirty (30) calendar days ending on December 31,<u> </u><u> </u> and the last thirty (30) calendar days of the Performance Period, respectively. The prices for the Company's Common Stock and each stock of the Benchmark Companies will be adjusted for stock dividends, stock splits, spin-offs and other corporate changes having a similar effect.

All determinations regarding TSR shall be made by the Committee in its sole discretion and all such determinations shall be final and binding on all parties. For the avoidance of doubt, the Committee may make equitable adjustments to the TSR calculations with respect to the Company and each of the Benchmark Companies to account for changes in the capitalization of each such entity. Target Performance Share Units, if any, will be deemed to have become Earned Performance Share Units as of the date on which the Committee has certified in writing as to the level of achievement of the TSR goal. This certification shall be made no later than sixty (60) days following the end of the Performance Period (the date of such certification with respect to the Performance Period, the "<u>Certification Date</u>").

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Any Target Performance Share Units that fail to become Earned Performance Share Units on the Certification Date related to the Performance Period will terminate on the Certification Date for no consideration. Notwithstanding the foregoing, the number of Earned Performance Share Units arising from achievement of the TSR goal may not result in more than the Maximum Potential Payout subject to this Award Agreement becoming Earned Performance Share Units.

4. <u>Settlement; Issuance of Common Stock</u>. Earned Performance Share Units will be converted to whole shares of Common Stock (no fractional shares will be issued) which the Company will issue and deliver to the Participant (either by delivering one or more certificates for such shares or by entering such shares in book entry form in the name of the Participant or depositing such shares for the Participant's benefit with any broker with which the Participant has an account relationship or the Company has engaged to provide such services under the Plan, as determined by the Company in its sole discretion) within seventy four (74) days following the end of the Performance Period, except to the extent that shares of Common Stock are withheld to pay tax withholding obligations pursuant to Section 10 of this Agreement or the Participant has properly elected to defer income that may be attributable to such Earned Performance Share Units under a Company deferred compensation plan or arrangement.

5. <u>Committee Discretion</u>.

5.1 <u>Adjustment Events</u>. As provided in Section 9.6 of the Plan, any evaluation of performance by the Committee may include or exclude any of the following events that occurs during the Performance Period: (a) items related to a change in accounting principles; (b) items relating to financing activities; (c) expenses for restructuring or productivity initiatives; (d) other non-operating items; (e) items related to acquisitions; (f) items attributable to the business operations of any entity acquired by the Company during the Performance Period; (g) items related to the disposal of a business or segment of a business; (h) items related to discontinued operations that do not qualify as a segment of a business under applicable accounting standards; (i) items attributable to any stock dividend, stock split, combination or exchange of stock occurring during the Performance Period; (j) any other items of significant income or expense which are determined to be appropriate adjustments; (k) items relating to unusual or extraordinary corporate transactions, events or developments; (l) items related to amortization of acquired intangible assets; (m) items that are outside the scope of the Company's core, on-going business activities; (n) items related to acquired in-process research and development; (o) items relating to changes in tax laws; (p) items relating to major licensing or partnership arrangements; (q) items relating to asset impairment charges; (r) items relating to gains or losses for litigation, arbitration and contractual settlements; (s) foreign exchange gains and losses; or (t) items relating to any other unusual or nonrecurring events or changes in applicable laws, accounting principles or business conditions. In addition, the Committee may amend or modify the vesting criteria (including any Performance Goals or Performance Period) of the Performance Share Units based in whole or in part on the financial performance of the Company (or any Subsidiary or division, business unit, station, service group, region, territory or other sub-unit thereof) in recognition of unusual or nonrecurring events (including the events described above) affecting the Company or the financial statements of the Company or of changes in applicable laws, regulations or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent unintended dilution or enlargement of the benefits or potential benefits intended to be made available under the Performance Share Units. The determination of the Committee as to the foregoing adjustments, if any, will be final, conclusive and binding on the Grantee.

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5.2 <u>Discretion</u>. The Committee may decide, in its absolute discretion, to accelerate the vesting on the balance, or some lesser portion of the balance, of the Performance Share Units at any time. If so accelerated, the Performance Share Units will be considered to have vested as of the date specified by the Committee. If Participant is a U.S. taxpayer, the payment of shares of Common Stock vesting pursuant to this Section 5.2 shall in all cases be paid at a time or in a manner that ensures the Performance Share Units are exempt from, or comply with, Section 409A of the Code. The prior sentence may be superseded in a future agreement or amendment to this Award Agreement only by direct and specific reference to such sentence.

6. <u>Effect of Termination of Employment or Service</u>.

6.1 <u>Effect of Termination of Employment or Other Service Other Than Death or Disability</u>. Except as otherwise provided in an Individual Agreement, as of the date of termination of the Participant's employment or other service with the Company or one of its Subsidiaries or Affiliates, in either case, for any reason other than death or Disability of the Participant, then the Participant shall forfeit his or her rights to receive the shares of Common Stock subject to the Performance Share Units that have not vested pursuant to Section 3, 5 or 7 of this Agreement and been issued as of the date the Participant's employment or other service with the Company or one of its Subsidiaries or Affiliates terminates.

6.2 <u>Effect of Termination of Employment or Other Service Due to Death or Disability</u>. If the Participant dies or his or her employment or other service with the Company or one of its Subsidiaries or Affiliates is terminated by reason of his or her Disability while he or she is employed or providing other service to the Company or one of its Subsidiaries or Affiliates within one (1) year of the Grant Date, the Participant shall forfeit his or her rights to receive the shares of Common Stock subject to the Performance Share Units that have not vested pursuant to Section 3, 5, 6.1 or 7 of this Agreement as of the date the Participant's employment or other service with the Company or one of its Subsidiaries or Affiliates terminates. If the Participant dies or his or her employment or other service with the Company or one of its Subsidiaries or Affiliates is terminated by reason of his or her Disability while he or she is employed by or providing other service to the Company or one of its Subsidiaries or Affiliates, in each case one (1) year or more after the Grant Date, the Performance Share Units will become immediately vested with respect to that number of underlying shares of Common Stock subject to the Performance Share Units the rights to which would have vested based on the assumption that the Performance Goal was satisfied at the target level, prorated for the number of full months of the Participant's employment or other service during the Performance Period and such vested Performance Share Units shall be settled in shares of Common Stock as provided in Section 4 of this Agreement. The Participant shall forfeit his or her rights to receive all of the remaining shares of Common Stock subject to the Performance Share Units that have not vested.

6.3 <u>Effect of Change in Employee/Consultant Status</u>. The change in the Participant's status from that of an Employee to that of a Consultant will, for purposes of this Agreement, be deemed to result in a termination of such Participant's employment with the Company or one of its Subsidiaries or Affiliates, unless the Committee otherwise determines in its sole discretion. The change in the Participant's status from that of a Consultant to that of an Employee will not, for purposes of this Agreement, be deemed to result in a termination of such Participant's service as a Consultant, and such Participant will thereafter be deemed to be an Employee for purposes of this Agreement. Unless the Committee otherwise determines in its sole discretion, a Participant's employment or other service will, for purposes of this Agreement, be deemed to have terminated on the date recorded on the personnel or other records of the Company or one of its Subsidiaries or Affiliates for which the Participant provides employment or other service, as determined by the Committee in its sole discretion based upon such records. Notwithstanding the foregoing, if payment of the Performance Share Units is subject to Section 409A of the Code and payment is triggered by a termination of the Participant's employment or other service, such termination must also constitute a "separation from service" within the meaning of Section 409A of the Code, and any change in employment status that constitutes a "separation from service" under Section 409A of the Code will be treated as a termination of employment or termination of other service, as the case may be.

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6.4 <u>Effect of Actions Constituting Cause or Adverse Action; Forfeiture or Clawback</u>. The Performance Share Units are subject to the forfeiture provisions set forth in Section 13.5 of the Plan, including those applicable if the Participant is determined by the Committee to have taken any action that would constitute Cause or an Adverse Action and any forfeiture or clawback requirement under Applicable Law or any policy adopted from time to time by the Company.

7. <u>Effect of Change in Control</u>. Except as otherwise provided in an Individual Agreement between the Company and the Participant, if a Change in Control (as defined in an Individual Agreement between the Participant and the Company or if there is no such Individual Agreement or if it does not define Change in Control, then as defined in the Plan) occurs while the Participant is employed by or providing services to the Company or any Subsidiary and before the last day of the Performance Period, the following rules will apply:

(a) A number of Performance Share Units will become Earned Performance Share Units as of the date of the Change in Control (the "<u>Change in Control Date</u>") by treating the Change in Control Date as the last date of the Performance Period, and determining the degree of attainment of the TSR goal with respect to the Performance Period based on the standard terms set forth above, provided that the ending price for the Company's Common Stock for purposes of this calculation will be equal to the Transaction Value Per Share, as defined below.

(b) 100% of the Earned Performance Share Units outstanding on the Change in Control Date will vest on the Change in Control Date if these Performance Share Units are not continued, assumed or substituted with equivalent awards (with such adjustments as may be required or permitted by Section 4.4 of the Plan) by the surviving or successor organization (or a parent or subsidiary thereof) (the "<u>Successor</u>") and such Earned Performance Share Units shall be settled in shares of Common Stock as provided in Section 4 of this Agreement as if the end of the Performance Period was amended to be the Change in Control Date. A substitute equivalent award must (i) have a value at least equal to the value of the Performance Share Units being substituted; (ii) be the same type of award as the Performance Share Units being substituted; (iii) be earned to the extent earned at the time of and as a result of the Change in Control and have the same service-based condition through the end of the Performance Period; and (iv) have other terms and conditions (including vesting and effect of termination within one (1) year following a Change in Control) that are not less favorable to the Participant than the terms and conditions of the Performance Share Units being substituted, in each case, as determined by the Committee (as constituted prior to the Change in Control) in its sole discretion. If the Performance Share Units are continued, assumed or substituted by the Successor and within one (1) year following a Change in Control the Participant (i) is terminated by the Successor (or an Affiliate thereof) without Cause or (ii) the Participant resigns for Good Reason (as defined below), the Earned Performance Share Units will vest and such vested Earned Performance Share Units will be converted to Common Stock immediately thereafter as set forth in Section 4 of this Agreement and in the Plan as of the termination or resignation. For purposes of this Section 7(b), "Good Reason" means as defined in an Individual Agreement between the Participant and the Company but only if and to the extent such Good Reason constitutes "good reason" under Treas. Reg. Section 1.409A-1(n), or if there is no such Individual Agreement or if it does not define Good Reason, Good Reason means the assignment to the Participant of any duties materially inconsistent in any respect with the Participant's position (including a material negative change regarding the Participant's status, offices, titles or reporting requirements), authority, duties or responsibilities, or any other action by the Company which results in a material diminution in such position, authority, duties or responsibilities (but not occurring solely as a result of the Company's ceasing to be a publicly traded entity) existing immediately prior to the date of the Change in Control, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Participant; <u>provided</u>, <u>however</u>, "Good Reason" will not be deemed to exist unless (a) written notice of termination on account thereof is given by the Participant to the Company no later than sixty (60) days after the time at which the event or condition purportedly giving rise to Good Reason first occurs or arises; (b) if there exists (without regard to this clause (b)) an event or condition that constitutes Good Reason, the Company will have thirty (30) days from the date notice of such a termination is given to cure such event or condition and, if the Company does so, such event or condition will not constitute Good Reason hereunder and (c) if not cured, the Participant must resign from employment for a Good Reason event or condition within sixty (60) days following the last day of the Company's cure period. Any good faith determination of "Good Reason" made by the Committee will be conclusive. The Participant's mental or physical incapacity following the occurrence of an event described in above clauses will not affect the Participant's ability to terminate employment for Good Reason.

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(c) Any Performance Share Units that fail to become Earned Performance Share Units in connection with a Change in Control will terminate as of the Change in Control Date for no consideration.

(d) For purposes of this Award Agreement, "<u>Transaction Value Per Share</u>" means the sum of the value of all consideration that is distributable with respect to one share of Common Stock (factoring in the aggregate exercise price of outstanding stock options and warrants where such exercise price is not included in the value of consideration distributable to holders of capital stock in such Change in Control), assuming that all "milestone" or other "contingent consideration" that is eligible to be received by the holders of the Company's capital stock is deemed earned and paid out at the maximum level of achievement as of the date of such Change in Control, as such value is determined by the Board in good faith at the time of the Change in Control.

8. <u>Section 409A</u>. If any shares of Common Stock shall be issuable with respect to the Performance Share Units as a result of the Participant's "separation from service" at such time as the Participant is a "specified employee" within the meaning of Section 409A of the Code, then no shares shall be issued, except as permitted under Section 409A of the Code, prior to the earlier of (i) the date immediately after the end of the six-month period following the Participant's "separation from service", or (ii) the Participant's death. Payment of amounts under this Agreement (by issuance of shares of Common Stock or otherwise) is intended to comply with the requirements of Section 409A of the Code, and this Agreement shall in all respects be administered and construed to give effect to such intent. The Committee in its sole discretion may accelerate or delay the distribution of any payment under this Agreement to the extent allowed under Section 409A of the Code.

9. <u>Rights of Participant</u>.

9.1 <u>Employment or Other Service</u>. Nothing in this Agreement will interfere with or limit in any way the right of the Company or any Subsidiary to terminate the employment or service of the Participant at any time, nor confer upon the Participant any right to continue employment or service with the Company or any Subsidiary.

9.2 <u>Rights as a Shareholder</u>. The Participant will have no rights as, or privileges of, a shareholder of the Company, with respect to shares of Common Stock covered by the Performance Share Units unless and until the Participant becomes the holder of record of such shares of Common Stock issued in settlement of the Performance Share Units (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). The Performance Share Units will not accrue or be paid any Dividend Equivalents.

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9.3 <u>Restrictions on Transfer</u>. Except pursuant to testamentary will or the laws of descent and distribution or as otherwise expressly permitted by the Plan, no right or interest of the Participant in the Performance Share Units prior to the vesting, issuance or settlement of the Performance Share Units will be assignable or transferable, or subjected to any lien, during the lifetime of the Participant, either voluntarily or involuntarily, directly or indirectly, by operation of law or otherwise. Any attempt to transfer, assign or encumber the Performance Share Units other than in accordance with this Agreement and the Plan will be null and void and the Performance Share Units for which the restrictions have not lapsed will be forfeited and immediately returned to the Company.

10. <u>Withholding Taxes</u>. The Company is entitled to (a) withhold and deduct from future wages of the Participant (or from other amounts that may be due and owing to the Participant from the Company or a Subsidiary), or make other arrangements for the collection of, all amounts the Company reasonably determines are necessary to satisfy any and all federal, foreign, state and local withholding and employment related tax requirements attributable to the Performance Share Units, or (b) require the Participant promptly to remit the amount of such withholding to the Company before taking any action, including issuing any shares of Common Stock, with respect to the Performance Share Units. The Committee may, in its sole discretion and upon terms and conditions established by the Committee, permit or require the Participant to satisfy, in whole or in part, any withholding or employment related tax obligation in connection with the settlement of the Performance Share Units by withholding shares of Common Stock issuable upon settlement of the Performance Share Units. When withholding shares of Common Stock for taxes is effected under this Agreement and the Plan, it will be withheld only up to an amount based on the maximum statutory tax rates in the Participant's applicable tax jurisdiction or such other rate that will not trigger a negative accounting impact on the Company.

11. <u>Miscellaneous</u>.

11.1 <u>Governing Law</u>. The validity, construction, interpretation, administration and effect of this Agreement and any rules, regulations and actions relating to this Agreement will be governed by and construed exclusively in accordance with the laws of the State of Georgia, notwithstanding the conflicts of laws principles of any jurisdictions.

11.2 <u>Interpretation</u>. Any dispute regarding the interpretation of this Agreement will be submitted by the Participant or by the Company forthwith to the Committee for review. The resolution of such a dispute by the Committee will be final and binding on all parties.

11.3 <u>Successors and Assigns</u>. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement will inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Agreement will be binding upon the Participant and his or her heirs, executors, administrators, successors and assigns.

11.4 <u>Notices</u>. All notices, requests or other communications provided for in this Agreement must be made, if to the Company, to QumulusAI, Inc., Attn: Chief Financial Officer, 1130 Powers Ferry Pl SE, Marietta, Georgia 30067, and if to the Participant, to the last known mailing address of the Participant contained in the records of the Company. All notices, requests or other communications provided for in this Agreement must be made in writing either (a) by personal delivery, (b) by facsimile or electronic mail with confirmation of receipt, (c) by mailing in the United States mails or (d) by express courier service. The notice, request or other communication will be deemed to be received upon personal delivery, upon confirmation of receipt of facsimile or electronic mail transmission or upon receipt by the party entitled thereto if by United States mail or express courier service; <u>provided</u>, <u>however</u>, that if a notice, request or other communication sent to the Company is not received during regular business hours, it will be deemed to be received on the next succeeding business day of the Company.

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11.5 <u>Electronic Delivery and Acceptance</u>. The Company may, in its sole discretion, deliver any documents related to the Performance Share Units by electronic means or request the Participant's consent to participate in the Plan by electronic means. The Participant hereby consents to receive all applicable documentation by electronic delivery and to participate in the Plan through an on-line system established and maintained by the Company or a third party vendor designated by the Company.

11.6 <u>Other Laws</u>. The Company will have the right to refuse to issue to the Participant or transfer any shares of Common Stock subject to the Performance Share Units if the Company acting in its absolute discretion determines that the issuance or transfer of such shares might violate any Applicable Law.

11.7 <u>Investment Representation</u>. The Participant hereby represents and covenants that (a) any share of Common Stock acquired upon the settlement of the Performance Share Units will be acquired for investment and not with a view to the distribution thereof within the meaning of the Securities Act of 1933, as amended (the "<u>Securities Act</u>"), unless such acquisition has been registered under the Securities Act and any applicable state securities laws; (b) any subsequent sale of any such shares will be made either pursuant to an effective registration statement under the Securities Act and any applicable state securities laws, or pursuant to an exemption from registration under the Securities Act and such state securities laws; and (c) if requested by the Company, the Participant will submit a written statement, in form satisfactory to the Company, to the effect that such representation (x) is true and correct as of the date of issuance of any shares of Common Stock hereunder or (y) is true and correct as of the date of any sale of any such share, as applicable. As a further condition precedent to the delivery to the Participant of any shares of Common Stock subject to the Performance Share Units, the Participant will comply with all regulations and requirements of any regulatory authority having control of or supervision over the issuance or delivery of the shares and, in connection therewith, will execute any documents which the Company will in its sole discretion deem necessary or advisable.

11.8 <u>Non-Negotiable Terms</u>. The terms of this Agreement and the Performance Share Units are not negotiable, but the Participant may refuse to accept the Performance Share Units by notifying the Company's Chief Financial Officer in writing within thirty (30) day after the Grant Date set forth in the Grant Notice.

11.9 <u>Acknowledgement by the Participant</u>. In accepting the Performance Share Units, the Participant hereby acknowledges that:

(a) The Plan is established voluntarily by the Company, it is discretionary in nature, and it may be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan.

(b) The grant of the Performance Share Units is voluntary and occasional and does not create any contractual or other right to receive future awards of Performance Share Units, or benefits in lieu of Performance Share Units, even if Performance Share Units have been granted repeatedly in the past.

(c) All decisions with respect to future Performance Share Unit award grants, if any, will be at the sole discretion of the Company.

(d) The Participant is voluntarily participating in the Plan.

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(e) The award of Performance Share Units is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company, and which is outside the scope of the Participant's employment contract, if any.

(f) The grant of Performance Share Units is not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service, pension or retirement benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company or any Subsidiary.

(g) The Performance Share Units or this Agreement will not be interpreted to form an employment contract with the Company or any Subsidiary.

(h) The future value of the shares of Common Stock subject to the Performance Share Units is unknown and cannot be predicted with certainty and if the Performance Share Units vest and the shares of Common Stock become issuable in accordance with the terms of this Agreement, the value of those shares of Common Stock may increase or decrease.

(i) In consideration of the grant of the Performance Share Units, no claim or entitlement to compensation or damages shall arise from termination of the Performance Share Units or diminution in value of the Performance Share Units or shares of Common Stock acquired upon settlement of the Performance Share Units resulting from termination of employment by the Company (for any reason whatsoever and whether or not in breach of applicable labor laws) and the Participant hereby irrevocably releases the Company and its Subsidiaries from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by acceptance of the Performance Share Units, the Participant shall be deemed irrevocably to have waived his or her entitlement to pursue such claim.

(j) Except as otherwise provided in an Individual Agreement, in the event of termination of the Participant's employment with the Company (whether or not in breach of local labor laws), the Participant's right to receive the Performance Share Units and vest in the Performance Share Units under the Plan, if any, will terminate effective as of the date of termination of his or her active employment as determined in the sole discretion of the Committee and will not be extended by any notice of termination of employment or severance period provided to the Participant by contract or practice of the Company or any Subsidiary or mandated under local law and the Committee will have the sole discretion to determine the date of termination of the Participant's active employment for purposes of the Performance Share Units.

(k) Neither the Company nor any Subsidiary is providing any tax, legal or financial advice, nor is the Company or any Subsidiary making any recommendations regarding the Participant's participation in the Plan, acceptance of the Performance Share Units, acquisition of shares of Common Stock upon settlement of the Performance Share Units or any sale of such shares.

(l) The Participant has been advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.

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**<u>EXHIBIT A</u>**

**<u>Benchmark Companies</u>**

## Exhibit 10.48

**Exhibit 10.48**

**[Employee** – **Time-Based Vesting]**

**NOTICE OF OPTION GRANT UNDER THE** 

**QUMULUSAI, INC. 2026 EQUITY INCENTIVE PLAN**

QumulusAI, Inc., a Georgia corporation (the "<u>Company</u>"), pursuant to the QumulusAI, Inc. 2026 Equity Incentive Plan (as may be amended from time to time, the "<u>Plan</u>"), hereby grants to the individual named below (the "<u>Participant</u>") Incentive Stock Option (the "<u>Option</u>") to purchase from the Company that number of shares of Common Stock (the "<u>Shares</u>"), as indicated below at an exercise price per Share equal to the amount as indicated below (the "<u>Exercise Price</u>"). The Option is subject to all of the terms and conditions set forth in this Notice of Option Grant (this "<u>Grant Notice</u>"), in the Option Award Agreement attached hereto (the "<u>Award Agreement</u>"), and in the Plan, all of which are incorporated herein in their entirety. Capitalized terms not otherwise defined herein will have the meaning set forth in the Plan. This Option grant has been made as of the grant date indicated below, which shall be referred to as the "<u>Grant Date</u>."

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| | |
|:---|:---|
| **Grant ID**: | <u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u> |
| **Participant**: | <u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u> |
| Grant Date: | <u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u> |
| **Total Number of Shares Subject to Option**: | <u> </u><u> </u><u> </u><u> </u><u> </u>, subject to adjustment as provided in the Plan. |
| **Exercise Price Per Share**: | $<u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u>, subject to adjustment as provided in the Plan. |
| **Expiration Date**: | <u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u>, but no later than the ten (10) year anniversary of the Grant Date, as provided in Section 3.2 of the Award Agreement. |
| **Type of Option**: | Incentive Stock Option |
| **Vesting Schedule**: | Except as otherwise provided in Section 3 of the Award Agreement, the Participant's right to exercise the Option shall vest:<u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u><u> </u> |
|  | <u>Provided</u>, <u>however</u>, that the Participant remains continuously employed by the Company or any Subsidiary through the applicable vesting date. |

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**The Participant must accept the grant by executing this Grant Notice in the space provided below and returning the original execution copy to the Company or otherwise indicating affirmative acceptance of this grant electronically pursuant to procedures established by the Company and/or its third party administrator. The undersigned Participant acknowledges that he or she has received a copy of this Grant Notice, the Award Agreement, the Plan and the Plan Prospectus. As an express condition to this grant, the Participant agrees to be bound by the terms of this Grant Notice, the Award Agreement and the Plan. The Participant has read carefully and in its entirety the Award Agreement and specifically the acknowledgements in Section 8.9 thereof. This Grant Notice, the Award Agreement and the Plan set forth the entire agreement and understanding of the Company and the Participant with respect to the grant, vesting and administration of the Option award and supersede all prior agreements, arrangements, plans and understandings. This Grant Notice (which includes the attached Award Agreement) may be executed in two counterparts each of which will be deemed an original and both of which together will constitute one and the same instrument.**

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| | |
|:---|:---|
| **QUMULUSAI, INC.**  | **PARTICIPANT** |
| By: Michael Maniscalco | [Name of Participant] |
| Title: Chief Executive Officer |  |

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**OPTION AWARD AGREEMENT**

Pursuant to the Notice of Option Grant (the "<u>Grant Notice</u>") to which this Option Award Agreement (this "<u>Agreement</u>") is attached and which Grant Notice is included in and part of this Agreement, and subject to the terms of this Agreement and the QumulusAI, Inc. 2026 Equity Incentive Plan (as may be amended from time to time, the "<u>Plan</u>"), QumulusAI, Inc., a Georgia corporation (the "<u>Company</u>"), and the Participant named in the Grant Notice (the "<u>Participant</u>") agree as follows:

1. <u>Incorporation of Plan; Definitions</u>. The provisions of the Plan are hereby incorporated herein by reference. Except as otherwise expressly set forth herein, this Agreement will be construed in accordance with the provisions of the Plan and any capitalized terms not otherwise defined in this Agreement or in the Grant Notice will have the same meanings as set forth in the Plan. The provisions of this Agreement will be interpreted as to be consistent with the Plan and any ambiguities in this Agreement will be interpreted by reference to the Plan. In the event that any provision of this Agreement is not authorized by or is inconsistent with the terms of the Plan, the terms of the Plan will prevail. Pursuant to and in accordance with the terms of the Plan, the Committee will have final authority to interpret and construe the Plan and this Agreement and to make any and all determinations thereunder, and its decision will be final, binding and conclusive upon the Participant and his or her legal representatives in respect of any questions arising under the Plan or this Agreement. A copy of the Plan and the Plan Prospectus have been delivered to the Participant together with this Agreement.

2. <u>Grant of Option</u>. The Company hereby grants to the Participant an Incentive Stock Option (the "<u>Option</u>") to purchase from the Company that number of shares of Common Stock (collectively, the "<u>Shares</u>"), and at an exercise price per Share equal to the amount as indicated in the Grant Notice (the "<u>Exercise Price</u>"), all subject to adjustment as provided in the Plan, and subject to the terms, conditions and restrictions set forth herein and in the Plan. Subject to Section 7 of this Agreement, the Option is intended to be an "incentive stock option," as that term is used in Section 422 of the Code.

3. <u>Vesting and Exercisability of Option; Expiration of Option; Forfeiture</u>.

3.1 <u>Vesting and Exercisability of Option</u>. Except as otherwise provided under this Agreement, the Participant's right to exercise the Option shall vest in accordance with the Vesting Schedule set forth in the Grant Notice (each, a "<u>Vesting Date</u>"); <u>provided</u>, <u>however</u>, that the Participant remains continuously employed by the Company or any Subsidiary through the applicable Vesting Date.

3.2 <u>Duration of Exercisability</u>. Any installments provided for in the Vesting Schedule set forth in the Grant Notice are cumulative. Each such installment which becomes vested and exercisable pursuant to the Vesting Schedule set forth in the Grant Notice shall remain vested and exercisable until the Expiration Date of the Option set forth in the Grant Notice (the "<u>Expiration Date</u>") or until the Option becomes unexercisable under Section 3.4 of this Agreement; <u>provided</u>, <u>however</u>, that if the exercise of the vested portion of the Option is prevented by the provisions of Section 17 of the Plan, the vested portion of the Option will remain exercisable until thirty (30) days after the date such exercise first would no longer be prevented by such provisions, but in any event no later than the Expiration Date of such Option.

3.3 <u>Change in Control</u>. [Except as otherwise provided in an Individual Agreement between the Company and the Participant, upon a Change in Control, the Option will be subject to Section 15 of the Plan.]

OR

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[Except as otherwise provided in an Individual Agreement between the Company and the Participant, upon a Change in Control (as defined in an Individual Agreement between the Participant and the Company or if there is no such Individual Agreement or if it does not define Change in Control, then as defined in the Plan), the Option will be subject to the provisions below.

a. In the event of such a Change in Control, the surviving or successor organization (or a parent or subsidiary thereof) (the "<u>Successor</u>") may continue, assume or substitute equivalent awards (with such adjustments as may be required or permitted by Section 4.4 of the Plan). A substitute equivalent award must (i) have a value at least equal to the value of the Option being substituted; (ii) be the same type of award as the Option being substituted; (iii) be vested to the extent vested at the time of and as a result of the Change in Control and (iv) have other terms and conditions (including vesting, exercisability and effect of termination within one (1) year following a Change in Control) that are not less favorable to the Participant than the terms and conditions of the Option being substituted, in each case, as determined by the Committee (as constituted prior to the Change in Control) in its sole discretion. If the Option is continued, assumed or substituted by the Successor and within one (1) year following a Change in Control the Participant (i) is terminated by the Successor (or an Affiliate thereof) without Cause or (ii) the Participant resigns for Good Reason (as defined below), the Option will vest and become immediately exercisable as of the termination or resignation and will remain exercisable until the earlier of the expiration of its full specified term or the first anniversary of the date of such termination or resignation. For purposes of this Section 3.3(a), "<u>Good Reason</u>" means as defined in an Individual Agreement between the Participant and the Company or if there is no such Individual Agreement or if it does not define Good Reason, Good Reason means the assignment to the Participant of any duties materially inconsistent in any respect with the Participant's position (including a material negative change regarding the Participant's status, offices, titles or reporting requirements), authority, duties or responsibilities, or any other action by the Company which results in a material diminution in such position, authority, duties or responsibilities (but not occurring solely as a result of the Company's ceasing to be a publicly traded entity) existing immediately prior to the date of the Change in Control, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Participant; <u>provided</u>, <u>however</u>, "Good Reason" will not be deemed to exist unless (a) written notice of termination on account thereof is given by the Participant to the Company no later than sixty (60) days after the time at which the event or condition purportedly giving rise to Good Reason first occurs or arises; (b) if there exists (without regard to this clause (b)) an event or condition that constitutes Good Reason, the Company will have thirty (30) days from the date notice of such a termination is given to cure such event or condition and, if the Company does so, such event or condition will not constitute Good Reason hereunder and (c) if not cured, the Participant must resign from employment for a Good Reason event or condition within sixty (60) days following the last day of the Company's cure period. Any good faith determination of "Good Reason" made by the Committee will be conclusive. The Participant's mental or physical incapacity following the occurrence of an event described in above clauses will not affect the Participant's ability to terminate employment for Good Reason.

b. In the event of such a Change in Control, any outstanding Option that is not continued, assumed or substituted with equivalent awards by the Successor pursuant to Section 3.3(a) above, the Option, effective immediately prior to such Change in Control but conditioned upon the completion of such Change in Control, will be fully vested and exercisable and the Committee will either (1) give a Participant a reasonable opportunity to exercise the Option before the transaction resulting in the Change in Control or (2) pay the Participant the difference between the exercise price for such Option and the per Share consideration provided to other similarly situated shareholders in such Change in Control; <u>provided</u>, <u>however</u>, that if the exercise price of such Option exceeds the aforementioned consideration provided, then the Option will be canceled and terminated without any payment. In either case, such Option will be cancelled.]

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3.4 <u>Effect of Termination of Employment</u>. Except as otherwise provided in Section 13.4 or 13.5 of the Plan or an Individual Agreement between the Company or any Subsidiary and the Participant: (a) if the Participant's employment with the Company and all Subsidiaries is terminated by reason of the Participant's death, then the Option will vest and become exercisable immediately as to a pro rata percentage of the unvested portion of the Option scheduled to vest on the next applicable Vesting Date, with such proration based on the number of days during which the Participant was continuously employed beginning on the Grant Date, or if a Vesting Date has occurred, the most recent Vesting Date, and ending on the next applicable Vesting Date, multiplied by the number of Shares subject to the Option which were scheduled to vest on the next applicable Vesting Date, and the vested portion of the Option will remain exercisable for a period of one (1) year after the date of such termination (but in no event after the Expiration Date); (b) if the Participant's employment with the Company and all Subsidiaries is terminated by reason of the Participant's Disability, then the Option will, to the extent exercisable as of the date of such termination, remain exercisable for a period of one (1) year after the date of such termination (but in no event after the Expiration Date); and (c) if the Participant's employment with the Company and all Subsidiaries is terminated for any reason other than death or Disability, then the Option will, to the extent exercisable as of the date of such termination, remain exercisable for a period of ninety (90) days after the date of such termination (but in no event after the Expiration Date).

3.5 <u>Effect of Actions Constituting Cause or Adverse Action; Forfeiture or Clawback</u>. The Option is subject to the forfeiture provisions set forth in Section 13.5 of the Plan, including those applicable if the Participant is determined by the Committee to have taken any action that would constitute Cause or an Adverse Action and any forfeiture or clawback requirement under Applicable Law or any policy adopted from time to time by the Company.

4. <u>Method of Exercise</u>.

4.1 <u>Notice</u>. The Option may be exercised by the Participant in whole or in part from time to time, subject to the vesting and other conditions contained in the Plan and in this Agreement, by delivery, in person, by facsimile or electronic transmission (if confirmed) or through the mail, to the Company at its principal executive office in Georgia (Attention: Chief Financial Officer), of a written notice of exercise. Such notice must be in a form satisfactory to the Committee, must identify the Option, must specify the number of Shares with respect to which the Option is being exercised, and must be signed by the person or persons so exercising the Option. Such notice must be accompanied by payment in full of the total purchase price of the Shares purchased. If the Option is being exercised, as provided by the Plan, by any person or persons other than the Participant, the notice must be accompanied by appropriate proof of right of such person or persons to exercise the Option. As soon as practicable after the effective exercise of the Option, the Participant will be recorded on the books of the Company as the owner of the Shares purchased, and the Company will deliver to the Participant one or more duly issued stock certificates or book-entry notations evidencing such ownership.

4.2 <u>Payment</u>. The total purchase price of the Shares to be purchased upon exercise of the Option must be paid entirely in cash or cash equivalent (including check, bank draft or money order); <u>provided</u>, <u>however</u>, that the Committee, in its sole discretion, may allow such payments to be made, in whole or in part, by: (i) tender, or attestation as to ownership, of Previously Acquired Shares; (ii) a Broker Exercise Notice; (iii) a "net exercise" pursuant to Section 6.5(b) of the Plan; (iv) a promissory note (on terms acceptable to the Committee in its sole discretion); (v) such other consideration as may be approved by the Committee from time to time; or (vi) a combination of such methods.

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5. <u>Rights of Participant</u>.

5.1 <u>Employment</u>. Nothing in this Agreement will interfere with or limit in any way the right of the Company or any Subsidiary to terminate the employment of the Participant at any time, nor confer upon the Participant any right to continue employment with the Company or any Subsidiary.

5.2 <u>Rights as a Shareholder</u>. The Participant will have no rights as, or privileges of, a shareholder of the Company, including, without limitation, voting rights and rights to dividends, with respect to Shares of Common Stock issuable upon exercise of the Option unless and until the Participant exercises the Option and becomes the holder of record of such Shares of Common Stock (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment shall be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 4.4 of the Plan.

5.3 <u>Restrictions on Transfer</u>. Except pursuant to testamentary will or the laws of descent and distribution or as otherwise expressly permitted by the Plan, no right or interest of the Participant in the Option prior to exercise of the Option will be assignable or transferable, or subjected to any lien, during the lifetime of the Participant, either voluntarily or involuntarily, directly or indirectly, by operation of law or otherwise. Any attempt to transfer, assign or encumber the Option other than in accordance with this Agreement and the Plan will be null and void and the Option will be forfeited and immediately returned to the Company.

6. <u>Withholding Taxes</u>. The Company is entitled to (a) withhold and deduct from future wages of the Participant (or from other amounts that may be due and owing to the Participant from the Company or a Subsidiary), or make other arrangements for the collection of, all amounts the Company reasonably determines are necessary to satisfy any and all federal, foreign, state and local withholding and employment related tax requirements attributable to the Option, including the grant, vesting or exercise of, the Option, or (b) require the Participant promptly to remit the amount of such withholding to the Company before taking any action, including issuing any Shares upon exercise of the Option. The Committee may, in its sole discretion and upon terms and conditions established by the Committee, permit or require the Participant to satisfy, in whole or in part, any withholding or employment related tax obligation in connection with the Option by withholding Shares issuable upon exercise of the Option. When withholding Shares for taxes is effected under this Agreement and the Plan, it will be withheld only up to an amount based on the maximum statutory tax rates in the Participant's applicable tax jurisdiction or such other rate that will not trigger a negative accounting impact on the Company.

7. <u>Incentive Stock Option Limitations.</u>

7.1 <u>Limitation on Amount.</u> To the extent that the aggregate Fair Market Value (determined as of the date of grant) of the shares of Common Stock with respect to which incentive stock options (within the meaning of Section 422 of the Code) are exercisable for the first time by the Participant during any calendar year (under the Plan and any other incentive stock option plans of the Company or any subsidiary or parent corporation of the Company (within the meaning of the Code)) exceeds $100,000 (or such other amount as may be prescribed by the Code from time to time), such excess incentive stock options will be treated as non-statutory stock options in the manner set forth in the Plan.<u> </u>

7.2 <u>Limitation on Exercisability; Disposition of Option Shares.</u> Any incentive stock option that remains unexercised more than one year following termination of employment by reason of death or disability or more than three months following termination for any reason other than death or Disability will thereafter be deemed to be a non-statutory stock option. In addition, in the event that a disposition (as defined in Section 424(c) of the Code) of shares of Common Stock acquired pursuant to the exercise of an incentive stock option occurs prior to the expiration of two years after its date of grant or the expiration of one year after its date of exercise (a "disqualifying disposition"), such incentive stock option will, to the extent of such disqualifying disposition, be treated in a manner similar to a non-statutory stock option. The Participant shall notify the Company in writing with thirty (30) days after a disqualifying disposition of the date and terms of such disposition and such other information concerning the disposition as the Company reasonably determines it is required to have for tax purposes.

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7.3 <u>No Representation or Warranty</u>. Section 422 of the Code and the rules and regulations thereunder are complex, and neither the Plan nor this Agreement purports to summarize or otherwise set forth all of the conditions that need to be satisfied in order for the Option to qualify as an incentive stock option. In addition, the Option may contain terms and conditions that allow for exercise of the Option beyond the periods permitted by Section 422 of the Code, including, without limitation, the periods described in Section 7.2 of this Agreement. Accordingly, the Company makes no representation or warranty regarding whether the exercise of the Option will qualify as the exercise of an incentive stock option, and the Company recommends that the Participant consult with the Participant's own advisors before making any determination regarding the exercise of the Option or the sale of the shares underlying the Option.

8. <u>Miscellaneous</u>.

8.1 <u>Governing Law</u>. The validity, construction, interpretation, administration and effect of this Agreement and any rules, regulations and actions relating to this Agreement will be governed by and construed exclusively in accordance with the laws of the State of Georgia, notwithstanding the conflicts of laws principles of any jurisdictions.

8.2 <u>Interpretation</u>. Any dispute regarding the interpretation of this Agreement will be submitted by the Participant or by the Company forthwith to the Committee for review. The resolution of such a dispute by the Committee will be final and binding on all parties.

8.3 <u>Successors and Assigns</u>. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement will inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Agreement will be binding upon the Participant and his or her heirs, executors, administrators, successors and assigns.

8.4 <u>Notices</u>. All notices, requests or other communications provided for in this Agreement must be made, if to the Company, to QumulusAI, Inc., Attn: Chief Financial Officer, 1130 Powers Ferry Pl SE, Marietta, Georgia 30067, and if to the Participant, to the last known mailing address of the Participant contained in the records of the Company. All notices, requests or other communications provided for in this Agreement must be made in writing either (a) by personal delivery, (b) by facsimile or electronic mail with confirmation of receipt, (c) by mailing in the United States mails or (d) by express courier service. The notice, request or other communication will be deemed to be received upon personal delivery, upon confirmation of receipt of facsimile or electronic mail transmission or upon receipt by the party entitled thereto if by United States mail or express courier service; <u>provided</u>, <u>however</u>, that if a notice, request or other communication sent to the Company is not received during regular business hours, it will be deemed to be received on the next succeeding business day of the Company.

8.5 <u>Electronic Delivery and Acceptance</u>. The Company may, in its sole discretion, deliver any documents related to the Option by electronic means or request the Participant's consent to participate in the Plan by electronic means. The Participant hereby consents to receive all applicable documentation by electronic delivery and to participate in the Plan through an on-line system established and maintained by the Company or a third party vendor designated by the Company.

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8.6 <u>Other Laws</u>. The Company will have the right to refuse to issue to the Participant Shares upon exercise of the Option if the Company acting in its absolute discretion determines that the issuance or transfer of such Shares might violate any Applicable Law.

8.7 <u>Investment Representation</u>. The Participant hereby represents and covenants that (a) any Share acquired upon exercise of the Option will be acquired for investment and not with a view to the distribution thereof within the meaning of the Securities Act of 1933, as amended (the "<u>Securities Act</u>"), unless such acquisition has been registered under the Securities Act and any applicable state securities laws; (b) any subsequent sale of any such Shares will be made either pursuant to an effective registration statement under the Securities Act and any applicable state securities laws, or pursuant to an exemption from registration under the Securities Act and such state securities laws; and (c) if requested by the Company, the Participant will submit a written statement, in form satisfactory to the Company, to the effect that such representation (x) is true and correct as of the date of vesting of any Shares hereunder or (y) is true and correct as of the date of any sale of any such Share, as applicable. As a further condition precedent to the delivery to the Participant of any Shares upon exercise of the Option, the Participant will comply with all regulations and requirements of any regulatory authority having control of or supervision over the issuance or delivery of the Shares and, in connection therewith, will execute any documents which the Company will in its sole discretion deem necessary or advisable.

8.8 <u>Non-Negotiable Terms</u>. The terms of this Agreement and the Option are not negotiable, but the Participant may refuse to accept the Option by notifying the Company's Chief Financial Officer in writing within thirty (30) day after the Grant Date set forth in the Grant Notice.

8.9 <u>Acknowledgement by the Participant</u>. In accepting the Option, the Participant hereby acknowledges that:

(a) The Plan is established voluntarily by the Company, it is discretionary in nature, and it may be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan.

(b) The grant of the Option is voluntary and occasional and does not create any contractual or other right to receive future Option grants, or benefits in lieu of Options, even if Options have been granted repeatedly in the past.

(c) All decisions with respect to future Option grants, if any, will be at the sole discretion of the Company.

(d) The Participant is voluntarily participating in the Plan.

(e) The award of Options is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company, and which is outside the scope of the Participant's employment contract, if any.

(f) The award of Options is not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company or any Subsidiary.

(g) The award of Options or this Agreement will not be interpreted to form an employment contract with the Company or any Subsidiary.

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(h) The future value of the Shares issuable upon exercise of the Option is unknown and cannot be predicted with certainty and if the Option vest and is exercised by the Participant, the value of those Shares may increase or decrease.

(i) In consideration of the grant of the Option, no claim or entitlement to compensation or damages shall arise from termination of the Option or diminution in value of the Shares acquired upon exercise of the Option resulting from termination of employment by the Company (for any reason whatsoever and whether or not in breach of applicable labor laws) and the Participant hereby irrevocably releases the Company and its Subsidiaries from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by acceptance of the Option, the Participant shall be deemed irrevocably to have waived his or her entitlement to pursue such claim.

(j) In the event of termination of the Participant's employment with the Company (whether or not in breach of local labor laws), the Participant's right to receive the Option and vest in the Option under the Plan, if any, will terminate effective as of the date of termination of his or her active employment as determined in the sole discretion of the Committee and will not be extended by any notice of termination of employment or severance period provided to the Participant by contract or practice of the Company or any Subsidiary or mandated under local law and the Committee will have the sole discretion to determine the date of termination of the Participant's active employment for purposes of the Option.

(k) Neither the Company nor any Subsidiary is providing any tax, legal or financial advice, nor is the Company or any Subsidiary making any recommendations regarding the Participant's participation in the Plan, acceptance of the Option, acquisition of Shares upon vesting and exercise of the Option or any sale of such Shares.

(l) The Participant has been advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.

\* \* \* \* \*

## Exhibit 10.49

**Exhibit 10.49**

**[Employee** – **Time-Based Vesting]**

**NOTICE OF OPTION GRANT UNDER THE** 

**QUMULUSAI, INC. 2026 EQUITY INCENTIVE PLAN**

QumulusAI, Inc., a Georgia corporation (the "<u>Company</u>"), pursuant to the QumulusAI, Inc. 2026 Equity Incentive Plan (as may be amended from time to time, the "<u>Plan</u>"), hereby grants to the individual named below (the "<u>Participant</u>") a Non-Statutory Stock Option (the "<u>Option</u>") to purchase from the Company that number of shares of Common Stock (the "<u>Shares</u>"), as indicated below at an exercise price per Share equal to the amount as indicated below (the "<u>Exercise Price</u>"). The Option is subject to all of the terms and conditions set forth in this Notice of Option Grant (this "<u>Grant Notice</u>"), in the Option Award Agreement attached hereto (the "<u>Award Agreement</u>"), and in the Plan, all of which are incorporated herein in their entirety. Capitalized terms not otherwise defined herein will have the meaning set forth in the Plan. This Option grant has been made as of the grant date indicated below, which shall be referred to as the "<u>Grant Date</u>."

---

| | |
|:---|:---|
| **Grant ID**: | <u> </u> |
| **Participant**: | <u> </u> |
| Grant Date: | <u> </u> |
| **Total Number of Shares Subject to Option**: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>, subject to adjustment as provided in the Plan.</u> |
| **Exercise Price Per Share**: | $<u> </u>, subject to adjustment as provided in the Plan. |
| **Expiration Date**: | <u> </u>, but no later than the ten (10) year anniversary of the Grant Date, as provided in Section 3.2 of the Award Agreement. |
| **Type of Option**: | Non-Statutory Stock Option |
| **Vesting Schedule**: | Except as otherwise provided in Section 3 of the Award Agreement, the Participant's right to exercise the Option shall vest:<u> </u> |
|  | <u>Provided</u>, <u>however</u>, that the Participant remains continuously employed by or provides services to the Company or any Subsidiary through the applicable vesting date. |

---

\* \* \*

**The Participant must accept the grant by executing this Grant Notice in the space provided below and returning the original execution copy to the Company or otherwise indicating affirmative acceptance of this grant electronically pursuant to procedures established by the Company and/or its third party administrator. The undersigned Participant acknowledges that he or she has received a copy of this Grant Notice, the Award Agreement, the Plan and the Plan Prospectus. As an express condition to this grant, the Participant agrees to be bound by the terms of this Grant Notice, the Award Agreement and the Plan. The Participant has read carefully and in its entirety the Award Agreement and specifically the acknowledgements in Section 7.9 thereof. This Grant Notice, the Award Agreement and the Plan set forth the entire agreement and understanding of the Company and the Participant with respect to the grant, vesting and administration of the Option award and supersede all prior agreements, arrangements, plans and understandings. This Grant Notice (which includes the attached Award Agreement) may be executed in two counterparts each of which will be deemed an original and both of which together will constitute one and the same instrument.**

---

| | |
|:---|:---|
| **QUMULUSAI, INC.**  | **PARTICIPANT** |
| By: Michael Maniscalco | [Name of Participant] |
| Title: Chief Executive Officer |  |

---

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**OPTION AWARD AGREEMENT**

Pursuant to the Notice of Option Grant (the "<u>Grant Notice</u>") to which this Option Award Agreement (this "<u>Agreement</u>") is attached and which Grant Notice is included in and part of this Agreement, and subject to the terms of this Agreement and the QumulusAI, Inc. 2026 Equity Incentive Plan (as may be amended from time to time, the "<u>Plan</u>"), QumulusAI, Inc., a Georgia corporation (the "<u>Company</u>"), and the Participant named in the Grant Notice (the "<u>Participant</u>") agree as follows:

1. <u>Incorporation of Plan; Definitions</u>. The provisions of the Plan are hereby incorporated herein by reference. Except as otherwise expressly set forth herein, this Agreement will be construed in accordance with the provisions of the Plan and any capitalized terms not otherwise defined in this Agreement or in the Grant Notice will have the same meanings as set forth in the Plan. The provisions of this Agreement will be interpreted as to be consistent with the Plan and any ambiguities in this Agreement will be interpreted by reference to the Plan. In the event that any provision of this Agreement is not authorized by or is inconsistent with the terms of the Plan, the terms of the Plan will prevail. Pursuant to and in accordance with the terms of the Plan, the Committee will have final authority to interpret and construe the Plan and this Agreement and to make any and all determinations thereunder, and its decision will be final, binding and conclusive upon the Participant and his or her legal representatives in respect of any questions arising under the Plan or this Agreement. A copy of the Plan and the Plan Prospectus have been delivered to the Participant together with this Agreement.

2. <u>Grant of Option</u>. The Company hereby grants to the Participant a Non-Statutory Stock Option (the "<u>Option</u>") to purchase from the Company that number of shares of Common Stock (collectively, the "<u>Shares</u>"), and at an exercise price per Share equal to the amount as indicated in the Grant Notice (the "<u>Exercise Price</u>"), all subject to adjustment as provided in the Plan, and subject to the terms, conditions and restrictions set forth herein and in the Plan. The Option is not intended to satisfy the requirements of Section 422 of the Code and thus shall be a Non-Statutory Stock Option as that term is defined in the Plan.

3. <u>Vesting and Exercisability of Option; Expiration of Option; Forfeiture</u>.

3.1 <u>Vesting and Exercisability of Option</u>. Except as otherwise provided under this Agreement, the Participant's right to exercise the Option shall vest in accordance with the Vesting Schedule set forth in the Grant Notice (each, a "<u>Vesting Date</u>"); <u>provided</u>, <u>however</u>, that the Participant remains continuously employed by or provides services to the Company or any Subsidiary through the applicable Vesting Date.

3.2 <u>Duration of Exercisability</u>. Any installments provided for in the Vesting Schedule set forth in the Grant Notice are cumulative. Each such installment which becomes vested and exercisable pursuant to the Vesting Schedule set forth in the Grant Notice shall remain vested and exercisable until the Expiration Date of the Option set forth in the Grant Notice (the "<u>Expiration Date</u>") or until the Option becomes unexercisable under Section 3.4 of this Agreement; <u>provided</u>, <u>however</u>, that if the exercise of the vested portion of the Option is prevented by the provisions of Section 17 of the Plan, the vested portion of the Option will remain exercisable until thirty (30) days after the date such exercise first would no longer be prevented by such provisions, but in any event no later than the Expiration Date of such Option.

3.3 <u>Change in Control</u>. [Except as otherwise provided in an Individual Agreement between the Company and the Participant, upon a Change in Control, the Option will be subject to Section 15 of the Plan.]

OR

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[Except as otherwise provided in an Individual Agreement between the Company and the Participant, upon a Change in Control (as defined in an Individual Agreement between the Participant and the Company or if there is no such Individual Agreement or if it does not define Change in Control, then as defined in the Plan), the Option will be subject to the provisions below.

a. In the event of such a Change in Control, the surviving or successor organization (or a parent or subsidiary thereof) (the "<u>Successor</u>") may continue, assume or substitute equivalent awards (with such adjustments as may be required or permitted by Section 4.4 of the Plan). A substitute equivalent award must (i) have a value at least equal to the value of the Option being substituted; (ii) be the same type of award as the Option being substituted; (iii) be vested to the extent vested at the time of and as a result of the Change in Control and (iv) have other terms and conditions (including vesting, exercisability and effect of termination within one (1) year following a Change in Control) that are not less favorable to the Participant than the terms and conditions of the Option being substituted, in each case, as determined by the Committee (as constituted prior to the Change in Control) in its sole discretion. If the Option is continued, assumed or substituted by the Successor and within one (1) year following a Change in Control the Participant (i) is terminated by the Successor (or an Affiliate thereof) without Cause or (ii) the Participant resigns for Good Reason (as defined below), the Option will vest and become immediately exercisable as of the termination or resignation and will remain exercisable until the earlier of the expiration of its full specified term or the first anniversary of the date of such termination or resignation. For purposes of this Section 3.3(a), "<u>Good Reason</u>" means as defined in an Individual Agreement between the Participant and the Company or if there is no such Individual Agreement or if it does not define Good Reason, Good Reason means the assignment to the Participant of any duties materially inconsistent in any respect with the Participant's position (including a material negative change regarding the Participant's status, offices, titles or reporting requirements), authority, duties or responsibilities, or any other action by the Company which results in a material diminution in such position, authority, duties or responsibilities (but not occurring solely as a result of the Company's ceasing to be a publicly traded entity) existing immediately prior to the date of the Change in Control, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Participant; <u>provided</u>, <u>however</u>, "Good Reason" will not be deemed to exist unless (a) written notice of termination on account thereof is given by the Participant to the Company no later than sixty (60) days after the time at which the event or condition purportedly giving rise to Good Reason first occurs or arises; (b) if there exists (without regard to this clause (b)) an event or condition that constitutes Good Reason, the Company will have thirty (30) days from the date notice of such a termination is given to cure such event or condition and, if the Company does so, such event or condition will not constitute Good Reason hereunder and (c) if not cured, the Participant must resign from employment for a Good Reason event or condition within sixty (60) days following the last day of the Company's cure period. Any good faith determination of "Good Reason" made by the Committee will be conclusive. The Participant's mental or physical incapacity following the occurrence of an event described in above clauses will not affect the Participant's ability to terminate employment for Good Reason.

b. In the event of such a Change in Control, any outstanding Option that is not continued, assumed or substituted with equivalent awards by the Successor pursuant to Section 3.3(a) above, the Option, effective immediately prior to such Change in Control but conditioned upon the completion of such Change in Control, will be fully vested and exercisable and the Committee will either (1) give a Participant a reasonable opportunity to exercise the Option before the transaction resulting in the Change in Control or (2) pay the Participant the difference between the exercise price for such Option and the per Share consideration provided to other similarly situated shareholders in such Change in Control; <u>provided</u>, <u>however</u>, that if the exercise price of such Option exceeds the aforementioned consideration provided, then the Option will be canceled and terminated without any payment. In either case, such Option will be cancelled.]

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3.4 <u>Effect of Termination of Employment or Other Service</u>. Except as otherwise provided in Section 13.4 or 13.5 of the Plan or an Individual Agreement between the Company or any Subsidiary and the Participant: (a) if the Participant's employment or service with the Company and all Subsidiaries is terminated by reason of the Participant's death, then the Option will vest and become exercisable immediately as to a pro rata percentage of the unvested portion of the Option scheduled to vest on the next applicable Vesting Date, with such proration based on the number of days during which the Participant was continuously employed by the Company or provided services to the Company or a Subsidiary beginning on the Grant Date, or if a Vesting Date has occurred, the most recent Vesting Date, and ending on the next applicable Vesting Date, multiplied by the number of Shares subject to the Option which were scheduled to vest on the next applicable Vesting Date, and the vested portion of the Option will remain exercisable for a period of one (1) year after the date of such termination (but in no event after the Expiration Date); (b) if the Participant's employment or service with the Company and all Subsidiaries is terminated by reason of the Participant's Disability, then the Option will, to the extent exercisable as of the date of such termination, remain exercisable for a period of one (1) year after the date of such termination (but in no event after the Expiration Date); and (c) if the Participant's employment or service with the Company and all Subsidiaries is terminated for any reason other than death or Disability, then the Option will, to the extent exercisable as of the date of such termination, remain exercisable for a period of ninety (90) days after the date of such termination (but in no event after the Expiration Date).

3.5 <u>Effect of Actions Constituting Cause or Adverse Action; Forfeiture or Clawback</u>. The Option is subject to the forfeiture provisions set forth in Section 13.5 of the Plan, including those applicable if the Participant is determined by the Committee to have taken any action that would constitute Cause or an Adverse Action and any forfeiture or clawback requirement under Applicable Law or any policy adopted from time to time by the Company.

4. <u>Method of Exercise</u>.

4.1 <u>Notice</u>. The Option may be exercised by the Participant in whole or in part from time to time, subject to the vesting and other conditions contained in the Plan and in this Agreement, by delivery, in person, by facsimile or electronic transmission (if confirmed) or through the mail, to the Company at its principal executive office in Georgia (Attention: Chief Financial Officer), of a written notice of exercise. Such notice must be in a form satisfactory to the Committee, must identify the Option, must specify the number of Shares with respect to which the Option is being exercised, and must be signed by the person or persons so exercising the Option. Such notice must be accompanied by payment in full of the total purchase price of the Shares purchased. If the Option is being exercised, as provided by the Plan, by any person or persons other than the Participant, the notice must be accompanied by appropriate proof of right of such person or persons to exercise the Option. As soon as practicable after the effective exercise of the Option, the Participant will be recorded on the books of the Company as the owner of the Shares purchased, and the Company will deliver to the Participant one or more duly issued stock certificates or book-entry notations evidencing such ownership.

4.2 <u>Payment</u>. The total purchase price of the Shares to be purchased upon exercise of the Option must be paid entirely in cash or cash equivalent (including check, bank draft or money order); <u>provided</u>, <u>however</u>, that the Committee, in its sole discretion, may allow such payments to be made, in whole or in part, by: (i) tender, or attestation as to ownership, of Previously Acquired Shares; (ii) a Broker Exercise Notice; (iii) a "net exercise" pursuant to Section 6.5(b) of the Plan; (iv) a promissory note (on terms acceptable to the Committee in its sole discretion); (v) such other consideration as may be approved by the Committee from time to time; or (vi) a combination of such methods.

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5. <u>Rights of Participant</u>.

5.1 <u>Employment or Other Service</u>. Nothing in this Agreement will interfere with or limit in any way the right of the Company or any Subsidiary to terminate the employment or service of the Participant at any time, nor confer upon the Participant any right to continue employment or service with the Company or any Subsidiary.

5.2 <u>Rights as a Shareholder</u>. The Participant will have no rights as, or privileges of, a shareholder of the Company, including, without limitation, voting rights and rights to dividends, with respect to Shares of Common Stock issuable upon exercise of the Option unless and until the Participant exercises the Option and becomes the holder of record of such Shares of Common Stock (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment shall be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 4.4 of the Plan.

5.3 <u>Restrictions on Transfer</u>. Except pursuant to testamentary will or the laws of descent and distribution or as otherwise expressly permitted by the Plan, no right or interest of the Participant in the Option prior to exercise of the Option will be assignable or transferable, or subjected to any lien, during the lifetime of the Participant, either voluntarily or involuntarily, directly or indirectly, by operation of law or otherwise. Any attempt to transfer, assign or encumber the Option other than in accordance with this Agreement and the Plan will be null and void and the Option will be forfeited and immediately returned to the Company.

6. <u>Withholding Taxes</u>. The Company is entitled to (a) withhold and deduct from future wages of the Participant (or from other amounts that may be due and owing to the Participant from the Company or a Subsidiary), or make other arrangements for the collection of, all amounts the Company reasonably determines are necessary to satisfy any and all federal, foreign, state and local withholding and employment related tax requirements attributable to the Option, including the grant, vesting or exercise of, the Option, or (b) require the Participant promptly to remit the amount of such withholding to the Company before taking any action, including issuing any Shares upon exercise of the Option. The Committee may, in its sole discretion and upon terms and conditions established by the Committee, permit or require the Participant to satisfy, in whole or in part, any withholding or employment related tax obligation in connection with the Option by withholding Shares issuable upon exercise of the Option. When withholding Shares for taxes is effected under this Agreement and the Plan, it will be withheld only up to an amount based on the maximum statutory tax rates in the Participant's applicable tax jurisdiction or such other rate that will not trigger a negative accounting impact on the Company.

7. <u>Miscellaneous</u>.

7.1 <u>Governing Law</u>. The validity, construction, interpretation, administration and effect of this Agreement and any rules, regulations and actions relating to this Agreement will be governed by and construed exclusively in accordance with the laws of the State of Georgia, notwithstanding the conflicts of laws principles of any jurisdictions.

7.2 <u>Interpretation</u>. Any dispute regarding the interpretation of this Agreement will be submitted by the Participant or by the Company forthwith to the Committee for review. The resolution of such a dispute by the Committee will be final and binding on all parties.

7.3 <u>Successors and Assigns</u>. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement will inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Agreement will be binding upon the Participant and his or her heirs, executors, administrators, successors and assigns.

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7.4 <u>Notices</u>. All notices, requests or other communications provided for in this Agreement must be made, if to the Company, to QumulusAI, Inc., Attn: Chief Financial Officer, 1130 Powers Ferry Pl SE, Marietta, Georgia 30067, and if to the Participant, to the last known mailing address of the Participant contained in the records of the Company. All notices, requests or other communications provided for in this Agreement must be made in writing either (a) by personal delivery, (b) by facsimile or electronic mail with confirmation of receipt, (c) by mailing in the United States mails or (d) by express courier service. The notice, request or other communication will be deemed to be received upon personal delivery, upon confirmation of receipt of facsimile or electronic mail transmission or upon receipt by the party entitled thereto if by United States mail or express courier service; <u>provided</u>, <u>however</u>, that if a notice, request or other communication sent to the Company is not received during regular business hours, it will be deemed to be received on the next succeeding business day of the Company.

7.5 <u>Electronic Delivery and Acceptance</u>. The Company may, in its sole discretion, deliver any documents related to the Option by electronic means or request the Participant's consent to participate in the Plan by electronic means. The Participant hereby consents to receive all applicable documentation by electronic delivery and to participate in the Plan through an on-line system established and maintained by the Company or a third party vendor designated by the Company.

7.6 <u>Other Laws</u>. The Company will have the right to refuse to issue to the Participant Shares upon exercise of the Option if the Company acting in its absolute discretion determines that the issuance or transfer of such Shares might violate any Applicable Law.

7.7 <u>Investment Representation</u>. The Participant hereby represents and covenants that (a) any Share acquired upon exercise of the Option will be acquired for investment and not with a view to the distribution thereof within the meaning of the Securities Act of 1933, as amended (the "<u>Securities Act</u>"), unless such acquisition has been registered under the Securities Act and any applicable state securities laws; (b) any subsequent sale of any such Shares will be made either pursuant to an effective registration statement under the Securities Act and any applicable state securities laws, or pursuant to an exemption from registration under the Securities Act and such state securities laws; and (c) if requested by the Company, the Participant will submit a written statement, in form satisfactory to the Company, to the effect that such representation (x) is true and correct as of the date of vesting of any Shares hereunder or (y) is true and correct as of the date of any sale of any such Share, as applicable. As a further condition precedent to the delivery to the Participant of any Shares upon exercise of the Option, the Participant will comply with all regulations and requirements of any regulatory authority having control of or supervision over the issuance or delivery of the Shares and, in connection therewith, will execute any documents which the Company will in its sole discretion deem necessary or advisable.

7.8 <u>Non-Negotiable Terms</u>. The terms of this Agreement and the Option are not negotiable, but the Participant may refuse to accept the Option by notifying the Company's Chief Financial Officer in writing within thirty (30) day after the Grant Date set forth in the Grant Notice.

7.9 <u>Acknowledgement by the Participant</u>. In accepting the Option, the Participant hereby acknowledges that:

(a) The Plan is established voluntarily by the Company, it is discretionary in nature, and it may be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan.

------

(b) The grant of the Option is voluntary and occasional and does not create any contractual or other right to receive future Option grants, or benefits in lieu of Options, even if Options have been granted repeatedly in the past.

(c) All decisions with respect to future Option grants, if any, will be at the sole discretion of the Company.

(d) The Participant is voluntarily participating in the Plan.

(e) The award of Options is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company, and which is outside the scope of the Participant's employment contract, if any.

(f) The award of Options is not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company or any Subsidiary.

(g) The award of Options or this Agreement will not be interpreted to form an employment contract with the Company or any Subsidiary.

(h) The future value of the Shares issuable upon exercise of the Option is unknown and cannot be predicted with certainty and if the Option vest and is exercised by the Participant, the value of those Shares may increase or decrease.

(i) In consideration of the grant of the Option, no claim or entitlement to compensation or damages shall arise from termination of the Option or diminution in value of the Shares acquired upon exercise of the Option resulting from termination of employment by the Company (for any reason whatsoever and whether or not in breach of applicable labor laws) and the Participant hereby irrevocably releases the Company and its Subsidiaries from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by acceptance of the Option, the Participant shall be deemed irrevocably to have waived his or her entitlement to pursue such claim.

(j) In the event of termination of the Participant's employment with the Company (whether or not in breach of local labor laws), the Participant's right to receive the Option and vest in the Option under the Plan, if any, will terminate effective as of the date of termination of his or her active employment as determined in the sole discretion of the Committee and will not be extended by any notice of termination of employment or severance period provided to the Participant by contract or practice of the Company or any Subsidiary or mandated under local law and the Committee will have the sole discretion to determine the date of termination of the Participant's active employment for purposes of the Option.

(k) Neither the Company nor any Subsidiary is providing any tax, legal or financial advice, nor is the Company or any Subsidiary making any recommendations regarding the Participant's participation in the Plan, acceptance of the Option, acquisition of Shares upon vesting and exercise of the Option or any sale of such Shares.

(l) The Participant has been advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.

\* \* \* \* \*

## Exhibit 10.62

**Exhibit 10.62**

**[PORTIONS HEREIN IDENTIFIED BY [\*\*\*] HAVE BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE THE EXCLUDED INFORMATION IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.]**

**EXECUTION VERSION**

**SECURITIES PURCHASE AGREEMENT**

This **SECURITIES PURCHASE AGREEMENT** (the "**Agreement**"), dated as of March 26, 2026, is by and among QumulusAI, Inc., a Georgia corporation with offices located at 2146 Roswell Road, Suite 108-851, Marietta, GA 30062 (the "**Company**"), and each of the investors listed on the Schedule of Buyers attached hereto (individually, a "**Buyer**" and collectively, the "**Buyers**").

**<u>RECITALS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. The Company and each Buyer is executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the "**1933 Act**"), and Rule 506(b) of Regulation D ("**Regulation D**") as promulgated by the United States Securities and Exchange Commission (the "**SEC**") under the 1933 Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. The Company has authorized a new series of senior secured convertible notes of the Company, in the aggregate original principal amount of up to $45,000,000, substantially in the form attached hereto as **<u>Exhibit A</u>** (the "**Notes**"), which Notes shall be convertible into shares of Common Stock (as defined below)(such shares of Common Stock issuable pursuant to the terms of the Notes, including, without limitation, upon conversion or otherwise, collectively, the "**Conversion Shares**"), in accordance with the terms of the Notes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Each Buyer wishes to purchase, and the Company wishes to sell at the Initial Closing (as defined below), upon the terms and conditions stated in this Agreement, a Note in the aggregate original principal amount set forth opposite such Buyer's name in column (3) on the Schedule of Buyers (which aggregate original principal amount for all Buyers shall not exceed $15,000,000) (each an "**Initial Note**", and collectively, the "**Initial Notes**")(the shares of Common Stock issuable pursuant to the terms of the Initial Notes, including, without limitation, upon conversion or otherwise, collectively, the "**Initial Conversion Shares**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Subject to the terms and conditions set forth in this Agreement, the Company may require each Buyer (or one or more Buyers, severally, may require the Company, as applicable) to participate in one or more Additional Closings (as defined below) for the purchase by such Buyer, and the sale by the Company, of one or more Notes with an aggregate original principal amount for all Additional Closings not to exceed the maximum aggregate original principal amount set forth opposite such Buyer's name in column (4) on the Schedule of Buyers (which aggregate original principal amount for all Buyers for all Additional Closings shall not exceed $30,000,000 (or such other amount as the Company and each Buyer shall mutually agree in writing)) (each Note issued at an Additional Closing, an "**Additional Note**", and collectively, the "**Additional Notes**")(the shares of Common Stock issuable pursuant to the terms of the Additional Notes, including, without limitation, upon conversion or otherwise, collectively, the "**Additional Conversion Shares**").

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. At the Initial Closing, the parties hereto shall execute and deliver a Registration Rights Agreement, in the form attached hereto as **<u>Exhibit B</u>** (the "**Registration Rights Agreement**"), pursuant to which the Company has agreed to provide certain registration rights with respect to the Registrable Securities (as defined in the Registration Rights Agreement), under the 1933 Act and the rules and regulations promulgated thereunder, and applicable state securities laws.

F. The Notes will rank senior to all outstanding and future indebtedness of the Company, and its Subsidiaries (as defined below) other than Permitted Indebtedness (as defined in the Notes) secured by Permitted Liens (as defined in the Notes) and will be secured by a first priority perfected security interest in all of the existing and future assets of the Company and its direct and indirect Subsidiaries, including a pledge of all of the capital stock of each of the Subsidiaries, as evidenced by (a) a security agreement, in the form attached hereto as **<u>Exhibit C</u>** (as amended, restated, supplemented and modified from time to time, the "**Security Agreement**"), and (b) an account control agreement with respect to the Lockbox Account (as defined below), in form and substance acceptable to each Buyer, duly executed by the Company and the depositary bank with respect thereto (the "**Controlled Account Bank**") in which such account is maintained (the "**Controlled Account Agreement**", and together with the Security Agreement, the Perfection Certificate(s) (as defined below) and the other security documents and agreements entered into in connection with this Agreement and each of such other documents and agreements, collectively, the "**Security Documents**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G. The Notes and the Conversion Shares are collectively referred to herein as the "**Securities**."

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

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and each Buyer hereby agree as follows:

**1. PURCHASE AND SALE OF NOTES.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Purchase of Notes.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Initial Closing</u>. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6(a) and 7(a) below, the Company shall issue and sell to each Buyer, and each Buyer severally, but not jointly, agrees to purchase from the Company on the Initial Closing Date (as defined below), an Initial Note in the aggregate original principal amount set forth opposite such Buyer's name in column (3) on the Schedule of Buyers (the "**Initial Closing**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Additional Closings</u>. Subject to the satisfaction (or waiver) of the conditions set forth in Section 1(b)(ii) and Sections 6(b) and 7(b) below, if a Buyer has delivered an Additional Closing Notice (as defined below) to the Company, the Company shall issue and sell to such Buyer, and such Buyer severally, but not jointly, with any other Buyer, shall purchase from the Company, on the applicable Additional Closing Date (as defined below), an Additional Note in the aggregate original principal amount as is set forth in such Additional Closing Notice, not in excess, in the aggregate with all prior Additional Closings, of such aggregate original principal amount of Additional Notes as set forth opposite such Buyer's name in column (4) on the Schedule of Buyers (each, an "**Additional Closing**").

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Closing</u>. The Initial Closing and each Additional Closing are each referred to in this Agreement as a "**Closing**". Each Closing of the purchase of the Notes by the Buyers shall occur at the offices of Kelley Drye & Warren LLP, 3 World Trade Center, 175 Greenwich Street, New York, NY 10007.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Initial Closing</u>. The date and time of the Initial Closing (the "**Initial Closing Date**") shall be 10:00 a.m., New York time, on the first (1st) Business Day (as defined below) on which the conditions to the Initial Closing set forth in Sections 6(a) and 7(a) below are satisfied or waived (or such other date as is mutually agreed to by the Company and each Buyer). As used herein "**Business Day**" means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed; <u>provided</u>, <u>however</u>, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to "stay at home", "shelter-in-place", "non-essential employee" or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally are open for use by customers on such day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Additional Closings</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) <u>Additional Closings at Buyers Election</u>. Subject to the satisfaction (or waiver) of the conditions set forth in this Section 1(b)(ii) and Sections 6(b) and 7(b) below (the "**Additional Closing Conditions**"), each Buyer, severally, shall have the right, exercisable by e-mail delivery of a written notice to the Company (each, an "**Additional Optional Closing Notice**", and the date thereof, each an "**Additional Optional Closing Notice Date**") to purchase, and to require the Company to sell to such Buyer, at one or more Additional Closings, up to such maximum aggregate principal amount of Additional Notes equal to the amount as set forth opposite such Buyer's name in column (4) on the Schedule of Buyers (subject to reduction, on a dollar-for-dollar basis for the aggregate principal amount of any Additional Notes issued in any Additional Closing prior to such applicable Additional Closing Date)(each, an "**Additional Optional Closing Maximum Amount**"). Each Additional Optional Closing Notice shall specify (x) the proposed date and time of the applicable Additional Closing (which, if unspecified in such Additional Optional Closing Notice, shall be the fifth (5th) Trading Day (as defined in the Notes) after such Additional Optional Closing Notice or such other date as is mutually agreed to by the Company and each Buyer, each, an "**Additional Optional Closing Date**") and (y) the aggregate principal amount of Additional Notes to be purchased by each Buyer at such applicable Additional Closing, which shall not exceed the Additional Optional Closing Maximum Amount of such applicable Buyer (or such other amount as the Company and such Buyer shall mutually agree). The Buyers' rights to effect any Additional Closings hereunder shall terminate on the later of (x) the second (2<sup>nd</sup>) anniversary of the Public Listing Date (as defined in the Notes) and (y) the six (6) month anniversary of the first date on which the Company files a Quarterly Report on Form 10-Q or an Annual Report on Form 10-K, as applicable, reporting at least $16 million in revenue for the most applicable quarterly period covered in such report (the "**Additional Closing Expiration Date**").

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) <u>Additional Closings at the Company'</u><u>s Election</u>. Subject to the satisfaction (or waiver) of the conditions to closing set forth in this Section 1(b)(ii)(B) and the Additional Closing Conditions, so long as (1) no Equity Conditions Failure (as defined in the Notes) then exists, and (2) no more than $5 million in aggregate principal of Notes then remain outstanding, the Company shall have the right to require each Buyer to purchase at such applicable Additional Closing up to such maximum aggregate principal amount of Additional Notes equal to the amount as set forth opposite such Buyer's name in column (4) on the Schedule of Buyers (subject to reduction, on a dollar-for-dollar basis for the aggregate principal amount of any Additional Notes issued in any Additional Closing prior to such applicable Additional Closing Date)(each, an "**Additional Mandatory Closing Maximum Amount**"), but in any event not more than $4,000,000, by delivering a written notice by e-mail and overnight courier to each Buyer (each, an "**Additional Mandatory Closing Notice**", and together with the Additional Optional Closing Notice, each an "**Additional Closing Notice**", and the date of an applicable Additional Mandatory Closing Notice, each an "**Additional Mandatory Closing Notice Date**", and together with each Additional Optional Closing Date, an "**Additional Closing Notice Date**") at one or more Additional Closings (such Closing, each, an "**Additional Mandatory Closing**", and the date of any such Additional Mandatory Closing, each, an "**Additional Mandatory Closing Date**", and together with each Additional Optional Closing Date, each, an "**Additional Closing Date**", and together with the Initial Closing Date, each, a "**Closing Date**"). Notwithstanding the foregoing, any Trading Day period above shall be extended by the number of Trading Days during such period and any extension thereof contemplated by this provision on which any Buyer is restricted from trading due to such Buyer's possession of material non-public information of the Company and/or any of its Subsidiaries. Each Additional Mandatory Closing Notice shall be irrevocable. Each Additional Mandatory Closing Notice shall (x) certify that no Event of Default (as defined in the Notes) then exists and, other than with respect to deliverables to be delivered to each Buyer at such Additional Mandatory Closing, all the conditions to closing set forth in this Section 1(b)(ii)(B) and the Additional Closing Conditions have been satisfied in full as of such applicable Additional Mandatory Closing Notice Date, (y) specify the proposed Additional Mandatory Closing Date (which shall be no less than one (1) Business Days nor more than twenty (20) Business Days after such Additional Mandatory Closing Notice Date, subject to the right of each Buyer, by written notice to the Company, to accelerate such applicable Additional Closing Date to an earlier date, not less than one (1) Trading Days after such applicable Additional Mandatory Closing Notice Date (or such other date as such Buyer and the Company shall mutually agree)), and (z) specify the aggregate principal amount of Additional Notes to be purchased by each Buyer at such applicable Additional Mandatory Closing, which shall not exceed the Additional Mandatory Closing Maximum Amount of such applicable Buyer (or such other amount as the Company and such Buyer shall mutually agree). For the avoidance of doubt, the Company shall not be entitled to effect an Additional Mandatory Closing if on such applicable Additional Mandatory Closing Date there is an Event of Default or if the Company fails to satisfy any of the other conditions to closing herein (unless waived in writing by the applicable Buyer participating in such Additional Mandatory Closing). The Company's rights to effect any Additional Closings hereunder shall terminate upon the Additional Closing Expiration Date.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Purchase Price</u>. The aggregate purchase price for the Initial Notes to be purchased by each Buyer (the "**Initial Purchase Price**") shall be the amount set forth opposite such Buyer's name in column (5) on the Schedule of Buyers. The aggregate purchase price for the Additional Notes to be purchased by each Buyer at any given Additional Closing (each, an "**Additional Purchase Price**", and together with the Initial Purchase Price, each, a "**Purchase Price**"), which together with the Additional Purchase Price of each prior Additional Closing, shall not exceed the aggregate amount set forth opposite such Buyer's name in column (6) of the Schedule of Buyers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Form of Payment</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Initial Closing</u>. On the Initial Closing Date, (i) each Buyer shall pay its respective Initial Purchase Price (less, in the case of any Buyer, the amounts withheld pursuant to Section 4(g)) to the Company for the Initial Notes to be issued and sold to such Buyer at the Initial Closing, by wire transfer of immediately available funds in accordance with the Initial Flow of Funds Letter (as defined below) and (ii) the Company shall deliver to each Buyer an Initial Note in the aggregate original principal amount as is set forth opposite such Buyer's name in column (3) of the Schedule of Buyers, duly executed on behalf of the Company and registered in the name of such Buyer or its designee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Additional Closings</u>. On each Additional Closing Date, (i) each Buyer shall pay its respective applicable Additional Purchase Price for such Additional Closing (less, in the case of any Buyer, the amounts withheld pursuant to Section 4(g)) to the Company for the Additional Notes to be issued and sold to such Buyer at each Additional Closing, by wire transfer of immediately available funds in accordance with the applicable Additional Flow of Funds Letter (as defined below) and (ii) the Company shall deliver to each Buyer an Additional Note in the aggregate original principal amount as is set forth in the applicable Additional Closing Notice to be issued to such Buyer, duly executed on behalf of the Company and registered in the name of such Buyer or its designee.

**2. BUYER**'**S REPRESENTATIONS AND WARRANTIES.**

Each Buyer, severally and not jointly, represents and warrants to the Company with respect to only itself that, as of the date hereof and as of each Closing Date:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Organization; Authority</u>. Such Buyer is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents (as defined below) to which it is a party and otherwise to carry out its obligations hereunder and thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>No Public Sale or Distribution</u>. Such Buyer (i) is acquiring its Notes and (ii) upon conversion of its Notes will acquire the Conversion Shares issuable upon conversion thereof, in each case, for its own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof in violation of applicable securities laws, except pursuant to sales registered or exempted under the 1933 Act; provided, however, by making the representations herein, such Buyer does not agree, or make any representation or warranty, to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption from registration under the 1933 Act. Such Buyer does not presently have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Securities in violation of applicable securities laws. For purposes of this Agreement, "**Person**" means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and any Governmental Entity (as defined below) or any department or agency thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Accredited Investor Status</u>. Such Buyer is an "accredited investor" as that term is defined in Rule 501(a) of Regulation D.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Reliance on Exemptions</u>. Such Buyer understands that the Securities are being offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and such Buyer's compliance with, the representations, warranties, agreements, acknowledgments and understandings of such Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of such Buyer to acquire the Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Information</u>. Such Buyer and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities that have been requested by such Buyer. Such Buyer and its advisors, if any, have been afforded the opportunity to ask questions of the Company. Neither such inquiries nor any other due diligence investigations conducted by such Buyer or its advisors, if any, or its representatives shall modify, amend or affect such Buyer's right to rely on the Company's representations and warranties contained herein. Such Buyer understands that its investment in the Securities involves a high degree of risk. Such Buyer has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the Securities.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>No Governmental Review</u>. Such Buyer understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Transfer or Resale</u>. Such Buyer understands that except as provided in the Registration Rights Agreement and in Section 4(h) hereof: (i) the Securities have not been and are not being registered under the 1933 Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) such Buyer shall have delivered to the Company (if requested by the Company) an opinion of counsel, in a form reasonably acceptable to the Company, to the effect that such Securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration, or (C) such Buyer provides the Company with reasonable assurance that such Securities can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act (or a successor rule thereto) (collectively, "**Rule 144**"); (ii) any sale of the Securities made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144, and further, if Rule 144 is not applicable, any resale of the Securities under circumstances in which the seller (or the Person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC promulgated thereunder; and (iii) neither the Company nor any other Person is under any obligation to register the Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder. Notwithstanding the foregoing, the Securities may be pledged in connection with a bona fide margin account or other loan or financing arrangement secured by the Securities and such pledge of Securities shall not be deemed to be a transfer, sale or assignment of the Securities hereunder, and no Buyer effecting a pledge of Securities shall be required to provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant to this Agreement or any other Transaction Document (as defined in Section 3(b)), including, without limitation, this Section 2(g).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Validity; Enforcement</u>. This Agreement and the Registration Rights Agreement have been duly and validly authorized, executed and delivered on behalf of such Buyer and shall constitute the legal, valid and binding obligations of such Buyer enforceable against such Buyer in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>No Conflicts</u>. The execution, delivery and performance by such Buyer of this Agreement and the Registration Rights Agreement and the consummation by such Buyer of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of such Buyer, or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Buyer is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to such Buyer, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which could not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Buyer to perform its obligations hereunder.

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**3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.**

The Company represents and warrants to each of the Buyers that, as of the date hereof and as of each Closing Date:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Organization and Qualification</u>. Each of the Company and each of its Subsidiaries are entities duly organized and validly existing and in good standing under the laws of the jurisdiction in which they are formed, and have the requisite power and authority to own their properties and to carry on their business as now being conducted and as presently proposed to be conducted. Each of the Company and each of its Subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not reasonably be expected to have a Material Adverse Effect (as defined below). As used in this Agreement, "**Material Adverse Effect**" means any material adverse effect on (i) the business, properties, assets, liabilities, operations (including results thereof), condition (financial or otherwise) or prospects of the Company or any Subsidiary, individually or taken as a whole, (ii) the transactions contemplated hereby or in any of the other Transaction Documents or any other agreements or instruments to be entered into in connection herewith or therewith or (iii) the authority or ability of the Company or any of its Subsidiaries to perform any of their respective obligations under any of the Transaction Documents (as defined below). Other than the Persons (as defined below) set forth on <u>Schedule</u><u> </u><u>3(a)</u>, the Company has no Subsidiaries. "**Subsidiaries**" means any Person in which the Company, directly or indirectly, (I) owns any of the outstanding capital stock or holds any equity or similar interest of such Person or (II) controls or operates all or any part of the business, operations or administration of such Person, and each of the foregoing, is individually referred to herein as a "**Subsidiary**."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Authorization; Enforcement; Validity</u>. The Company has the requisite power and authority to enter into and perform its obligations under this Agreement and the other Transaction Documents and to issue the Securities in accordance with the terms hereof and thereof. Each Subsidiary has the requisite power and authority to enter into and perform its obligations under the Transaction Documents to which it is a party. The execution and delivery of this Agreement and the other Transaction Documents by the Company and its Subsidiaries, and the consummation by the Company and its Subsidiaries of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Notes and the reservation for issuance and issuance of the Conversion Shares issuable upon conversion of the Notes) have been duly authorized by the Company's board of directors and each of its Subsidiaries' board of directors or other governing body, as applicable, and (other than the filing with the SEC of one or more Registration Statements (as defined in the Registration Rights Agreement) in accordance with the requirements of the Registration Rights Agreement, a Form D with the SEC and any filing(s) required by applicable state "blue sky" securities laws, rules and regulations (together the "**Securities Filings**")) no further filing, consent or authorization is required by the Company, its Subsidiaries, their respective boards of directors or their shareholders or other governing body. This Agreement has been, and the other Transaction Documents to which it is a party will be prior to the Initial Closing, duly executed and delivered by the Company, and each constitutes the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with its respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies and except as rights to indemnification and to contribution may be limited by federal or state securities law. Prior to the Initial Closing, the Transaction Documents to which each Subsidiary is a party will be duly executed and delivered by each such Subsidiary, and shall constitute the legal, valid and binding obligations of each such Subsidiary, enforceable against each such Subsidiary in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies and except as rights to indemnification and to contribution may be limited by federal or state securities law. "**Transaction Documents**" means, collectively, this Agreement, the Notes, the Leak-Out Agreements (as defined below), the Lock-Up Agreements (as defined below), the Administrative Fee Letter (as defined below), the Registration Rights Agreement, the Security Documents, the Irrevocable Transfer Agent Instructions (as defined below) and each of the other agreements and instruments entered into or delivered by any of the parties hereto in connection with the transactions contemplated hereby and thereby, as may be amended from time to time.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Issuance of Securities</u>. The issuance of the Notes are duly authorized and upon issuance in accordance with the terms of the Transaction Documents shall be validly issued, fully paid and non-assessable and free from all preemptive or similar rights, mortgages, defects, claims, liens, pledges, charges, taxes, rights of first refusal, encumbrances, security interests and other encumbrances (collectively "**Liens**") with respect to the issuance thereof. As of the Closing, the Company shall have reserved from its duly authorized capital stock not less than 200% of the maximum number of Conversion Shares issuable upon conversion of the Notes (assuming for purposes hereof that (w) all Additional Notes issuable hereunder shall have been issued at an Additional Closing on the Initial Closing Date, (x) the Notes are convertible at the Alternate Conversion Price (as defined in the Notes) assuming an Alternate Conversion Date (as defined in the Notes) as of the date hereof, (y) interest on the Notes shall accrue through the twenty-four anniversary of the Initial Closing Date and will be converted in shares of Common Stock at a conversion price equal to the Alternate Conversion Price assuming an Alternate Conversion Date as of the date hereof and (z) any such conversion shall not take into account any limitations on the conversion of the Notes set forth in the Notes). Upon issuance or conversion in accordance with the Notes, the Conversion Shares when issued, will be validly issued, fully paid and nonassessable and free from all preemptive or similar rights or Liens with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of Common Stock. Subject to the accuracy of the representations and warranties of the Buyers in this Agreement, the offer and issuance by the Company of the Securities is exempt from registration under the 1933 Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>No Conflicts</u>. The execution, delivery and performance of the Transaction Documents by the Company and its Subsidiaries and the consummation by the Company and its Subsidiaries of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Notes and the Conversion Shares and the reservation for issuance of the Conversion Shares) will not (i) result in a violation of the Articles of Incorporation (as defined below) (including, without limitation, any certificate of designation contained therein), Bylaws (as defined below), certificate of formation, memorandum of association, articles of association, bylaws or other organizational documents of the Company or any of its Subsidiaries, or any capital stock or other securities of the Company or any of its Subsidiaries, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) in any respect under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including, without limitation, foreign, federal and state securities laws and regulations and the rules and regulations of the principal NMS exchange, if any, in which the Common Stock of the Company is then trading (the "**Principal Market**") and including all applicable foreign, federal and state laws, rules and regulations) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Consents</u>. Neither the Company nor any Subsidiary is required to obtain any consent from, authorization or order of, or make any filing or registration with (other than the filing with the SEC of one or more Registration Statements in accordance with the requirements of the Registration Rights Agreement and the Securities Filings), any Governmental Entity (as defined below) or any regulatory or self-regulatory agency or any other Person in order for it to execute, deliver or perform any of its respective obligations under or contemplated by the Transaction Documents, in each case, in accordance with the terms hereof or thereof. All consents, authorizations, orders, filings and registrations which the Company or any Subsidiary is required to obtain pursuant to the preceding sentence have been or will be obtained or effected on or prior to the Closing Date, and neither the Company nor any of its Subsidiaries are aware of any facts or circumstances which might prevent the Company or any of its Subsidiaries from obtaining or effecting any of the registration, application or filings contemplated by the Transaction Documents. "**Governmental Entity**" means any nation, state, county, city, town, village, district, or other political jurisdiction of any nature, federal, state, local, municipal, foreign, or other government, governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal), multi-national organization or body; or body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature or instrumentality of any of the foregoing, including any entity or enterprise owned or controlled by a government or a public international organization or any of the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Acknowledgment Regarding Buyer'</u><u>s Purchase of Securities</u>. The Company acknowledges and agrees that each Buyer is acting solely in the capacity of an arm's length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby and that no Buyer is (i) an officer or director of the Company or any of its Subsidiaries, (ii) an "affiliate" (as defined in Rule 144) of the Company or any of its Subsidiaries or (iii) to its knowledge, a "beneficial owner" of more than 10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the "**1934 Act**")). The Company further acknowledges that no Buyer is acting as a financial advisor or fiduciary of the Company or any of its Subsidiaries (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby, and any advice given by a Buyer or any of its representatives or agents in connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to such Buyer's purchase of the Securities. The Company further represents to each Buyer that the Company's and each Subsidiary's decision to enter into the Transaction Documents to which it is a party has been based solely on the independent evaluation by the Company, each Subsidiary and their respective representatives.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>No General Solicitation; Placement Agent'</u><u>s Fees</u>. Except as set forth on <u>Schedule 3(g)</u>, neither the Company, nor any of its Subsidiaries or affiliates, nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Securities. The Company shall be responsible for the payment of any placement agent's fees, financial advisory fees, or brokers' commissions (other than for Persons engaged by any Buyer or its investment advisor) relating to or arising out of the transactions contemplated hereby, including, without limitation, placement agent fees payable to Chardan Capital Markets, as placement agent (the "**Placement Agent**") in connection with the sale of the Securities. The fees and expenses of the Placement Agent to be paid by the Company or any of its Subsidiaries are as set forth on <u>Schedule 3(g)</u> attached hereto. The Company shall pay, and hold each Buyer harmless against, any liability, loss or expense (including, without limitation, attorney's fees and out-of-pocket expenses) arising in connection with any such claim. The Company acknowledges that it has engaged the Placement Agent in connection with the sale of the Securities. Other than the Placement Agent, neither the Company nor any of its Subsidiaries has engaged any placement agent or other agent in connection with the offer or sale of the Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>No Integrated Offering</u>. None of the Company, its Subsidiaries or any of their affiliates, nor any Person acting on their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would require registration of the issuance of any of the Securities under the 1933 Act, whether through integration with prior offerings or otherwise, or cause this offering of the Securities to require approval of shareholders of the Company for purposes of the 1933 Act or under any applicable shareholder approval provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system on which any of the securities of the Company are listed or designated for quotation. None of the Company, its Subsidiaries, their affiliates nor any Person acting on their behalf will take any action or steps that would require registration of the issuance of any of the Securities under the 1933 Act or cause the offering of any of the Securities to be integrated with other offerings of securities of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Dilutive Effect</u>. The Company understands and acknowledges that the number of Conversion Shares will increase in certain circumstances. The Company further acknowledges that its obligation to issue the Conversion Shares pursuant to the terms of the Notes in accordance with this Agreement and the Notes is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Application of Takeover Protections; Rights Agreement</u>. The Company and its board of directors have taken all necessary action, if any, in order to render inapplicable any control stock acquisition, interested shareholder, business combination, poison pill (including, without limitation, any distribution under a rights agreement), shareholder rights plan or other similar anti-takeover provision under the Articles of Incorporation, Bylaws or other organizational documents or the laws of the jurisdiction of its incorporation or otherwise which is or could become applicable to any Buyer as a result of the transactions contemplated by this Agreement, including, without limitation, the Company's issuance of the Securities and any Buyer's ownership of the Securities. The Company and its board of directors have taken all necessary action, if any, in order to render inapplicable any shareholder rights plan or similar arrangement relating to accumulations of beneficial ownership of shares of Common Stock or a change in control of the Company or any of its Subsidiaries.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>SEC Documents; Financial Statements</u>. Except as set forth in the Registration Statement on Form S-1 of the Company filed with the SEC prior to the date hereof (as amended or supplemented prior to the date hereof) (the "**Direct Listing Registration Statement**"), the Company has no liabilities or obligations, absolute or contingent (individually or in the aggregate), except obligations under contracts made in the ordinary course of business that as of the date of this Agreement would not be required to be reflected in financial statements prepared in accordance with generally accepted accounting principles as applied in the United States, consistently applied for the periods covered thereby ("**GAAP**"). Solely with respect to Additional Closings after the Public Company Date (as defined below), during the period commencing on the Public Company Date through such Additional Closing Date, the Company has timely filed all reports, schedules, forms, proxy statements, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the 1934 Act (all of the foregoing filed prior to the date hereof and all exhibits and appendices included therein and financial statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the "**SEC Documents**"). Solely with respect to any Additional Closing Date hereunder, the Company has delivered or has made available to the Buyers or their respective representatives true, correct and complete copies of each of the SEC Documents not available on the EDGAR system. As of their respective dates, the Direct Listing Registration Statement and, if after the Public Company Date, the SEC Documents (collectively, the "**SEC Filings**") complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Filings, and none of the SEC Filings, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements of the Company included in the SEC Filings complied in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto as in effect as of the time of filing. Such financial statements have been prepared in accordance with GAAP, consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments, which will not be material, either individually or in the aggregate). The reserves, if any, established by the Company or the lack of reserves, if applicable, are reasonable based upon facts and circumstances known by the Company on the date hereof and there are no loss contingencies that are required to be accrued by the Statement of Financial Accounting Standard No. 5 of the Financial Accounting Standards Board which are not provided for by the Company in its financial statements or otherwise. No other information provided by or on behalf of the Company to any of the Buyers which is not included in the SEC Filings (including, without limitation, information referred to in Section 2(e) of this Agreement or in the disclosure schedules to this Agreement) contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein not misleading, in the light of the circumstance under which they are or were made. The Company is not currently contemplating to amend or restate any of the financial statements (including, without limitation, any notes or any letter of the independent accountants of the Company with respect thereto) included in the SEC Filings (the "**Financial Statements**"), nor is the Company currently aware of facts or circumstances which would require the Company to amend or restate any of the Financial Statements, in each case, in order for any of the Financial Statements to be in compliance with GAAP and the rules and regulations of the SEC. The Company has not been informed by its independent accountants that they recommend that the Company amend or restate any of the Financial Statements or that there is any need for the Company to amend or restate any of the Financial Statements.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>Absence of Certain Changes</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) . Since the date of the Company's most recent audited financial statements contained in a Form 10-K or, if prior to the Initial Closing Date, the Direct Listing Registration Statement, there has been no material adverse change and no material adverse development in the business, assets, liabilities, properties, operations (including results thereof), condition (financial or otherwise) or prospects of the Company or any of its Subsidiaries. Since the date of the Company's most recent audited financial statements contained in a Form 10-K or, if prior to the Initial Closing Date, the Direct Listing Registration Statement, neither the Company nor any of its Subsidiaries has (i) declared or paid any dividends, (ii) sold any assets, individually or in the aggregate, outside of the ordinary course of business or (iii) made any capital expenditures, individually or in the aggregate, outside of the ordinary course of business. Neither the Company nor any of its Subsidiaries has taken any steps to seek protection pursuant to any law or statute relating to bankruptcy, insolvency, reorganization, receivership, liquidation or winding up, nor does the Company or any Subsidiary have any knowledge or reason to believe that any of their respective creditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so. The Company and its Subsidiaries, individually and on a consolidated basis, are not as of the date hereof, and after giving effect to the transactions contemplated hereby to occur at such Closing, will not be Insolvent (as defined below). For purposes of this Section 3(l), "**Insolvent**" means, (i) with respect to the Company and its Subsidiaries, on a consolidated basis, (A) the present fair saleable value of the Company's and its Subsidiaries' assets is less than the amount required to pay the Company's and its Subsidiaries' total Indebtedness (as defined below), (B) the Company and its Subsidiaries are unable to pay their debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured or (C) the Company and its Subsidiaries intend to incur or believe that they will incur debts that would be beyond their ability to pay as such debts mature; and (ii) with respect to the Company and each Subsidiary, individually, (A) the present fair saleable value of the Company's or such Subsidiary's (as the case may be) assets is less than the amount required to pay its respective total Indebtedness, (B) the Company or such Subsidiary (as the case may be) is unable to pay its respective debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured or (C) the Company or such Subsidiary (as the case may be) intends to incur or believes that it will incur debts that would be beyond its respective ability to pay as such debts mature. Neither the Company nor any of its Subsidiaries has engaged in any business or in any transaction, and is not about to engage in any business or in any transaction, for which the Company's or such Subsidiary's remaining assets constitute unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) <u>No Undisclosed Events, Liabilities, Developments or Circumstances</u>. No event, liability, development or circumstance has occurred or exists, or is reasonably expected to exist or occur with respect to the Company, any of its Subsidiaries or any of their respective businesses, properties, liabilities, prospects, operations (including results thereof) or condition (financial or otherwise), that (i) would be required to be disclosed by the Company under applicable securities laws on a registration statement on Form S-1 filed with the SEC relating to an issuance and sale by the Company of its Common Stock and which has not been publicly announced, (ii) could have a material adverse effect on any Buyer's investment hereunder or (iii) could have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) <u>Conduct of Business; Regulatory Permits</u>. Neither the Company nor any of its Subsidiaries is in violation of any term of or in default under its Articles of Incorporation, any certificate of designation, preferences or rights of any other outstanding series of preferred stock of the Company or any of its Subsidiaries or Bylaws or their organizational charter, certificate of formation, memorandum of association, articles of association, Articles of Incorporation or certificate of incorporation or bylaws, respectively. Neither the Company nor any of its Subsidiaries is in violation of any judgment, decree or order or any statute, ordinance, rule or regulation applicable to the Company or any of its Subsidiaries, and neither the Company nor any of its Subsidiaries will conduct its business in violation of any of the foregoing, except in all cases for possible violations which could not, individually or in the aggregate, have a Material Adverse Effect. The Company and each of its Subsidiaries possess all certificates, authorizations and permits issued by the appropriate regulatory authorities necessary to conduct their respective businesses, except where the failure to possess such certificates, authorizations or permits would not have, individually or in the aggregate, a Material Adverse Effect, and neither the Company nor any such Subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit. There is no agreement, commitment, judgment, injunction, order or decree binding upon the Company or any of its Subsidiaries or to which the Company or any of its Subsidiaries is a party which has or would reasonably be expected to have the effect of prohibiting or materially impairing any business practice of the Company or any of its Subsidiaries, any acquisition of property by the Company or any of its Subsidiaries or the conduct of business by the Company or any of its Subsidiaries as currently conducted other than such effects, individually or in the aggregate, which have not had and would not reasonably be expected to have a Material Adverse Effect on the Company or any of its Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) <u>Foreign Corrupt Practices</u>. Neither the Company, the Company's subsidiary or any director, officer, agent, employee, nor any other person acting for or on behalf of the foregoing (individually and collectively, a "**Company Affiliate**") have violated the U.S. Foreign Corrupt Practices Act of 1977, as amended (the "**FCPA**") or any other applicable anti-bribery or anti-corruption laws, nor has any Company Affiliate offered, paid, promised to pay, or authorized the payment of any money, or offered, given, promised to give, or authorized the giving of anything of value, to any officer, employee or any other person acting in an official capacity for any Governmental Entity to any political party or official thereof or to any candidate for political office (individually and collectively, a "**Government Official**") or to any person under circumstances where such Company Affiliate knew or was aware of a high probability that all or a portion of such money or thing of value would be offered, given or promised, directly or indirectly, to any Government Official, for the purpose of:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) influencing any act or decision of such Government Official in his/her official capacity, (B) inducing such Government Official to do or omit to do any act in violation of his/her lawful duty, (C) securing any improper advantage, or (D) inducing such Government Official to influence or affect any act or decision of any Governmental Entity; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) assisting the Company or its Subsidiaries in obtaining or retaining business for or with, or directing business to, the Company or its Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) <u>Transactions With Affiliates</u>. No current or former employee, partner, director, officer or shareholder (direct or indirect) of the Company or its Subsidiaries, or any associate, or, to the knowledge of the Company, any affiliate of any thereof, or any relative with a relationship no more remote than first cousin of any of the foregoing, is presently, or has ever been, (i) a party to any transaction with the Company or its Subsidiaries (including any contract, agreement or other arrangement providing for the furnishing of services by, or rental of real or personal property from, or otherwise requiring payments to, any such director, officer or shareholder or such associate or affiliate or relative Subsidiaries (other than for ordinary course services as employees, officers or directors of the Company or any of its Subsidiaries)) or (ii) the direct or indirect owner of an interest in any corporation, firm, association or business organization which is a competitor, supplier or customer of the Company or its Subsidiaries (except for a passive investment (direct or indirect) in less than 5% of the common stock of a company whose securities are traded on or quoted through an Eligible Market (as defined in the Notes)), nor does any such Person receive income from any source other than the Company or its Subsidiaries which relates to the business of the Company or its Subsidiaries or should properly accrue to the Company or its Subsidiaries. No employee, officer, shareholder or director of the Company or any of its Subsidiaries or member of his or her immediate family is indebted to the Company or its Subsidiaries, as the case may be, nor is the Company or any of its Subsidiaries indebted (or committed to make loans or extend or guarantee credit) to any of them, other than (i) for payment of salary for services rendered, (ii) reimbursement for reasonable expenses incurred on behalf of the Company, and (iii) for other standard employee benefits made generally available to all employees or executives (including stock option agreements outstanding under any stock option plan approved by the Board of Directors of the Company).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) <u>Equity Capitalization.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Definitions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) "**Common Stock**" means (x) the Company's shares of common stock, no par value per share, and (y) any capital stock into which such common stock shall have been changed or any capital stock resulting from a reclassification of such common stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) "**Preferred Stock**" means (x) the Company's blank check preferred stock, no par value per share, the terms of which may be designated by the board of directors of the Company in a certificate of designations and (y) any capital stock into which such preferred stock shall have been changed or any capital stock resulting from a reclassification of such preferred stock (other than a conversion of such preferred stock into Common Stock in accordance with the terms of such certificate of designations).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Authorized and Outstanding Capital Stock</u>. As of the date hereof, the authorized capital stock of the Company consists of (A) 500,000,000 shares of Common Stock, of which, 31,367,559 are issued and outstanding and no shares are reserved for issuance pursuant to Common Stock Equivalents (as defined below) (other than the Notes) exercisable or exchangeable for, or convertible into, shares of Common Stock and (B) 25,000,000 shares of Preferred Stock, none of which are issued and outstanding. No shares of Common Stock are held in the treasury of the Company. "**Common Stock Equivalents**" means any capital stock or other security of the Company or any of its Subsidiaries that is at any time and under any circumstances directly or indirectly convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any capital stock or other security of the Company (including, without limitation, Common Stock) or any of its Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>Valid Issuance; Available Shares; Affiliates</u>. All of such outstanding shares are duly authorized and have been, or upon issuance will be, validly issued and are fully paid and nonassessable. <u>Schedule 3(r)(iii)</u> sets forth the number of shares of Common Stock that are (A) reserved for issuance pursuant to Common Stock Equivalents (other than the Notes) and (B) that are, as of the date hereof, owned by Persons who are "affiliates" (as defined in Rule 405 of the 1933 Act and calculated based on the assumption that only officers, directors and holders of at least 10% of the Company's issued and outstanding Common Stock are "affiliates" without conceding that any such Persons are "affiliates" for purposes of federal securities laws) of the Company or any of its Subsidiaries. To the Company's knowledge, no Person owns 10% or more of the Company's issued and outstanding shares of Common Stock (calculated based on the assumption that all Common Stock Equivalents, whether or not presently exercisable or convertible, have been fully exercised or converted (as the case may be) taking account of any limitations on exercise or conversion (including "blockers") contained therein without conceding that such identified Person is a 10% shareholder for purposes of federal securities laws).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>Existing Securities; Obligations</u>. Except as disclosed on <u>Schedule 3(r)(iv)</u>: (A) none of the Company's or any Subsidiary's shares, interests or capital stock is subject to preemptive rights or any other similar rights or Liens suffered or permitted by the Company or any Subsidiary; (B) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares, interests or capital stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares, interests or capital stock of the Company or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares, interests or capital stock of the Company or any of its Subsidiaries; (C) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of their securities under the 1933 Act (except pursuant to the Registration Rights Agreement); (D) there are no outstanding securities or instruments of the Company or any of its Subsidiaries which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries; (E) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities; and (F) neither the Company nor any Subsidiary has any stock appreciation rights or "phantom stock" plans or agreements or any similar plan or agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>Organizational Documents</u>. The Company has furnished to the Buyers true, correct and complete copies of the Company's Articles of Incorporation, as amended and as in effect on the date hereof (the "**Articles of Incorporation**"), and the Company's bylaws, as amended and as in effect on the date hereof (the "**Bylaws**"), and the terms of all Common Stock Equivalents and the material rights of the holders thereof in respect thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) <u>Indebtedness and Other Contracts</u>. Except as disclosed on <u>Schedule</u><u> </u><u>3(s)</u>, (i) neither the Company nor any of its Subsidiaries, has any outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments evidencing Indebtedness of the Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries is or may become bound, (ii) the Company is not a party to any contract, agreement or instrument, the violation of which, or default under which, by the other party(ies) to such contract, agreement or instrument could reasonably be expected to result in a Material Adverse Effect, (iii) the Company does not have any financing statements securing obligations in any amounts filed in connection with the Company; (iv) the Company is not in violation of any term of, or in default under, any contract, agreement or instrument relating to any Indebtedness, except where such violations and defaults would not result, individually or in the aggregate, in a Material Adverse Effect, or (v) the Company is not a party to any contract, agreement or instrument relating to any Indebtedness, the performance of which, in the judgment of the Company's officers, has or is expected to have a Material Adverse Effect. For purposes of this Agreement: (x) "**Indebtedness**" of any Person means, without duplication (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (including, without limitation, "capital leases" in accordance with GAAP) (other than trade payables entered into in the ordinary course of business consistent with past practice), (C) all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (D) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses, (E) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property), (F) all monetary obligations under any leasing or similar arrangement which, in connection with GAAP, consistently applied for the periods covered thereby, is classified as a capital lease, (G) all indebtedness referred to in clauses (A) through (F) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in any property or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property has not assumed or become liable for the payment of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (A) through (G) above; and (y) "**Contingent Obligation**" means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any Indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) <u>Litigation</u>. There is no action, suit, arbitration, proceeding, inquiry or investigation before or by any court, public board, other Governmental Entity, self-regulatory organization or body pending or, to the knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries, the Common Stock or any of the Company's or its Subsidiaries' officers or directors, whether of a civil or criminal nature or otherwise, in their capacities as such, except as set forth in <u>Schedule 3(t)</u>. No director, officer or employee of the Company or any of its subsidiaries has willfully violated 18 U.S.C. §1519 or engaged in spoliation in reasonable anticipation of litigation. After reasonable inquiry of its employees, the Company is not aware of any fact which might result in or form the basis for any such action, suit, arbitration, investigation, inquiry or other proceeding. Neither the Company nor any of its Subsidiaries is subject to any order, writ, judgment, injunction, decree, determination or award of any Governmental Entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) <u>Insurance</u>. The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has been refused any insurance coverage sought or applied for, and neither the Company nor any such Subsidiary has any reason to believe that it will be unable to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>Employee Relations</u>. Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or employs any member of a union. The Company and its Subsidiaries believe that their relations with their employees are good. No executive officer (as defined in Rule 501(f) promulgated under the 1933 Act) or other key employee of the Company or any of its Subsidiaries has notified the Company or any such Subsidiary that such officer intends to leave the Company or any such Subsidiary or otherwise terminate such officer's employment with the Company or any such Subsidiary. No current (or former) executive officer or other key employee of the Company or any of its Subsidiaries is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement, non-competition agreement, or any other contract or agreement or any restrictive covenant, and the continued employment of each such executive officer or other key employee (as the case may be) does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all federal, state, local and foreign laws and regulations respecting labor, employment and employment practices and benefits, terms and conditions of employment and wages and hours, except where failure to be in compliance would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w) <u>Title</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Real Property</u>. Each of the Company and its Subsidiaries holds good title to all real property, leases in real property, facilities or other interests in real property owned or held by the Company or any of its Subsidiaries (the "**Real Property**") owned by the Company or any of its Subsidiaries (as applicable). The Real Property is free and clear of all Liens and is not subject to any rights of way, building use restrictions, exceptions, variances, reservations, or limitations of any nature except for (a) Liens for current taxes not yet due and (b) zoning laws and other land use restrictions that do not impair the present or anticipated use of the property subject thereto. Any Real Property held under lease by the Company or any of its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company or any of its Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Fixtures and Equipment</u>. Each of the Company and its Subsidiaries (as applicable) has good title to, or a valid leasehold interest in, the tangible personal property, equipment, improvements, fixtures, and other personal property and appurtenances that are used by the Company or its Subsidiary in connection with the conduct of its business (the "**Fixtures and Equipment**"). The Fixtures and Equipment are structurally sound, are in good operating condition and repair, are adequate for the uses to which they are being put, are not in need of maintenance or repairs except for ordinary, routine maintenance and repairs and are sufficient for the conduct of the Company's and/or its Subsidiaries' businesses (as applicable) in the manner as conducted prior to such Closing. Each of the Company and its Subsidiaries owns all of its Fixtures and Equipment free and clear of all Liens except for (a) liens for current taxes not yet due and (b) zoning laws and other land use restrictions that do not impair the present or anticipated use of the property subject thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) <u>Intellectual Property Rights</u>. The Company and its Subsidiaries own or possess adequate rights or licenses to use all trademarks, trade names, service marks, service mark registrations, service names, original works of authorship, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and other intellectual property rights and all applications and registrations therefor ("**Intellectual Property Rights**") necessary to conduct their respective businesses as now conducted and presently proposed to be conducted. Each of the patents owned by the Company or any of its Subsidiaries is listed on <u>Schedule 3(x)(i)</u>. Except as set forth in <u>Schedule 3(x)(ii)</u>, none of the Company's Intellectual Property Rights have expired or terminated or have been abandoned or are expected to expire or terminate or are expected to be abandoned, within three years from the date of this Agreement. The Company does not have any knowledge of any infringement by the Company or its Subsidiaries of Intellectual Property Rights of others. There is no claim, action or proceeding being made or brought, or to the knowledge of the Company or any of its Subsidiaries, being threatened, against the Company or any of its Subsidiaries regarding its Intellectual Property Rights. Neither the Company nor any of its Subsidiaries is aware of any facts or circumstances which might give rise to any of the foregoing infringements or claims, actions or proceedings. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their Intellectual Property Rights.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y) <u>Environmental Laws</u>. (i) The Company and its Subsidiaries (A) are in compliance with any and all Environmental Laws (as defined below), (B) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (C) are in compliance with all terms and conditions of any such permit, license or approval where, in each of the foregoing clauses (A), (B) and (C), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. The term "**Environmental Laws**" means all federal, state, local or foreign laws relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, "**Hazardous Materials**") into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>No Hazardous Materials</u>:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) have been disposed of or otherwise released from any Real Property of the Company or any of its Subsidiaries in violation of any Environmental Laws; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) are present on, over, beneath, in or upon any Real Property or any portion thereof in quantities that would constitute a violation of any Environmental Laws. No prior use by the Company or any of its Subsidiaries of any Real Property has occurred that violates any Environmental Laws, which violation would have a material adverse effect on the business of the Company or any of its Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Neither the Company nor any of its Subsidiaries knows of any other person who or entity which has stored, treated, recycled, disposed of or otherwise located on any Real Property any Hazardous Materials, including, without limitation, such substances as asbestos and polychlorinated biphenyls.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) None of the Real Properties are on any federal or state "Superfund" list or Liability Information System ("**CERCLIS**") list or any state environmental agency list of sites under consideration for CERCLIS, nor subject to any environmental related Liens.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(z) <u>Subsidiary Rights</u>. The Company or one of its Subsidiaries has the unrestricted right to vote, and (subject to limitations imposed by applicable law) to receive dividends and distributions on, all capital securities of its Subsidiaries as owned by the Company or such Subsidiary.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aa) <u>Tax Status</u>. The Company and each of its Subsidiaries (i) has timely made or filed all foreign, federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has timely paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and (iii) has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company and its Subsidiaries know of no basis for any such claim. The Company is not operated in such a manner as to qualify as a passive foreign investment company, as defined in Section 1297 of the Internal Revenue Code of 1986, as amended (the "**Code**"). The net operating loss carryforwards ("**NOLs**") for United States federal income tax purposes of the consolidated group of which the Company is the common parent, if any, shall not be adversely effected by the transactions contemplated hereby. The transactions contemplated hereby do not constitute an "ownership change" within the meaning of Section 382 of the Code, thereby preserving the Company's ability to utilize such NOLs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bb) <u>Off Balance Sheet Arrangements</u>. There is no transaction, arrangement, or other relationship between the Company or any of its Subsidiaries and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its 1934 Act filings and is not so disclosed or that otherwise could be reasonably likely to have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(cc) <u>Investment Company Status</u>. The Company is not, and upon consummation of the sale of the Securities will not be, an "investment company," an affiliate of an "investment company," a company controlled by an "investment company" or an "affiliated person" of, or "promoter" or "principal underwriter" for, an "investment company" as such terms are defined in the Investment Company Act of 1940, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(dd) <u>U.S. Real Property Holding Corporation</u>. Neither the Company nor any of its Subsidiaries is, or has ever been, and so long as any of the Securities are held by any of the Buyers, shall become, a U.S. real property holding corporation within the meaning of Section 897 of the Code, and the Company and each Subsidiary shall so certify upon any Buyer's request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ee) <u>Transfer Taxes</u>. On the Closing Date, all <u>stock</u> transfer or other taxes (other than income or similar taxes) which are required to be paid in connection with the issuance, sale and transfer of the Securities to be sold to each Buyer hereunder will be, or will have been, fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ff) <u>Registration Eligibility</u>. The Company is eligible to register the Registrable Securities for resale by the Buyers using Form S-3 promulgated under the 1933 Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(gg) <u>Bank Holding Company Act; Regulation U or X</u>.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Neither the Company nor any of its Subsidiaries is subject to the Bank Holding Company Act of 1956, as amended (the "**BHCA**") and to regulation by the Board of Governors of the Federal Reserve System of the United States (the "**Federal Reserve**"). Neither the Company nor any of its Subsidiaries or affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The sale of the Notes, the use of proceeds thereof and the other transactions contemplated thereby or by the other Transaction Documents, will not violate or be inconsistent with the provisions of Regulation U or X of the Board of Governors of the Federal Reserve.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(hh) <u>Illegal or Unauthorized Payments; Political Contributions</u>. Neither the Company nor any of its Subsidiaries nor, to the best of the Company's knowledge (after reasonable inquiry of its officers and directors), any of the officers, directors, employees, agents or other representatives of the Company or any of its Subsidiaries or any other business entity or enterprise with which the Company or any Subsidiary is or has been affiliated or associated, has, directly or indirectly, made or authorized any payment, contribution or gift of money, property, or services, whether or not in contravention of applicable law, (i) as a kickback or bribe to any Person or (ii) to any political organization, or the holder of or any aspirant to any elective or appointive public office except for personal political contributions not involving the direct or indirect use of funds of the Company or any of its Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Money Laundering</u>. The Company and its Subsidiaries are in compliance with, and have not previously violated, the USA Patriot Act of 2001 and all other applicable U.S. and non-U.S. anti-money laundering laws and regulations, including, without limitation, the laws, regulations and Executive Orders and sanctions programs administered by the U.S. Office of Foreign Assets Control, including, but not limited, to (i) Executive Order 13224 of September 23, 2001 entitled, "Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism" (66 Fed. Reg. 49079 (2001)); and (ii) any regulations contained in 31 CFR, Subtitle B, Chapter V.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(jj) <u>Books and Records</u>. The books of account, ledgers, order books, records and documents of the Company and its Subsidiaries accurately and completely reflect all information relating to the respective businesses of the Company and its Subsidiaries, the nature, acquisition, maintenance, location and collection of each of their respective assets, and the nature of all transactions giving rise to material obligations or accounts receivable of the Company or its Subsidiaries, as the case may be, except where the failure to so reflect such information would not have a Material Adverse Effect. The minute books of the Company and its Subsidiaries contain accurate records of all meetings and accurately reflect all other actions taken by the shareholders, boards of directors and all committees of the boards of directors, and other governing Persons of the Company and its Subsidiaries, respectively.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(kk) <u>Acknowledgement Regarding Buyers'</u> <u>Trading Activity</u>. It is understood and acknowledged by the Company (i) that none of the Buyers have been asked by the Company or its Subsidiaries to agree, nor has any Buyer agreed with the Company or its Subsidiaries, to desist from purchasing or selling, long and/or short, securities of the Company, or "derivative" securities based on securities issued by the Company or to hold the Securities for any specified term; (ii) that each Buyer shall not be deemed to have any affiliation with or control over any arm's length counter party in any "derivative" transaction and (iii) each Buyer may rely on the Company's obligation to timely deliver shares of Common Stock upon conversion, exercise or exchange, as applicable, of the Securities as and when required pursuant to the Transaction Documents for purposes of effecting trading in the Common Stock of the Company. The Company further understands and acknowledges that following the public disclosure of the transactions contemplated by the Transaction Documents pursuant to the Press Releases (as defined below) one or more Buyers may engage in hedging and/or trading activities at various times during the period that the Securities are outstanding, including, without limitation, during the periods that the value and/or number of the Conversion Shares deliverable with respect to the Notes are being determined and such hedging and/or trading activities, if any, can reduce the value of the existing shareholders' equity interest in the Company both at and after the time the hedging and/or trading activities are being conducted. The Company acknowledges that such aforementioned hedging and/or trading activities do not constitute a breach of this Agreement, the Notes or any other Transaction Document or any of the documents executed in connection herewith or therewith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ll) <u>Management</u>. Except as set forth in <u>Schedule</u><u> </u><u>3(ll)</u> hereto, during the past five year period, no current or former officer or director or, to the knowledge of the Company, no current ten percent (10%) or greater shareholder of the Company or any of its Subsidiaries has been the subject of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) a petition under bankruptcy laws or any other insolvency or moratorium law or the appointment by a court of a receiver, fiscal agent or similar officer for such Person, or any partnership in which such person was a general partner at or within two years before the filing of such petition or such appointment, or any corporation or business association of which such person was an executive officer at or within two years before the time of the filing of such petition or such appointment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) a conviction in a criminal proceeding or a named subject of a pending criminal proceeding (excluding traffic violations that do not relate to driving while intoxicated or driving under the influence);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining any such person from, or otherwise limiting, the following activities:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the United States Commodity Futures Trading Commission or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) Engaging in any particular type of business practice; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of securities laws or commodities laws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) any order, judgment or decree, not subsequently reversed, suspended or vacated, of any authority barring, suspending or otherwise limiting for more than sixty (60) days the right of any such person to engage in any activity described in the preceding sub paragraph, or to be associated with persons engaged in any such activity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) a finding by a court of competent jurisdiction in a civil action or by the SEC or other authority to have violated any securities law, regulation or decree and the judgment in such civil action or finding by the SEC or any other authority has not been subsequently reversed, suspended or vacated; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) a finding by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any federal commodities law, and the judgment in such civil action or finding has not been subsequently reversed, suspended or vacated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(mm) <u>Stock Option Plans</u>. Each stock option granted by the Company was granted (i) in accordance with the terms of the applicable stock option plan of the Company and (ii) with an exercise price at least equal to the fair market value of the Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted under the Company's stock option plan has been backdated. The Company has not knowingly granted, and there is no and has been no policy or practice of the Company to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(nn) <u>No Disagreements with Accountants and Lawyers</u>. There are no material disagreements of any kind presently existing, or reasonably anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company's ability to perform any of its obligations under any of the Transaction Documents. In addition, on or prior to the date hereof, the Company had discussions with its accountants about its financial statements. Based on those discussions, the Company has no reason to believe that it will need to restate any such financial statements or any part thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(oo) <u>No Disqualification Events</u>. With respect to Securities to be offered and sold hereunder in reliance on Rule 506(b) under the 1933 Act ("**Regulation D Securities**"), none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company participating in the offering contemplated hereby, any beneficial owner of 20% or more of the Company's outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the 1933 Act) connected with the Company in any capacity at the time of sale (each, an "**Issuer Covered Person**" and, together, "**Issuer Covered Persons**") is subject to any of the "Bad Actor" disqualifications described in Rule 506(d)(1)(i) to (viii) under the 1933 Act (a "**Disqualification Event**"), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Buyers a copy of any disclosures provided thereunder.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(pp) <u>Other Covered Persons</u>. The Company is not aware of any Person (other than the Placement Agent) that has been or will be paid (directly or indirectly) remuneration for solicitation of Buyers or potential purchasers in connection with the sale of any Regulation D Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(qq) <u>No Additional Agreements</u>. The Company does not have any agreement or understanding with any Buyer with respect to the transactions contemplated by the Transaction Documents other than as specified in the Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(rr) <u>Public Utility Holding Act</u>. None of the Company nor any of its Subsidiaries is a "holding company," or an "affiliate" of a "holding company," as such terms are defined in the Public Utility Holding Act of 2005.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ss) <u>Federal Power Act</u>. None of the Company nor any of its Subsidiaries is subject to regulation as a "public utility" under the Federal Power Act, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(tt) <u>Ranking of Notes</u>. Other than as set forth on <u>Schedule 3(ss)</u>, no Indebtedness of the Company, at each Closing, will be senior to, or *pari passu* with, the Notes in right of payment, whether with respect to payment or redemptions, interest, damages, upon liquidation or dissolution or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(uu) <u>Cybersecurity</u>. To the Company's knowledge, the Company and its Subsidiaries' information technology assets and equipment, computers, systems, networks, hardware, software, websites, applications, and databases (collectively, "**IT Systems**") are adequate for, and operate and perform in all material respects as required in connection with the operation of the business of the Company and its subsidiaries as currently conducted, free and clear of all material bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants that would reasonably be expected to have a Material Adverse Effect on the Company's business. To the Company's knowledge, the Company and its Subsidiaries have implemented and maintained commercially reasonable physical, technical and administrative controls, policies, procedures, and safeguards to maintain and protect their material confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and data, including "Personal Data," used in connection with their businesses. "**Personal Data**" means (i) a natural person's name, street address, telephone number, e-mail address, photograph, social security number or tax identification number, driver's license number, passport number, credit card number, bank information, or customer or account number; (ii) any information which would qualify as "personally identifying information" under the Federal Trade Commission Act, as amended; (iii) "personal data" as defined by the European Union General Data Protection Regulation ("**GDPR**") (EU 2016/679); (iv) any information which would qualify as "protected health information" under the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act (collectively, "**HIPAA**"); and (v) any other piece of information that allows the identification of such natural person, or his or her family, or permits the collection or analysis of any data related to an identified person's health or sexual orientation. To the Company's knowledge, there have been no breaches, violations, outages or unauthorized uses of or accesses to same, except for those that have been remedied without material cost or liability or the duty to notify any other person or such, nor any incidents under internal review or investigations relating to the same except in each case, where such would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. To the Company's knowledge, the Company and its Subsidiaries are presently in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems and Personal Data and to the protection of such IT Systems and Personal Data from unauthorized use, access, misappropriation or modification except in each case, where such would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vv) <u>Compliance with Data Privacy Laws</u>. To the Company's knowledge, the Company and its Subsidiaries are, and at all prior times were, in compliance with all applicable state and federal data privacy and security laws and regulations, including without limitation HIPAA, and the Company and its Subsidiaries have taken commercially reasonable actions to prepare to comply with, and since May 25, 2018, have been and currently are in compliance with, the GDPR (EU 2016/679) (collectively, the "**Privacy Laws**") except in each case, where such would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. To ensure compliance with the Privacy Laws, the Company and its Subsidiaries have in place, comply with, and take appropriate steps reasonably designed to ensure compliance in all material respects with their policies and procedures relating to data privacy and security and the collection, storage, use, disclosure, handling, and analysis of Personal Data (the "**Policies**"). The Company and its Subsidiaries have at all times made all disclosures to users or customers required by applicable laws and regulatory rules or requirements, and none of such disclosures made or contained in any Policy have, to the knowledge of the Company, been inaccurate or in violation of any applicable laws and regulatory rules or requirements in any material respect. The Company further certifies that neither it nor any Subsidiary: (i) has received notice of any actual or potential liability under or relating to, or actual or potential violation of, any of the Privacy Laws, and has no knowledge of any event or condition that would reasonably be expected to result in any such notice; (ii) is currently conducting or paying for, in whole or in part, any investigation, remediation, or other corrective action pursuant to any Privacy Law; or (iii) is a party to any order, decree, or agreement that imposes any obligation or liability under any Privacy Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ww) <u>Disclosure</u>. All disclosure provided to the Buyers regarding the Company and its Subsidiaries, their businesses and the transactions contemplated hereby, including the schedules to this Agreement, furnished by or on behalf of the Company or any of its Subsidiaries is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. All of the written information furnished after the date hereof by or on behalf of the Company or any of its Subsidiaries to each Buyer pursuant to or in connection with this Agreement and the other Transaction Documents, taken as a whole, will be true and correct in all material respects as of the date on which such information is so provided and will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. Each press release issued by the Company or any of its Subsidiaries during the twelve (12) months preceding the date of this Agreement did not at the time of release contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. No event or circumstance has occurred or information exists with respect to the Company or any of its Subsidiaries or its or their business, properties, liabilities, prospects, operations (including results thereof) or conditions (financial or otherwise), which, under applicable law, rule or regulation, requires public disclosure at or before the date hereof or announcement by the Company but which has not been so publicly disclosed. All financial projections and forecasts that have been prepared by or on behalf of the Company or any of its Subsidiaries and made available to you have been prepared in good faith based upon reasonable assumptions and represented, at the time each such financial projection or forecast was delivered to each Buyer, the Company's best estimate of future financial performance (it being recognized that such financial projections or forecasts are not to be viewed as facts and that the actual results during the period or periods covered by any such financial projections or forecasts may differ from the projected or forecasted results). The Company acknowledges and agrees that no Buyer makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 2.

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**4. COVENANTS.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Best Efforts</u>. Each Buyer shall use its best efforts to timely satisfy each of the covenants hereunder and conditions to be satisfied by it as provided in Section 6 of this Agreement. The Company shall use its best efforts to timely satisfy each of the covenants hereunder and conditions to be satisfied by it as provided in Section 7 of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Form D and Blue Sky</u>. The Company shall file a Form D with respect to the Securities as required under Regulation D and to provide a copy thereof to each Buyer promptly after such filing. The Company shall, on or before the Closing Date, take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to, qualify the Securities for sale to the Buyers at the Closing pursuant to this Agreement under applicable securities or "Blue Sky" laws of the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken to the Buyers on or prior to the Closing Date. Without limiting any other obligation of the Company under this Agreement, the Company shall timely make all filings and reports relating to the offer and sale of the Securities required under all applicable securities laws (including, without limitation, all applicable federal securities laws and all applicable "Blue Sky" laws), and the Company shall comply with all applicable foreign, federal, state and local laws, statutes, rules, regulations and the like relating to the offering and sale of the Securities to the Buyers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Reporting Status</u>. Immediately following the date the Common Stock of the Company is initially registered (or is exchanged into a class of securities registered) under the 1934 Act (whether by registration, merger or otherwise) (the "**Public Company Date**") and until the date on which the Investors (as defined in the Registration Rights Agreement) shall have sold all of the Registrable Securities (the "**Reporting Period**"), the Company shall timely file all reports required to be filed with the SEC pursuant to the 1934 Act, and the Company shall not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would no longer require or otherwise permit such termination. From the time Form S-3 is available to the Company for the registration of the Registrable Securities, the Company shall take all actions necessary to maintain its eligibility to register the Registrable Securities for resale by the Buyers on Form S-3.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Use of Proceeds</u>. The Company will use the proceeds from the sale of the Securities for general corporate purposes, but not, directly or indirectly, for (i) except as set forth on <u>Schedule 4(d)</u>, the satisfaction of any indebtedness of the Company or any of its Subsidiaries, (ii) the redemption or repurchase of any securities of the Company or any of its Subsidiaries, or (iii) the settlement of any outstanding litigation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Financial Information</u>. From and after the Public Company Date, the Company agrees to send the following to each Investor during the Reporting Period (i) unless the following are filed with the SEC through EDGAR and are available to the public through the EDGAR system, within one (1) Business Day after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, any interim reports or any consolidated balance sheets, income statements, shareholders' equity statements and/or cash flow statements for any period other than annual, any Current Reports on Form 8-K and any registration statements (other than on Form S-8) or amendments filed pursuant to the 1933 Act, (ii) unless the following are either filed with the SEC through EDGAR or are otherwise widely disseminated via a recognized news release service (such as PR Newswire), on the same day as the release thereof, e-mail copies of all press releases issued by the Company or any of its Subsidiaries and (iii) unless the following are filed with the SEC through EDGAR, copies of any notices and other information made available or given to the shareholders of the Company generally, contemporaneously with the making available or giving thereof to the shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Listing</u>. Immediately following the Public Company Date, the Company shall promptly secure the listing or designation for quotation (as the case may be) of all of the Registrable Securities upon each national securities exchange and automated quotation system, if any, upon which the Common Stock is then listed or designated for quotation (as the case may be) (subject to official notice of issuance) and shall maintain such listing or designation for quotation (as the case may be) of all Registrable Securities from time to time issuable under the terms of the Transaction Documents on such national securities exchange or automated quotation system; provided, that if the Public Company Date occurred by virtue of an underwritten public offering, the Company shall be required to secure the listing of the Common Stock and the Conversion Shares on either The New York Stock Exchange, the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market or the Nasdaq Global Select Market (each, an "**Eligible Market**"). From and after such listing of the Common Stock on an Eligible Market, neither the Company nor any of its Subsidiaries shall take any action which could be reasonably expected to result in the delisting or suspension of the Common Stock on an Eligible Market. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 4(f).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Fees</u>. The Company shall reimburse the lead Buyer (A) at the Initial Closing, (i) a non-accountable amount of $115,000 for the fees and expenses of Kelley Drye & Warren LLP, securities counsel to the lead Buyer, (ii) a non-accountable amount of $25,000 for the fees and expenses of Blank Rome LLP, special collateral counsel to the lead Buyer, and (iii) $10,000 for due diligence expenses of the lead Buyer, (B) at each Additional Closing, (i) a non-accountable amount of $35,000, in each case, for legal fees of outside counsel and disbursements of Kelley Drye & Warren LLP, securities counsel to the lead Buyer, and (ii) a non-accountable amount of $10,000, in each case, for legal fees of outside counsel and disbursements of Blank Rome LLP, special collateral counsel to the lead Buyer, and (C) all other reasonable and documented costs and expenses incurred by it or its affiliates in connection with the structuring, documentation, diligence, negotiation, applicable closing and post-closing, as applicable, of the transactions contemplated by the Transaction Documents (including, without limitation, as applicable, any other reasonable and documented fees and expenses in connection with the structuring, documentation, negotiation and closing of the transactions contemplated by the Transaction Documents and due diligence and regulatory filings in connection therewith) (collectively, the "**Transaction Expenses**") and shall be withheld by the lead Buyer from its Purchase Price at the applicable Closing, and with respect to the Initial Closing, less $150,000 previously paid by the Company to the lead Buyer; provided, that the Company shall promptly reimburse Kelley Drye & Warren LLP and Blank Rome LLP on demand for all Transaction Expenses not so reimbursed through such withholding at a Closing. The Company shall be responsible for the payment of any placement agent's fees, financial advisory fees, Controlled Account Bank fees, transfer agent fees, DTC (as defined below) fees or broker's commissions (other than for Persons engaged by any Buyer) relating to or arising out of the transactions contemplated hereby (including, without limitation, any fees or commissions payable to the Placement Agent, who is the Company's sole placement agent in connection with the transactions contemplated by this Agreement). The Company shall pay, and hold each Buyer harmless against, any liability, loss or expense (including, without limitation, reasonable attorneys' fees and out-of-pocket expenses) arising in connection with any claim relating to any such payment. Except as otherwise set forth in the Transaction Documents, each party to this Agreement shall bear its own expenses in connection with the sale of the Securities to the Buyers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Pledge of Securities</u>. Notwithstanding anything to the contrary contained in this Agreement, the Company acknowledges and agrees that the Securities may be pledged by an Investor in connection with a bona fide margin agreement or other loan or financing arrangement that is secured by the Securities. The pledge of Securities shall not be deemed to be a transfer, sale or assignment of the Securities hereunder, and no Investor effecting a pledge of Securities shall be required to provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant to this Agreement or any other Transaction Document, including, without limitation, Section 2(g) hereof; provided that an Investor and its pledgee shall be required to comply with the provisions of Section 2(g) hereof in order to effect a sale, transfer or assignment of Securities to such pledgee. The Company hereby agrees to execute and deliver such documentation as a pledgee of the Securities may reasonably request in connection with a pledge of the Securities to such pledgee by a Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Disclosure of Transactions and Other Material Information</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Disclosure of Transactions.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) <u>Initial Closing</u>. The Company shall, on or before 9:00 a.m., New York time, on the Public Company Date, issue a press release (the "**Initial Press Release**") reasonably acceptable to the Buyers disclosing all the material terms of the transactions contemplated by the Transaction Documents. On or before 9:00 a.m., New York time, on the Public Company Date, the Company shall file a Current Report on Form 8-K describing all the material terms of the transactions contemplated by the Transaction Documents in the form required by the 1934 Act and attaching all the material Transaction Documents (including, without limitation, this Agreement (and all schedules to this Agreement), the form of Notes, the form of the Registration Rights Agreement, the form of Leak-Out Agreement, the form of Lock-Up Agreement, and the form of Security Agreement) (the "**Initial 8-K Filing**"). From and after the filing of the Initial 8-K Filing, the Company shall have disclosed all material, non-public information (if any) provided to any of the Buyers by the Company or any of its Subsidiaries or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents. In addition, effective upon the filing of the Initial 8-K Filing, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, affiliates, employees or agents, on the one hand, and any of the Buyers or any of their affiliates, on the other hand, shall terminate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) <u>Additional Closings</u>. The Company shall, on or before 9:00 a.m., New York time, on the first (1st) Business Day after the Company delivers to the Buyers participating (or receives from a Buyer electing to participate, as applicable) in such Additional Closing an Additional Closing Notice, either issue a press release (each, an "**Additional Press Release**", and together with the Initial Press Release, the "**Press Releases**") or file a Current Report on Form 8-K (each, an "**Additional 8-K Filing**", and together with the Initial 8-K Filing, the "**8-K Filings**"), in each case reasonably acceptable to such Buyer participating in such Additional Closing, disclosing that "an institutional investor" has elected to deliver an Additional Closing Notice to the Company or the Company has elected to effect an Additional Closing, as applicable. From and after the filing of the Additional Press Release or Additional 8-K Filing, solely to the extent such Additional Closing Notice constitutes material non-public information (as specified by the Company in such applicable Additional Closing Notice), the Company shall have disclosed all material, non-public information (if any) provided to any of the Buyers by the Company or any of its Subsidiaries or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents. In addition, effective upon the filing of the Additional 8-K Filing, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, affiliates, employees or agents, on the one hand, and any of the Buyers or any of their affiliates, on the other hand, shall terminate.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Limitations on Disclosure</u>. The Company shall not, and the Company shall cause each of its Subsidiaries and each of its and their respective officers, directors, employees and agents not to, provide any Buyer with any material, non-public information regarding the Company or any of its Subsidiaries from and after the date hereof without the express prior written consent of such Buyer (which may be granted or withheld in such Buyer's sole discretion). In the event of a breach of any of the foregoing covenants, including, without limitation, Section 4(m) of this Agreement, or any of the covenants or agreements contained in any other Transaction Document, by the Company, any of its Subsidiaries, or any of its or their respective officers, directors, employees and agents (as determined in the reasonable good faith judgment of such Buyer), in addition to any other remedy provided herein or in the Transaction Documents, such Buyer shall have the right to make a public disclosure, in the form of a press release, public advertisement or otherwise, of such breach or such material, non-public information, as applicable, without the prior approval by the Company, any of its Subsidiaries, or any of its or their respective officers, directors, employees or agents. No Buyer shall have any liability to the Company, any of its Subsidiaries, or any of its or their respective officers, directors, employees, affiliates, shareholders or agents, for any such disclosure. To the extent that the Company delivers any material, non-public information to a Buyer without such Buyer's consent, the Company hereby covenants and agrees that such Buyer shall not have any duty of confidentiality with respect to, or a duty not to trade on the basis of, such material, non-public information. Subject to the foregoing, neither the Company, its Subsidiaries nor any Buyer shall issue any press releases or any other public statements with respect to the transactions contemplated hereby; provided, however, the Company shall be entitled, without the prior approval of any Buyer, to make the Press Releases and any press release or other public disclosure with respect to such transactions (i) in substantial conformity with the 8-K Filings and contemporaneously therewith and (ii) as is required by applicable law and regulations (provided that in the case of clause (i) each Buyer shall be consulted by the Company in connection with any such press release or other public disclosure prior to its release). Without the prior written consent of the applicable Buyer (which may be granted or withheld in such Buyer's sole discretion), the Company shall not (and shall cause each of its Subsidiaries and affiliates to not) disclose the name of such Buyer in any filing, announcement, release or otherwise. Notwithstanding anything contained in this Agreement to the contrary and without implication that the contrary would otherwise be true, the Company expressly acknowledges and agrees that no Buyer shall have (unless expressly agreed to by a particular Buyer after the date hereof in a written definitive and binding agreement executed by the Company and such particular Buyer (it being understood and agreed that no Buyer may bind any other Buyer with respect thereto)), any duty of confidentiality with respect to, or a duty not to trade on the basis of, any material, non-public information regarding the Company or any of its Subsidiaries.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>Other Confidential Information. Disclosure Failures; Disclosure Delay Payments</u>. In addition to other remedies set forth in this Section 4(i), and without limiting anything set forth in any other Transaction Document, at any time after each Closing Date if the Company, any of its Subsidiaries, or any of their respective officers, directors, employees or agents, provides any Buyer with material non-public information relating to the Company or any of its Subsidiaries (each, the "**Confidential Information**"), the Company shall, on or prior to the applicable Required Disclosure Date (as defined below), publicly disclose such Confidential Information on a Current Report on Form 8-K or otherwise (each, a "**Disclosure**"). From and after such Disclosure, the Company shall have disclosed all Confidential Information provided to such Buyer by the Company or any of its Subsidiaries or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents. In addition, effective upon such Disclosure, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, affiliates, employees or agents, on the one hand, and any of the Buyers or any of their affiliates, on the other hand, shall terminate. In the event that the Company fails to effect such Disclosure on or prior to the Required Disclosure Date and such Buyer shall have possessed Confidential Information for at least ten (10) consecutive Trading Days (each, a "**Disclosure Failure**"), then, as partial relief for the damages to such Buyer by reason of any such delay in, or reduction of, its ability to buy or sell shares of Common Stock after such Required Disclosure Date (which remedy shall not be exclusive of any other remedies available at law or in equity), the Company shall pay to such Buyer an amount in cash equal to the greater of (I) two percent (2%) of the aggregate principal of Notes purchased by such Buyer hereunder and (II) the applicable Disclosure Restitution Amount (as defined below), on each of the following dates (each, a "**Disclosure Delay Payment Date**"): (i) on the date of such Disclosure Failure and (ii) on every thirty (30) day anniversary such Disclosure Failure until the earlier of (x) the date such Disclosure Failure is cured and (y) such time as all such non-public information provided to such Buyer shall cease to be Confidential Information (as evidenced by a certificate, duly executed by an authorized officer of the Company to the foregoing effect) (such earlier date, as applicable, a "**Disclosure Cure Date**"). Following the initial Disclosure Delay Payment for any particular Disclosure Failure, without limiting the foregoing, if a Disclosure Cure Date occurs prior to any thirty (30) day anniversary of such Disclosure Failure, then such Disclosure Delay Payment (prorated for such partial month) shall be made on the second (2nd) Business Day after such Disclosure Cure Date. The payments to which a Buyer shall be entitled pursuant to this Section 4(i)(iii) are referred to herein as "**Disclosure Delay Payments.**" In the event the Company fails to make Disclosure Delay Payments in a timely manner in accordance with the foregoing, such Disclosure Delay Payments shall bear interest at the rate of two percent (2%) per month (prorated for partial months) until paid in full.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) For the purpose of this Agreement the following definitions shall apply:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) "**Disclosure Failure Market Price**" means, as of any Disclosure Delay Payment Date, the price computed as the quotient of (I) the sum of the five (5) highest VWAPs (as defined in the Notes) of the Common Stock during the applicable Disclosure Restitution Period (as defined below), divided by (II) five (5) (such period, the "**Disclosure Failure Measuring Period**"). All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction that proportionately decreases or increases the Common Stock during such Disclosure Failure Measuring Period.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) "**Disclosure Restitution Amount**" means, as of any Disclosure Delay Payment Date, the product of (x) difference of (I) the Disclosure Failure Market Price less (II) the lowest purchase price, per share of Common Stock, of any Common Stock issued or issuable to such Buyer pursuant to this Agreement or any other Transaction Documents, multiplied by (y) 10% of the aggregate daily dollar trading volume (as reported on Bloomberg (as defined in the Notes)) of the Common Stock on the Principal Market (as defined in the Notes) for each Trading Day either (1) with respect to the initial Disclosure Delay Payment Date, during the period commencing on the applicable Required Disclosure Date through and including the Trading Day immediately prior to the initial Disclosure Delay Payment Date or (2) with respect to each other Disclosure Delay Payment Date, during the period commencing the immediately preceding Disclosure Delay Payment Date through and including the Trading Day immediately prior to such applicable Disclosure Delay Payment Date (such applicable period, the "**Disclosure Restitution Period**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) "**Required Disclosure Date**" means (x) if such Buyer authorized the delivery of such Confidential Information, either (I) if the Company and such Buyer have mutually agreed upon a date (as evidenced by an e-mail or other writing) of Disclosure of such Confidential Information, such agreed upon date or (II) otherwise, the seventh (7<sup>th</sup>) calendar day after the date such Buyer first received any Confidential Information or (y) if such Buyer did not authorize the delivery of such Confidential Information, the first (1<sup>st</sup>) Business Day after such Buyer's receipt of such Confidential Information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Reservation of Shares</u>. Until the later of (x) the Additional Closing Expiration Date and (y) such date as no Notes remain outstanding (the "**Covenant Release Date**"), the Company shall take all action necessary to at all times have authorized, and reserved for the purpose of issuance, no less than 200% of the maximum number of Conversion Shares issuable upon conversion of the Notes (assuming for purposes hereof that (w) all Additional Notes issuable hereunder shall have been issued at an Additional Closing on the Initial Closing Date, (x) the Notes are convertible at the Alternate Conversion Price then in effect assuming an Alternate Conversion Date as of the applicable date of determination, (y) interest on the Notes shall accrue through the twenty-four anniversary of the Initial Closing Date and will be converted in shares of Common Stock at a conversion price equal to the Alternate Conversion Price assuming an Alternate Conversion Date as of the applicable date of determination and (z) any such conversion shall not take into account any limitations on the conversion of the Notes set forth in the Notes)(collectively, the "**Required Reserve Amount**"); provided that at no time shall the number of shares of Common Stock reserved pursuant to this Section 4(j) be reduced other than proportionally in connection with any conversion, exercise and/or redemption, as applicable of Notes. If at any time the number of shares of Common Stock authorized and reserved for issuance is not sufficient to meet the Required Reserve Amount, the Company will promptly take all corporate action necessary to authorize and reserve a sufficient number of shares, including, without limitation, calling a special meeting of shareholders to authorize additional shares to meet the Company's obligations pursuant to the Transaction Documents, in the case of an insufficient number of authorized shares, obtain shareholder approval of an increase in such authorized number of shares, and voting the management shares of the Company in favor of an increase in the authorized shares of the Company to ensure that the number of authorized shares is sufficient to meet the Required Reserve Amount.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>Conduct of Business</u>. The business of the Company and its Subsidiaries shall not be conducted in violation of any law, ordinance or regulation of any Governmental Entity, except where such violations would not reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>Other Notes; Variable Securities</u>. Until the Covenant Release Date, the Company and each Subsidiary shall be prohibited from effecting or entering into an agreement to effect any Subsequent Placement (as defined below) involving a Variable Rate Transaction (other than a Permitted Equity Line (as defined below)). "**Variable Rate Transaction**" means a transaction in which the Company or any Subsidiary (i) issues or sells any Common Stock Equivalents either (A) at a conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such Common Stock Equivalents, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such Common Stock Equivalents or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the shares of Common Stock, other than pursuant to a customary "weighted average" anti-dilution provision or (ii) enters into any agreement (including, without limitation, an equity line of credit or an "at-the-market" offering) whereby the Company or any Subsidiary may sell securities at a future determined price (other than standard and customary "preemptive" or "participation" rights). Each Buyer shall be entitled to obtain injunctive relief against the Company and its Subsidiaries to preclude any such issuance, which remedy shall be in addition to any right to collect damages. "**Permitted Equity Line**" means an equity line of credit or at-the-market offering by the Placement Agent in an aggregate amount per Trading Day not to exceed 10% of the daily trading volume of the Common Stock as reported by Bloomberg, LP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) <u>Participation Right</u>. At any time on or prior to the twenty-four (24) month anniversary of the Initial Closing Date, the Company shall not, directly or indirectly, effect any Subsequent Placement unless the Company shall have first complied with this Section 4(m). The Company acknowledges and agrees that the right set forth in this Section 4(m) is a right granted by the Company, separately, to each Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) At least five (5) Trading Days prior to any proposed or intended Subsequent Placement (or twelve (12) hours in the case of an intra-day or overnight takedown offering), the Company shall deliver to each Buyer a written notice (each such notice, a "**Pre-Notice**"), which Pre-Notice shall not contain any information (including, without limitation, material, non-public information) other than: (A) if the proposed Offer Notice (as defined below) constitutes or contains material, non-public information, a statement asking whether the Investor is willing to accept material non-public information or (B) if the proposed Offer Notice does not constitute or contain material, non-public information, (x) a statement that the Company proposes or intends to effect a Subsequent Placement, (y) a statement that the statement in clause (x) above does not constitute material, non-public information and (z) a statement informing such Buyer that it is entitled to receive an Offer Notice (as defined below) with respect to such Subsequent Placement upon its written request. Upon the written request of a Buyer within three (3) Trading Days (or twelve (12) hours in the case of an intra-day or overnight takedown offering) after the Company's delivery to such Buyer of such Pre-Notice, and only upon a written request by such Buyer, the Company shall promptly, but no later than one (1) Trading Day (or twelve (12) hours in the case of an intra-day or overnight takedown offering) after such request, deliver to such Buyer an irrevocable written notice (the "**Offer Notice**") of any proposed or intended issuance or sale or exchange (the "**Offer**") of the securities being offered (the "**Offered Securities**") in a Subsequent Placement, which Offer Notice shall (A) identify and describe the Offered Securities, (B) describe the price and other terms upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be issued, sold or exchanged, (C) identify the Persons (if known) to which or with which the Offered Securities are to be offered, issued, sold or exchanged and (D) offer to issue and sell to or exchange with such Buyer in accordance with the terms of the Offer such Buyer's pro rata portion of 15% of the Offered Securities, provided that the number of Offered Securities which such Buyer shall have the right to subscribe for under this Section 4(m) shall be (x) based on such Buyer's pro rata portion of the aggregate original principal amount of the Notes purchased hereunder by all Buyers (the "**Basic Amount**"), and (y) with respect to each Buyer that elects to purchase its Basic Amount, any additional portion of the Offered Securities attributable to the Basic Amounts of other Buyers as such Buyer shall indicate it will purchase or acquire should the other Buyers subscribe for less than their Basic Amounts (the "**Undersubscription Amount**"), which process shall be repeated until each Buyer shall have an opportunity to subscribe for any remaining Undersubscription Amount.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) To accept an Offer, in whole or in part, such Buyer must deliver a written notice to the Company prior to the end of the fifth (5<sup>th</sup>) Business Day (or in the case of an intra-day or overnight takedown offering, twelve (12) hours) after such Buyer's receipt of the Offer Notice (the "**Offer Period**"), setting forth the portion of such Buyer's Basic Amount that such Buyer elects to purchase and, if such Buyer shall elect to purchase all of its Basic Amount, the Undersubscription Amount, if any, that such Buyer elects to purchase (in either case, the "**Notice of Acceptance**"). If the Basic Amounts subscribed for by all Buyers are less than the total of all of the Basic Amounts, then each Buyer who has set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Basic Amounts subscribed for, the Undersubscription Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed for exceed the difference between the total of all the Basic Amounts and the Basic Amounts subscribed for (the "**Available Undersubscription Amount**"), each Buyer who has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the Basic Amount of such Buyer bears to the total Basic Amounts of all Buyers that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent it deems reasonably necessary. Notwithstanding the foregoing, if the Company desires to modify or amend the terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may deliver to each Buyer a new Offer Notice and the Offer Period shall expire on the fifth (5<sup>th</sup>) Business Day (or in the case of an intra-day or overnight takedown offering, twelve (12) hours) after such Buyer's receipt of such new Offer Notice.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Company shall have five (5) Business Days from the expiration of the Offer Period above (A) to offer, issue, sell or exchange all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Buyer (the "**Refused Securities**") pursuant to a definitive agreement(s) (the "**Subsequent Placement Agreement**"), but only to the offerees described in the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest rates) that are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set forth in the Offer Notice and (B) to publicly announce (x) the execution of such Subsequent Placement Agreement, and (y) either (I) the consummation of the transactions contemplated by such Subsequent Placement Agreement or (II) the termination of such Subsequent Placement Agreement, which shall be filed with the SEC on a Current Report on Form 8-K with such Subsequent Placement Agreement and any documents contemplated therein filed as exhibits thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms specified in Section 4(m)(iii) above), then each Buyer may, at its sole option and in its sole discretion, withdraw its Notice of Acceptance or reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or amount of the Offered Securities that such Buyer elected to purchase pursuant to Section 4(m)(ii) above multiplied by a fraction, (i) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or exchange (including Offered Securities to be issued or sold to Buyers pursuant to this Section 4(m) prior to such reduction) and (ii) the denominator of which shall be the original amount of the Offered Securities. In the event that any Buyer so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Buyers in accordance with Section 4(m)(i) above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) Upon the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Buyer shall acquire from the Company, and the Company shall issue to such Buyer, the number or amount of Offered Securities specified in its Notice of Acceptance, as reduced pursuant to Section 4(m)(iv) above if such Buyer has so elected, upon the terms and conditions specified in the Offer. The purchase by such Buyer of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and such Buyer of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to such Buyer and its counsel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) Any Offered Securities not acquired by a Buyer or other Persons in accordance with this Section 4(m) may not be issued, sold or exchanged until they are again offered to such Buyer under the procedures specified in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) The Company and each Buyer agree that if any Buyer elects to participate in the Offer, (A) neither the Subsequent Placement Agreement with respect to such Offer nor any other transaction documents related thereto (collectively, the "**Subsequent Placement Documents**") shall include any term or provision whereby such Buyer shall be required to agree to any restrictions on trading as to any securities of the Company or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in connection with, any agreement previously entered into with the Company or any instrument received from the Company, (B) the Subsequent Placement Documents shall not include any representation, warranty or covenant more adverse to such Buyer than as set forth in the Transaction Documents, (C) if the Offered Securities to be acquired by a Buyer would result in such Buyer's (together with its Attribution Parties (as defined in the Notes)) beneficial ownership of Common Stock to exceed the Beneficial Ownership Limitation (as defined in the Notes), such Buyer shall be permitted to receive Offered Securities (whether as a Common Stock Equivalent or otherwise) with a beneficial ownership limitation in the form of Section 3(d) of the Notes, *mutatis mutandis*, and (D) any registration rights set forth in such Subsequent Placement Documents shall be similar in all material respects to the registration rights contained in the Registration Rights Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) Notwithstanding anything to the contrary in this Section 4(m) and unless otherwise agreed to by such Buyer, the Company shall either confirm in writing to such Buyer that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose its intention to issue the Offered Securities, in either case, in such a manner such that such Buyer will not be in possession of any material, non-public information, by the fifth (5<sup>th</sup>) Business Day following delivery of the Offer Notice. If by such fifth (5<sup>th</sup>) Business Day, no public disclosure regarding a transaction with respect to the Offered Securities has been made, and no notice regarding the abandonment of such transaction has been received by such Buyer, such transaction shall be deemed to have been abandoned and such Buyer shall not be in possession of any material, non-public information with respect to the Company or any of its Subsidiaries. Should the Company decide to pursue such transaction with respect to the Offered Securities, the Company shall provide such Buyer with another Offer Notice and such Buyer will again have the right of participation set forth in this Section 4(m). The Company shall not be permitted to deliver more than one such Offer Notice to such Buyer in any sixty (60) day period, except as expressly contemplated by the last sentence of Section 4(m)(ii).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) The restrictions contained in this Section 4(m) shall not apply in connection with the issuance of any Excluded Securities (as defined below). The Company shall not circumvent the provisions of this Section 4(m) by providing terms or conditions to one Buyer that are not provided to all.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) <u>Dilutive Issuances</u>. Prior to the Covenant Release Date, the Company shall not, in any manner, enter into or affect any Dilutive Issuance (as defined in the Notes) if the effect of such Dilutive Issuance is to cause the Company to be required to issue upon conversion of any Notes any shares of Common Stock in excess of that number of shares of Common Stock which the Company may issue upon conversion of the Notes without breaching the Company's obligations under the rules or regulations of the Principal Market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) <u>Passive Foreign Investment Company</u>. The Company shall conduct its business, and shall cause its Subsidiaries to conduct their respective businesses, in such a manner as will ensure that the Company will not be deemed to constitute a passive foreign investment company within the meaning of Section 1297 of the Code.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) <u>Restriction on Redemption and Cash Dividends</u>. Prior to the Covenant Release Date, the Company shall not, directly or indirectly, redeem, or declare or pay any cash dividend or distribution on, any securities of the Company without the prior express written consent of the Buyers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) <u>Corporate Existence</u>. Prior to the Covenant Release Date, the Company shall not be party to any Fundamental Transaction (as defined in the Notes) unless the Company is in compliance with the applicable provisions governing Fundamental Transactions set forth in the Notes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) <u>Regulation M</u>. The Company will not take any action prohibited by Regulation M under the 1934 Act, in connection with the distribution of the Securities contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) <u>General Solicitation</u>. None of the Company, any of its affiliates (as defined in Rule 501(b) under the 1933 Act) or any person acting on behalf of the Company or such affiliate will solicit any offer to buy or offer or sell the Securities by means of any form of general solicitation or general advertising within the meaning of Regulation D, including: (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar medium or broadcast over television or radio; and (ii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) <u>Integration</u>. None of the Company, any of its affiliates (as defined in Rule 501(b) under the 1933 Act), or any person acting on behalf of the Company or such affiliate will sell, offer for sale, or solicit offers to buy or otherwise negotiate in respect of any security (as defined in the 1933 Act) which will be integrated with the sale of the Securities in a manner which would require the registration of the Securities under the 1933 Act and the Company will take all action that is appropriate or necessary to assure that its offerings of other securities will not be integrated for purposes of the 1933 Act with the issuance of Securities contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) <u>Notice of Disqualification Events</u>. The Company will notify the Buyers in writing, prior to the Closing Date of (i) any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification Event relating to any Issuer Covered Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>Additional Registration Statements</u>. Until the Applicable Date (as defined below) and at any time thereafter while any Registration Statement is not effective or the prospectus contained therein is not available for use or any Current Public Information Failure (as defined in the Registration Rights Agreement) exists, the Company shall not file a registration statement or an offering statement under the 1933 Act relating to securities that are not the Registrable Securities (other than a registration statement on Form S-8 or such supplements or amendments to registration statements that are outstanding and have been declared effective by the SEC as of the date hereof (solely to the extent necessary to keep such registration statements effective and available and not with respect to any Subsequent Placement)). "**Applicable Date**" means, with respect to any given Closing, the later of (i) the applicable Closing Date and (ii) the earlier of (x) the first date on which the resale by the Buyers of all the Registrable Securities required to be filed on the initial Registration Statement with respect to such Closing pursuant to the Registration Rights Agreement is declared effective by the SEC (and each prospectus contained therein is available for use on such date) or (y) the first date on which all of the Registrable Securities with respect to the Securities issued at such Closing are eligible to be resold by the Buyers pursuant to Rule 144 (or, if a Current Public Information Failure has occurred and is continuing, such later date after which the Company has cured such Current Public Information Failure).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w) <u>Additional Issuance of Securities</u>. Until the Covenant Release Date, the Company will not, without the prior written consent of the Required Holders (as defined below), issue any Notes (other than to the Buyers as contemplated hereby) and the Company shall not issue any other securities that would cause a breach or default under the Notes. The Company agrees that (A) for the period commencing on the date hereof and ending on the date immediately following the 60<sup>th</sup> Trading Day after the later of (x) the Public Company Date and (y) the Applicable Date with respect to the Initial Closing and (B) for each period commencing on the applicable Additional Closing Notice Date for such applicable Additional Closing and ending on the date immediately following the 45<sup>th</sup> Trading Day after the later of (x) the Public Company Date and (y) the Applicable Date for such Additional Closing; provided that, such period shall be extended by the number of calendar days during such period and any extension thereof contemplated by this proviso on which any registration statement registering the resale of any Registrable Securities is not effective or any prospectus contained therein is not available for use or any Current Public Information Failure (the "**Restricted Period**"), neither the Company nor any of its Subsidiaries shall directly or indirectly issue, offer, sell, grant any option or right to purchase, or otherwise dispose of (or announce any issuance, offer, sale, grant of any option or right to purchase or other disposition of) any equity security or any equity-linked or related security (including, without limitation, any "equity security" (as that term is defined under Rule 405 promulgated under the 1933 Act), any Common Stock Equivalents, any debt, any preferred stock or any purchase rights) (any such issuance, offer, sale, grant, disposition or announcement (whether occurring during the Restricted Period or at any time thereafter) is referred to as a "**Subsequent Placement**"). Notwithstanding the foregoing, this Section 4(w) shall not apply in respect of the issuance of (i) shares of Common Stock or standard options to purchase Common Stock to directors, officers or employees of the Company in their capacity as such pursuant to an Approved Stock Plan (as defined below), provided that (1) all such issuances (taking into account the shares of Common Stock issuable upon exercise of such options) after the date hereof pursuant to this clause (i) do not, in the aggregate, exceed more than 10% of the Common Stock issued and outstanding immediately prior to the date hereof and (2) the exercise price of any such options is not lowered, none of such options are amended to increase the number of shares issuable thereunder and none of the terms or conditions of any such options are otherwise materially changed in any manner that adversely affects any of the Buyers; (ii) shares of Common Stock issued upon the conversion or exercise of Common Stock Equivalents (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) issued prior to the date hereof, provided that the conversion, exercise or other method of issuance (as the case may be) of any such Common Stock Equivalent is made solely pursuant to the conversion, exercise or other method of issuance (as the case may be) provisions of such Common Stock Equivalent that were in effect on the date immediately prior to the date of this Agreement, the conversion, exercise or issuance price of any such Common Stock Equivalents (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) is not lowered, none of such Common Stock Equivalents (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) are amended to increase the number of shares issuable thereunder and none of the terms or conditions of any such Common Stock Equivalents (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) are otherwise materially changed in any manner that adversely affects any of the Buyers; (iii) the Conversion Shares and (iv) a private placement of Common Stock at a price per share not less than $10.00 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar events) (each of the foregoing in clauses (i) through (iv), collectively the "**Excluded Securities**"). For the purpose of this Agreement, "**Approved Stock Plan**" means any employee benefit plan which has been approved by the board of directors of the Company prior to or subsequent to the date hereof pursuant to which shares of Common Stock and standard options to purchase Common Stock may be issued to any employee, officer or director for services provided to the Company in their capacity as such.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) <u>Conversion Procedures</u>. The form of Conversion Notice (as defined in the Notes) included in the Notes set forth the totality of the procedures required of the Buyers in order to convert the Notes. Except as provided in Section 5(d), no additional legal opinion, other information or instructions shall be required of the Buyers to convert their Notes. The Company shall honor conversions of the Notes and shall deliver the Conversion Shares in accordance with the terms, conditions and time periods set forth in the Notes. Without limiting the preceding sentences, no ink-original conversion notice or exercise notice shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any conversion notice or exercise notice form be required in order to convert the Notes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y) <u>Collateral Agent</u>. Each Buyer hereby (i) appoints [\*\*\*], as the collateral agent hereunder and under the other Security Documents (in such capacity, the "**Collateral Agent**"), and (ii) authorizes the Collateral Agent (and its officers, directors, employees and agents) to take such action on such Buyer's behalf in accordance with the terms hereof and thereof. The Collateral Agent shall not have, by reason hereof or any of the other Security Documents, a fiduciary relationship in respect of any Buyer. Neither the Collateral Agent nor any of its officers, directors, employees or agents shall have any liability to any Buyer for any action taken or omitted to be taken in connection hereof or any other Security Document except to the extent caused by its own gross negligence or willful misconduct, and each Buyer agrees to defend, protect, indemnify and hold harmless the Collateral Agent and all of its officers, directors, employees and agents (collectively, the "**Collateral Agent Indemnitees**") from and against any losses, damages, liabilities, obligations, penalties, actions, judgments, suits, fees, costs and expenses (including, without limitation, reasonable attorneys' fees, costs and expenses) incurred by such Collateral Agent Indemnitee, whether direct, indirect or consequential, arising from or in connection with the performance by such Collateral Agent Indemnitee of the duties and obligations of Collateral Agent pursuant hereto or any of the Security Documents. The Collateral Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Holders, and such instructions shall be binding upon all holders of Notes; provided, however, that the Collateral Agent shall not be required to take any action which, in the reasonable opinion of the Collateral Agent, exposes the Collateral Agent to liability or which is contrary to this Agreement or any other Transaction Document or applicable law. The Collateral Agent shall be entitled to rely upon any written notices, statements, certificates, orders or other documents or any telephone message believed by it in good faith to be genuine and correct and to have been signed, sent or made by the proper Person, and with respect to all matters pertaining to this Agreement or any of the other Transaction Documents and its duties hereunder or thereunder, upon advice of counsel selected by it.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(z) <u>Successor Collateral Agent.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Collateral Agent may resign from the performance of all its functions and duties hereunder and under the other Transaction Documents at any time by giving at least ten (10) Business Days' prior written notice to the Company and each holder of Notes. Such resignation shall take effect upon the acceptance by a successor Collateral Agent of appointment pursuant to clauses (ii) and (iii) below or as otherwise provided below. If at any time the Collateral Agent (together with its affiliates) beneficially owns less than $100,000 in aggregate principal amount of Notes, the Required Holders may, by written consent, remove the Collateral Agent from all its functions and duties hereunder and under the other Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Upon any such notice of resignation or removal, the Required Holders shall appoint a successor collateral agent. Upon the acceptance of any appointment as Collateral Agent hereunder by a successor agent, such successor collateral agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the collateral agent, and the Collateral Agent shall be discharged from its duties and obligations under this Agreement and the other Transaction Documents. After the Collateral Agent's resignation or removal hereunder as the collateral agent, the provisions of this Section 4(z) shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Collateral Agent under this Agreement and the other Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) If a successor collateral agent shall not have been so appointed within ten (10) Business Days of receipt of a written notice of resignation or removal, the Collateral Agent shall then appoint a successor collateral agent who shall serve as the Collateral Agent until such time, if any, as the Required Holders appoint a successor collateral agent as provided above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) In the event that a successor Collateral Agent is appointed pursuant to the provisions of this Section 4(z) that is not a Buyer or an affiliate of any Buyer (or the Required Holders or the Collateral Agent (or its successor), as applicable, notify the Company that they or it wants to appoint such a successor Collateral Agent pursuant to the terms of this Section 4(z)), the Company and each Subsidiary thereof covenants and agrees to promptly take all actions reasonably requested by the Required Holders or the Collateral Agent (or its successor), as applicable, from time to time, to secure a successor Collateral Agent satisfactory to the requesting part(y)(ies), in their sole discretion, including, without limitation, by paying all reasonable and customary fees and expenses of such successor Collateral Agent, by having the Company and each Subsidiary thereof agree to indemnify any successor Collateral Agent pursuant to reasonable and customary terms and by each of the Company and each Subsidiary thereof executing a collateral agency agreement or similar agreement and/or any amendment to the Security Documents reasonably requested or required by the successor Collateral Agent.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aa) [<u>Reserved</u>].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bb) <u>Shareholder Consent</u>. Prior to the tenth (10<sup>th</sup>) calendar day after the Initial Closing Date, the Company shall have obtained the prior written consent of the requisite shareholders providing for the approval of the issuance of all of the Securities (assuming the consummation in full of all Closings hereunder on or prior to such time of determination) in compliance with the rules and regulations of the Principal Market (without regard to any limitations on conversion set forth in the Notes) (such affirmative approval being referred to herein as the "**Shareholder Consent**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(cc) <u>No Waiver of Lock-Up Agreements</u>. The Company shall not amend, waive, modify or fail to use reasonable best efforts to enforce any provision of any Lock-Up Agreement. For the avoidance of doubt, no Buyer shall be a third party beneficiary of any Lock-Up Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(dd) <u>Closing Documents</u>. On or prior to fourteen (14) calendar days after the Closing Date, the Company agrees to deliver, or cause to be delivered, to each Buyer and Kelley Drye & Warren LLP a complete closing set of the executed Transaction Documents, Securities and any other document required to be delivered to any party pursuant to Section 7 hereof or otherwise.

**5. REGISTER; TRANSFER AGENT INSTRUCTIONS; LEGEND.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Register</u>. The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate by notice to each holder of Securities), a register for Notes in which the Company shall record the name and address of the Person in whose name the Notes have been issued (including the name and address of each transferee), the aggregate principal amount of the Notes held by such Person, and the aggregate number of Conversion Shares issuable pursuant to the terms of the Notes. The Company shall keep the register open and available at all times during business hours for inspection of any Buyer or its legal representatives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Transfer Agent Instructions</u>. On or prior to the Public Company Date, the Company shall issue irrevocable instructions to its transfer agent and any subsequent transfer agent (as applicable, the "**Transfer Agent**") in a form acceptable to each of the Buyers (the "**Irrevocable Transfer Agent Instructions**") to issue certificates or credit shares to the applicable balance accounts at The Depository Trust Company ("**DTC**"), registered in the name of each Buyer or its respective nominee(s), for the Conversion Shares in such amounts as specified from time to time by each Buyer to the Company upon conversion of the Notes. The Company represents and warrants that no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5(b), and stop transfer instructions to give effect to Section 2(g) hereof, will be given by the Company to its transfer agent with respect to the Securities, and that the Securities shall otherwise be freely transferable on the books and records of the Company, as applicable, to the extent provided in this Agreement and the other Transaction Documents. If a Buyer effects a sale, assignment or transfer of the Securities in accordance with Section 2(g), the Company shall permit the transfer and shall promptly instruct its transfer agent to issue one or more certificates or credit shares to the applicable balance accounts at DTC in such name and in such denominations as specified by such Buyer to effect such sale, transfer or assignment. In the event that such sale, assignment or transfer involves Conversion Shares sold, assigned or transferred pursuant to an effective registration statement or in compliance with Rule 144, the transfer agent shall issue such shares to such Buyer, assignee or transferee (as the case may be) without any restrictive legend in accordance with Section 5(d) below. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to a Buyer. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 5(b) will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section 5(b), that a Buyer shall be entitled, in addition to all other available remedies, to an order and/or injunction restraining any breach and requiring immediate issuance and transfer, without the necessity of showing economic loss and without any bond or other security being required. The Company shall cause its counsel to issue the legal opinion referred to in the Irrevocable Transfer Agent Instructions to the Company's transfer agent on each Effective Date (as defined in the Registration Rights Agreement). Any fees (with respect to the transfer agent, counsel to the Company or otherwise) associated with the issuance of such opinion or the removal of any legends on any of the Securities shall be borne by the Company.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Legends</u>. Each Buyer understands that the Securities have been issued (or will be issued in the case of the Conversion Shares) pursuant to an exemption from registration or qualification under the 1933 Act and applicable state securities laws, and except as set forth below, the Securities shall bear any legend as required by the "blue sky" laws of any state and a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such stock certificates):

[NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Removal of Legends</u>. Certificates evidencing Securities shall not be required to contain the legend set forth in Section 5(c) above or any other legend (i) while a registration statement covering the resale of such Securities is effective under the 1933 Act, (ii) following any sale of such Securities pursuant to Rule 144 (assuming the transferor is not an affiliate of the Company), (iii) if such Securities are eligible to be sold, assigned or transferred under Rule 144 (provided that a Buyer provides the Company with reasonable assurances that such Securities are eligible for sale, assignment or transfer under Rule 144 which shall not include an opinion of Buyer's counsel), (iv) in connection with a sale, assignment or other transfer (other than under Rule 144), provided that such Buyer provides the Company with an opinion of counsel to such Buyer, in a generally acceptable form, to the effect that such sale, assignment or transfer of the Securities may be made without registration under the applicable requirements of the 1933 Act or (v) if such legend is not required under applicable requirements of the 1933 Act (including, without limitation, controlling judicial interpretations and pronouncements issued by the SEC). If a legend is not required pursuant to the foregoing, the Company shall no later than two (2) Trading Days (or such earlier date as required pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement of a trade initiated on the date such Buyer delivers such legended certificate representing such Securities to the Company) following the delivery by a Buyer to the Company or the transfer agent (with notice to the Company) of a legended certificate representing such Securities (endorsed or with stock powers attached, signatures guaranteed, and otherwise in form necessary to affect the reissuance and/or transfer, if applicable), together with any other deliveries from such Buyer as may be required above in this Section 5(d), as directed by such Buyer, either: (A) provided that the Company's transfer agent is participating in the DTC Fast Automated Securities Transfer Program ("**FAST**") and such Securities are Conversion Shares, credit the aggregate number of shares of Common Stock to which such Buyer shall be entitled to such Buyer's or its designee's balance account with DTC through its Deposit/Withdrawal at Custodian system or (B) if the Company's transfer agent is not participating in FAST, issue and deliver (via reputable overnight courier) to such Buyer, a certificate representing such Securities that is free from all restrictive and other legends, registered in the name of such Buyer or its designee (the date by which such credit is so required to be made to the balance account of such Buyer's or such Buyer's designee with DTC or such certificate is required to be delivered to such Buyer pursuant to the foregoing is referred to herein as the "**Required Delivery Date**", and the date such shares of Common Stock are actually delivered without restrictive legend to such Buyer or such Buyer's designee with DTC, as applicable, the "**Share Delivery Date**"). The Company shall be responsible for any transfer agent fees or DTC fees with respect to any issuance of Securities or the removal of any legends with respect to any Securities in accordance herewith.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Failure to Timely Deliver; Buy-In</u>. After the Public Company Date, if the Company fails to fail, for any reason or for no reason, to issue and deliver (or cause to be delivered) to a Buyer (or its designee) by the Required Delivery Date, if the Transfer Agent is not participating in FAST, a certificate for the number of Conversion Shares to which such Buyer is entitled and register such Conversion Shares on the Company's share register or, if the Transfer Agent is participating in FAST, to credit the balance account of such Buyer or such Buyer's designee with DTC for such number of Conversion Shares submitted for legend removal by such Buyer pursuant to Section 5(d) above (a "**Delivery Failure**"), then, in addition to all other remedies available to such Buyer, the Company shall pay in cash to such Buyer on each day after the Share Delivery Date and during such Delivery Failure an amount equal to 2% of the product of (A) the sum of the number of shares of Common Stock not issued to such Buyer on or prior to the Required Delivery Date and to which such Buyer is entitled, and (B) any trading price of the Common Stock selected by such Buyer in writing as in effect at any time during the period beginning on the date of the delivery by such Buyer to the Company of the applicable Conversion Shares and ending on the applicable Share Delivery Date. In addition to the foregoing, if on or prior to the Required Delivery Date either (I) if the Transfer Agent is not participating in FAST, the Company shall fail to issue and deliver a certificate to a Buyer and register such shares of Common Stock on the Company's share register or, if the Transfer Agent is participating in FAST, credit the balance account of such Buyer or such Buyer's designee with DTC for the number of shares of Common Stock to which such Buyer submitted for legend removal by such Buyer pursuant to Section 5(d) above (ii) below, and if on or after such Trading Day such Buyer purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Buyer of shares of Common Stock submitted for legend removal by such Buyer pursuant to Section 5(d) above that such Buyer is entitled to receive from the Company (a "**Buy-In**"), then the Company shall, within two (2) Trading Days after such Buyer's request and in such Buyer's discretion, either (i) pay cash to such Buyer in an amount equal to such Buyer's total purchase price (including brokerage commissions and other out-of-pocket expenses, if any, for the shares of Common Stock so purchased) (the "**Buy-In Price**"), at which point the Company's obligation to so deliver such certificate or credit such Buyer's balance account shall terminate and such shares shall be cancelled, or (ii) promptly honor its obligation to so deliver to such Buyer a certificate or certificates or credit the balance account of such Buyer or such Buyer's designee with DTC representing such number of shares of Common Stock that would have been so delivered if the Company timely complied with its obligations hereunder and pay cash to such Buyer in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Conversion Shares that the Company was required to deliver to such Buyer by the Required Delivery Date multiplied by (B) the lowest Closing Sale Price (as defined in the Notes) of the Common Stock on any Trading Day during the period commencing on the date of the delivery by such Buyer to the Company of the applicable Conversion Shares and ending on the date of such delivery and payment under this clause (ii). Nothing shall limit such Buyer's right to pursue any other remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company's failure to timely deliver certificates representing shares of Common Stock (or to electronically deliver such shares of Common Stock) as required pursuant to the terms hereof. Notwithstanding anything herein to the contrary, with respect to any given Delivery Failure, this Section 5(e) shall not apply to the applicable Buyer the extent the Company has already paid such amounts in full to such Buyer with respect to such Delivery Failure, as applicable, pursuant to the analogous sections of the Notes then held by such Buyer.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>FAST Compliance</u>. While any Notes remain outstanding, the Company shall maintain a transfer agent that participates in FAST.

**6. CONDITIONS TO THE COMPANY**'**S OBLIGATION TO SELL.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The obligation of the Company hereunder to issue and sell the Initial Notes to each Buyer at the Initial Closing is subject to the satisfaction, at or before the Initial Closing Date, of each of the following conditions, provided that these conditions are for the Company's sole benefit and may be waived by the Company at any time in its sole discretion by providing each Buyer with prior written notice thereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Such Buyer shall have executed each of the other Transaction Documents to which it is a party and delivered the same to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Such Buyer and each other Buyer shall have delivered to the Company the Purchase Price (less, in the case of any Buyer, the amounts withheld pursuant to Section 4(g)) for the Initial Note being purchased by such Buyer at the Initial Closing by wire transfer of immediately available funds in accordance with the Initial Flow of Funds Letter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The representations and warranties of such Buyer shall be true and correct in all material respects as of the date when made and as of the Initial Closing Date as though originally made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such specific date), and such Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by such Buyer at or prior to the Initial Closing Date.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The obligation of the Company hereunder to issue and sell the Additional Notes to each Buyer at an Additional Closing is subject to the satisfaction, at or before the applicable Additional Closing Date, of each of the following conditions, provided that these conditions are for the Company's sole benefit and may be waived by the Company at any time in its sole discretion by providing each Buyer with prior written notice thereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Such Buyer shall have executed each of the other Transaction Documents to which it is a party and delivered the same to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Such Buyer and each other Buyer shall have delivered to the Company the Purchase Price (less, in the case of any Buyer, the amounts withheld pursuant to Section 4(g)) for the Additional Note being purchased by such Buyer at the Additional Closing by wire transfer of immediately available funds in accordance with the Additional Flow of Funds Letter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The representations and warranties of such Buyer shall be true and correct in all material respects as of the date when made and as of the Additional Closing Date as though originally made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such specific date), and such Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by such Buyer at or prior to the Additional Closing Date.

**7. CONDITIONS TO EACH BUYER**'**S OBLIGATION TO PURCHASE.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The obligation of each Buyer hereunder to purchase its Initial Note at the Initial Closing is subject to the satisfaction, at or before the Initial Closing Date, of each of the following conditions, provided that these conditions are for each Buyer's sole benefit and may be waived by such Buyer at any time in its sole discretion by providing the Company with prior written notice thereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Company and each Subsidiary (as the case may be) shall have duly executed and delivered to such Buyer each of the Transaction Documents to which it is a party and the Company shall have duly executed and delivered to such Buyer an Initial Note in such original principal amount as is set forth across from such Buyer's name in column (3) of the Schedule of Buyers as being purchased by such Buyer at the Initial Closing pursuant to this Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Such Buyer shall have received the opinion of Lucosky Brookman LLP and Polsinelli PC, the Company's counsels, dated as of the Initial Closing Date, in the form acceptable to such Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Company shall have delivered to such Buyer a copy of the Irrevocable Transfer Agent Instructions, in the form acceptable to such Buyer, which instructions shall have been delivered to and acknowledged in writing by the Company's transfer agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) The Company shall have delivered to such Buyer a certificate evidencing the formation and good standing of the Company in such entity's jurisdiction of formation issued by the Secretary of State (or comparable office) of such jurisdiction of formation as of a date within ten (10) days of the Initial Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) The Company shall have delivered to such Buyer a certificate evidencing the Company's qualification as a foreign corporation and good standing issued by the Secretary of State (or comparable office) of each jurisdiction in which the Company conducts business and is required to so qualify, as of a date within ten (10) days of the Initial Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) The Company shall have delivered to such Buyer a certified copy of the Articles of Incorporation as certified by the Georgia Secretary of State within ten (10) days of the Initial Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) [Reserved].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) The Company shall have delivered to such Buyer a certificate, in the form acceptable to such Buyer, executed by the Secretary of the Company and dated as of the Initial Closing Date, as to (i) the resolutions consistent with Section 3(b) as adopted by the Company's board of directors in a form reasonably acceptable to such Buyer, (ii) the Articles of Incorporation of the Company and (iii) the Bylaws of the Company, each as in effect at the Initial Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) Each and every representation and warranty of the Company shall be true and correct as of the date when made and as of the Initial Closing Date as though originally made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such specific date) and the Company shall have performed, satisfied and complied in all respects with the covenants, agreements and conditions required to be performed, satisfied or complied with by the Company at or prior to the Initial Closing Date. Such Buyer shall have received a certificate, duly executed by the Chief Executive Officer of the Company, dated as of the Initial Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by such Buyer in the form acceptable to such Buyer.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) The Company shall have delivered to such Buyer a letter from the Company's transfer agent certifying the number of shares of Common Stock outstanding on the Initial Closing Date immediately prior to the Initial Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) The Company shall have obtained all governmental, regulatory or third-party consents and approvals, if any, necessary for the sale of the Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or Governmental Entity of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) Since the date of execution of this Agreement, no event or series of events shall have occurred that reasonably would have or result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) The Company shall have delivered to such Buyer an irrevocable Shareholder Consent duly executed by the holders which, in the aggregate, have the voting power over at least forty percent (40%) of the Common Stock, in form and substance satisfactory to such Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvii) The Collateral Agent shall have received the Security Agreement, duly executed by the Company and each of its Subsidiaries, together with the original stock certificates representing all of the equity interests and all promissory notes required to be pledged thereunder, accompanied by undated stock powers and allonges executed in blank and other proper instruments of transfer.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xviii) With respect to the Intellectual Property, if any, of the Company or any of its Subsidiaries, the Company and/or such Subsidiaries, as applicable, shall have duly executed and delivered to such Buyer each Assignment For Security for the Intellectual Property of the Company and its Subsidiaries, in the form attached as Exhibit A to the Security Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xix) The Controlled Account Bank and the Collateral Agent shall have duly executed and delivered to such Buyer a Controlled Account Agreement (as defined in the Security Agreement) with respect to account #30130140 of the Company at the Controlled Account Bank (the "**Lockbox Account**"), which after the Initial Closing shall have at least $10.25 million held therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xx) The Company and each Person set forth on <u>Schedule 7(a)(xx)</u> shall have duly executed and delivered to such Buyer a Lock-Up Agreement in substantially the form attached hereto as **<u>Exhibit D</u>** (each, an "**Lock-Up Agreement**") to which they are a party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxi) Such Buyer shall have received a letter on the letterhead of the Company, duly executed by the Chief Executive Officer of the Company, setting forth the wire amounts of each Buyer and the wire transfer instructions of the Lockbox Account (the "**Initial Flow of Funds Letter**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxii) Each Buyer shall have duly executed and delivered to the Company the leak-out agreement in the form attached hereto as **<u>Exhibit E</u>** (each, a "**Leak-Out Agreement**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxiii) The Company shall have duly executed and delivered the administrative fee letter, with StructureCo Opportunities LLC, in the form attached hereto as **<u>Exhibit F</u>** (the "**Administrative Fee Letter**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxiv) The Company and its Subsidiaries shall have delivered to such Buyer such other documents, instruments or certificates relating to the transactions contemplated by this Agreement as such Buyer or its counsel may reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The obligation of each Buyer hereunder to purchase its Additional Note at an Additional Closing is subject to the satisfaction, at or before the applicable Additional Closing Date, of each of the following conditions, provided that these conditions are for each Buyer's sole benefit and may be waived by such Buyer at any time in its sole discretion by providing the Company with prior written notice thereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Company and each Subsidiary (as the case may be) shall have duly executed and delivered to such Buyer each of the Transaction Documents to which it is a party and the Company shall have duly executed and delivered to such Buyer an Additional Note in such original principal amount as is set forth in the appliable Additional Optional Closing Notice as being purchased by such Buyer at the Additional Closing pursuant to this Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Such Buyer shall have received the opinion of Lucosky Brookman LLP and Polsinelli PC, the Company's counsels, dated as of the Additional Closing Date, in the form acceptable to such Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Public Company Date shall have occurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) The Company shall have delivered to such Buyer a copy of the Irrevocable Transfer Agent Instructions, in the form acceptable to such Buyer, which instructions shall have been delivered to and acknowledged in writing by the Company's transfer agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) The Company shall have delivered to such Buyer a certificate evidencing the formation and good standing of the Company and each of its Subsidiaries in each such entity's jurisdiction of formation issued by the Secretary of State (or comparable office) of such jurisdiction of formation as of a date within ten (10) days of the Additional Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) The Company shall have delivered to such Buyer a certificate evidencing the Company's and each Subsidiary's qualification as a foreign corporation and good standing issued by the Secretary of State (or comparable office) of each jurisdiction in which the Company and each Subsidiary conducts business and is required to so qualify, as of a date within ten (10) days of the Additional Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) The Company shall have delivered to such Buyer a certified copy of the Articles of Incorporation as certified by the Georgia Secretary of State within ten (10) days of the Additional Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) Each Subsidiary shall have delivered to such Buyer a certified copy of its Articles of Incorporation (or such equivalent organizational document) as certified by the Secretary of State (or comparable office) of such Subsidiary's jurisdiction of incorporation within ten (10) days of the Additional Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) The Company and each Subsidiary shall have delivered to such Buyer a certificate, in the form acceptable to such Buyer, executed by the Secretary of the Company and each Subsidiary and dated as of the Additional Closing Date, as to (i) the resolutions consistent with Section 3(b) as adopted by the Company's and each Subsidiary's board of directors in a form reasonably acceptable to such Buyer, (ii) the Articles of Incorporation of the Company and the organizational documents of each Subsidiary and (iii) the Bylaws of the Company and the bylaws of each Subsidiary, each as in effect at the Additional Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) Each and every representation and warranty of the Company shall be true and correct as of the date when made and as of the Additional Closing Date as though originally made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such specific date) and the Company shall have performed, satisfied and complied in all respects with the covenants, agreements and conditions required to be performed, satisfied or complied with by the Company at or prior to the Additional Closing Date. Such Buyer shall have received a certificate, duly executed by the Chief Executive Officer of the Company, dated as of the Additional Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by such Buyer in the form acceptable to such Buyer.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) The Company shall have delivered to such Buyer a letter from the Company's transfer agent certifying the number of shares of Common Stock outstanding on the Additional Closing Date immediately prior to the Additional Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) The Common Stock (A) shall be designated for quotation or listed (as applicable) on the Principal Market and (B) shall not have been suspended, as of the Additional Closing Date, by the SEC or the Principal Market from trading on the Principal Market nor shall suspension by the SEC or the Principal Market have been threatened, as of the Additional Closing Date, either (I) in writing by the SEC or the Principal Market or (II) by falling below the minimum maintenance requirements of the Principal Market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) The Company shall have obtained all governmental, regulatory or third-party consents and approvals, if any, necessary for the sale of the Securities, including without limitation, those required by the Principal Market, if any.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or Governmental Entity of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xv) Since the date of execution of this Agreement, no event or series of events shall have occurred that reasonably would have or result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvi) The Company shall have obtained approval of the Principal Market to list or designate for quotation (as the case may be) the Conversion Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvii) The Company shall have delivered to such Buyer an irrevocable Shareholder Consent duly executed by the requisite shareholders, in form and substance satisfactory to such Buyer and the Shareholder Consent shall be effective (without the requirement to deliver any additional notice to the shareholders, whether pursuant to an information statement or otherwise).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xviii) The Collateral Agent shall have received the Security Agreement, duly executed by the Company and each of its Subsidiaries, together with the original stock certificates representing all of the equity interests and all promissory notes required to be pledged thereunder, accompanied by undated stock powers and allonges executed in blank and other proper instruments of transfer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xix) With respect to the Intellectual Property, if any, of the Company or any of its Subsidiaries, the Company and/or such Subsidiaries, as applicable, shall have duly executed and delivered to such Buyer each Assignment For Security for the Intellectual Property of the Company and its Subsidiaries, in the form attached as Exhibit A to the Security Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xx) Such Buyer shall have received a letter on the letterhead of the Company, duly executed by the Chief Executive Officer of the Company, setting forth the wire amounts of each Buyer and the wire transfer instructions of the Company (the "**Additional Flow of Funds Letter**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxi) The Administrative Fee Letter shall remain in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxii) The Company and its Subsidiaries shall have delivered to such Buyer such other documents, instruments or certificates relating to the transactions contemplated by this Agreement as such Buyer or its counsel may reasonably request.

**8. TERMINATION.**

In the event that the Initial Closing shall not have occurred with respect to a Buyer within five (5) Business Days of the date hereof, then such Buyer shall have the right to terminate its obligations under this Agreement with respect to itself at any time on or after the close of business on such date without liability of such Buyer to any other party; provided, however, (i) the right to terminate this Agreement under this Section 8 shall not be available to such Buyer if the failure of the transactions contemplated by this Agreement to have been consummated by such date is the result of such Buyer's breach of this Agreement and (ii) the abandonment of the sale and purchase of the Notes shall be applicable only to such Buyer providing such written notice, provided further that no such termination shall affect any obligation of the Company under this Agreement to reimburse such Buyer for the expenses described in Section 4(g) above. Nothing contained in this Section 8 shall be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or the other Transaction Documents or to impair the right of any party to compel specific performance by any other party of its obligations under this Agreement or the other Transaction Documents.

**9. MISCELLANEOUS.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Governing Law; Jurisdiction; Jury Trial</u>. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of Delaware, without giving effect to any provision of law or rule (whether of the State of Delaware or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Delaware. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in Wilmington, Delaware, for the adjudication of any dispute hereunder or in connection herewith or under any of the other Transaction Documents or with any transaction contemplated hereby or thereby, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude any Buyer from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company's obligations to such Buyer or to enforce a judgment or other court ruling in favor of such Buyer. **EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.**

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Counterparts</u>. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event that any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Headings; Gender</u>. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter, singular and plural forms thereof. The terms "including," "includes," "include" and words of like import shall be construed broadly as if followed by the words "without limitation." The terms "herein," "hereunder," "hereof" and words of like import refer to this entire Agreement instead of just the provision in which they are found.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Severability; Maximum Payment Amounts</u>. If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s). Notwithstanding anything to the contrary contained in this Agreement or any other Transaction Document (and without implication that the following is required or applicable), it is the intention of the parties that in no event shall amounts and value paid by the Company and/or any of its Subsidiaries (as the case may be), or payable to or received by any of the Buyers, under the Transaction Documents (including without limitation, any amounts that would be characterized as "interest" under applicable law) exceed amounts permitted under any applicable law. Accordingly, if any obligation to pay, payment made to any Buyer, or collection by any Buyer pursuant the Transaction Documents is finally judicially determined to be contrary to any such applicable law, such obligation to pay, payment or collection shall be deemed to have been made by mutual mistake of such Buyer, the Company and its Subsidiaries and such amount shall be deemed to have been adjusted with retroactive effect to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by the applicable law. Such adjustment shall be effected, to the extent necessary, by reducing or refunding, at the option of such Buyer, the amount of interest or any other amounts which would constitute unlawful amounts required to be paid or actually paid to such Buyer under the Transaction Documents. For greater certainty, to the extent that any interest, charges, fees, expenses or other amounts required to be paid to or received by such Buyer under any of the Transaction Documents or related thereto are held to be within the meaning of "interest" or another applicable term to otherwise be violative of applicable law, such amounts shall be pro-rated over the period of time to which they relate.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Entire Agreement; Amendments</u>. This Agreement, the other Transaction Documents and the schedules and exhibits attached hereto and thereto and the instruments referenced herein and therein supersede all other prior oral or written agreements between the Buyers, the Company, its Subsidiaries, their affiliates and Persons acting on their behalf, including, without limitation, any transactions by any Buyer with respect to Common Stock or the Securities, and the other matters contained herein and therein, and this Agreement, the other Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments referenced herein and therein contain the entire understanding of the parties solely with respect to the matters covered herein and therein; provided, however, nothing contained in this Agreement or any other Transaction Document shall (or shall be deemed to) (i) have any effect on any agreements any Buyer has entered into with, or any instruments any Buyer has received from, the Company or any of its Subsidiaries prior to the date hereof with respect to any prior investment made by such Buyer in the Company or (ii) waive, alter, modify or amend in any respect any obligations of the Company or any of its Subsidiaries, or any rights of or benefits to any Buyer or any other Person, in any agreement entered into prior to the date hereof between or among the Company and/or any of its Subsidiaries and any Buyer, or any instruments any Buyer received from the Company and/or any of its Subsidiaries prior to the date hereof, and all such agreements and instruments shall continue in full force and effect. Except as specifically set forth herein or therein, neither the Company nor any Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. For clarification purposes, the Recitals are part of this Agreement. No provision of this Agreement may be amended other than by an instrument in writing signed by the Company and the Required Holders (as defined below), and any amendment to any provision of this Agreement made in conformity with the provisions of this Section 9(e) shall be binding on all Buyers and holders of Securities, as applicable; provided that no such amendment shall be effective to the extent that it (A) applies to less than all of the holders of the Securities then outstanding or (B) imposes any obligation or liability on any Buyer without such Buyer's prior written consent (which may be granted or withheld in such Buyer's sole discretion); and provided further that the provisions of Sections 4(y) and 4(z) above cannot be amended or waived without the additional prior written approval of the Collateral Agent or its successor. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party, provided that the Required Holders may waive any provision of this Agreement, and any waiver of any provision of this Agreement made in conformity with the provisions of this Section 9(e) shall be binding on all Buyers and holders of Securities, as applicable, provided that no such waiver shall be effective to the extent that it (1) applies to less than all of the holders of the Securities then outstanding (unless a party gives a waiver as to itself only) or (2) imposes any obligation or liability on any Buyer without such Buyer's prior written consent (which may be granted or withheld in such Buyer's sole discretion). No consideration (other than reimbursement of legal fees) shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same consideration also is offered to all of the parties to the Transaction Documents, all holders of the Notes. From the date hereof and while any Notes are outstanding, the Company shall not be permitted to receive any consideration from a Buyer or a holder of Notes that is not otherwise contemplated by the Transaction Documents in order to, directly or indirectly, induce the Company or any Subsidiary (i) to treat such Buyer or holder of Notes in a manner that is more favorable than to other similarly situated Buyers or holders of Notes, as applicable, or (ii) to treat any Buyer(s) or holder(s) of Notes in a manner that is less favorable than the Buyer or holder of Notes that is paying such consideration; provided, however, that the determination of whether a Buyer has been treated more or less favorably than another Buyer shall disregard any securities of the Company purchased or sold by any Buyer. The Company has not, directly or indirectly, made any agreements with any Buyers relating to the terms or conditions of the transactions contemplated by the Transaction Documents except as set forth in the Transaction Documents. Without limiting the foregoing, the Company confirms that, except as set forth in this Agreement, no Buyer has made any commitment or promise or has any other obligation to provide any financing to the Company, any Subsidiary or otherwise. As a material inducement for each Buyer to enter into this Agreement, the Company expressly acknowledges and agrees that no due diligence or other investigation or inquiry conducted by a Buyer, any of its advisors or any of its representatives shall affect such Buyer's right to rely on, or shall modify or qualify in any manner or be an exception to any of, the Company's representations and warranties contained in this Agreement or any other Transaction Document. "**Required Holders**" means (I) prior to the Initial Closing Date, each Buyer entitled to purchase Initial Notes at the Closing and (II) on or after the Initial Closing Date, holders of a majority of the Registrable Securities as of such time (excluding any Registrable Securities held by the Company or any of its Subsidiaries as of such time) issued or issuable hereunder or pursuant to the Notes (or the Buyers, with respect to any waiver or amendment of Section 4(m); provided, that such majority must include [\*\*\*]).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Notices</u>. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by electronic mail (provided that such sent email is kept on file (whether electronically or otherwise) by the sending party and the sending party does not receive an automatically generated message from the recipient's email server that such e-mail could not be delivered to such recipient); or (iii) one (1) Business Day after deposit with an overnight courier service with next day delivery specified, in each case, properly addressed to the party to receive the same. The mailing addresses and e-mail addresses for such communications shall be:

QumulusAI, Inc.<br> 2146 Roswell Road

Suite 108-851

Marietta, GA 30062<br> Telephone: (770)-315-5837<br> Attention: Chief Executive Officer<br> E-Mail: patrick.gahan@qumulusai.com

With a copy (for informational purposes only) to:

Lucosky Brookman LLP<br> 111 Broadway, Suite 807

New York, New York 10006<br> Telephone: (732) 395-4400 \|<br> Attention: Joseph Lucosky, Esq.<br> E-Mail: jlucosky@lucbro.com

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If to the Transfer Agent:

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, NY 10004-1561<br> Telephone: (212) 847-3260 <br> Attention: Alwyn Burton<br> E-Mail: aburton@continentalstock.com

If to a Buyer, to its mailing address and e-mail address set forth on the Schedule of Buyers, with copies to such Buyer's representatives as set forth on the Schedule of Buyers,

with a copy (for informational purposes only) to:

Kelley Drye & Warren LLP<br> 3 World Trade Center<br> 175 Greenwich Street<br> New York, NY 10007<br> Telephone: (212) 808-7540<br> Attention: Michael A. Adelstein, Esq.<br> E-mail: madelstein@kelleydrye.com

or to such other mailing address and/or e-mail address and/or to the attention of such other Person as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness of such change, provided that Kelley Drye & Warren LLP shall only be provided copies of notices sent to the lead Buyer. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender's e-mail containing the time, date and recipient's e-mail or (C) provided by an overnight courier service shall be rebuttable evidence of personal service, receipt by e-mail or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Successors and Assigns</u>. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, including any purchasers of any of the Notes (other than purchasers of Common Stock in open market transactions). The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Required Holders, including, without limitation, by way of a Fundamental Transaction (unless the Company is in compliance with the applicable provisions governing Fundamental Transactions set forth in the Notes). A Buyer may assign some or all of its rights hereunder in connection with any transfer of any of its Securities without the consent of the Company, in which event such assignee shall be deemed to be a Buyer hereunder with respect to such assigned rights.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>No Third Party Beneficiaries</u>. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, other than the Indemnitees referred to in Section 9(k).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Survival</u>. The representations, warranties, agreements and covenants shall survive the Closing. Each Buyer shall be responsible only for its own representations, warranties, agreements and covenants hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Further Assurances</u>. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>Indemnification</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) In consideration of each Buyer's execution and delivery of the Transaction Documents and acquiring the Securities thereunder and in addition to all of the Company's other obligations under the Transaction Documents, the Company shall defend, protect, indemnify and hold harmless each Buyer and each holder of any Securities and all of their shareholders, partners, members, officers, directors, employees and direct or indirect investors and any of the foregoing Persons' agents or other representatives (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the "**Indemnitees**") from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys' fees and disbursements (the "**Indemnified Liabilities**"), incurred by any Indemnitee as a result of, or arising out of, or relating to (i) any misrepresentation or breach of any representation or warranty made by the Company or any Subsidiary in any of the Transaction Documents, (ii) any breach of any covenant, agreement or obligation of the Company or any Subsidiary contained in any of the Transaction Documents or (iii) any cause of action, suit, proceeding or claim brought or made against such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company or any Subsidiary) or which otherwise involves such Indemnitee that arises out of or results from (A) the execution, delivery, performance or enforcement of any of the Transaction Documents, (B) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of the issuance of the Securities, (C) any disclosure properly made by such Buyer pursuant to Section 4(i), or (D) the status of such Buyer or holder of the Securities either as an investor in the Company pursuant to the transactions contemplated by the Transaction Documents or as a party to this Agreement (including, without limitation, as a party in interest or otherwise in any action or proceeding for injunctive or other equitable relief). To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Promptly after receipt by an Indemnitee under this Section 9(k) of notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving an Indemnified Liability, such Indemnitee shall, if a claim in respect thereof is to be made against the Company under this Section 9(k), deliver to the Company a written notice of the commencement thereof, and the Company shall have the right to participate in, and, to the extent the Company so desires, to assume control of the defense thereof with counsel mutually satisfactory to the Company and the Indemnitee; provided, however, that an Indemnitee shall have the right to retain its own counsel with the fees and expenses of such counsel to be paid by the Company if: (A) the Company has agreed in writing to pay such fees and expenses; (B) the Company shall have failed promptly to assume the defense of such Indemnified Liability and to employ counsel reasonably satisfactory to such Indemnitee in any such Indemnified Liability; or (C) the named parties to any such Indemnified Liability (including any impleaded parties) include both such Indemnitee and the Company, and such Indemnitee shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnitee and the Company (in which case, if such Indemnitee notifies the Company in writing that it elects to employ separate counsel at the expense of the Company, then the Company shall not have the right to assume the defense thereof and such counsel shall be at the expense of the Company), provided further, that in the case of clause (C) above the Company shall not be responsible for the reasonable fees and expenses of more than one (1) separate legal counsel for the Indemnitees. The Indemnitee shall reasonably cooperate with the Company in connection with any negotiation or defense of any such action or Indemnified Liability by the Company and shall furnish to the Company all information reasonably available to the Indemnitee which relates to such action or Indemnified Liability. The Company shall keep the Indemnitee reasonably apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. The Company shall not be liable for any settlement of any action, claim or proceeding effected without its prior written consent, provided, however, that the Company shall not unreasonably withhold, delay or condition its consent. The Company shall not, without the prior written consent of the Indemnitee, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnitee of a release from all liability in respect to such Indemnified Liability or litigation, and such settlement shall not include any admission as to fault on the part of the Indemnitee. Following indemnification as provided for hereunder, the Company shall be subrogated to all rights of the Indemnitee with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The failure to deliver written notice to the Company within a reasonable time of the commencement of any such action shall not relieve the Company of any liability to the Indemnitee under this Section 9(k), except to the extent that the Company is materially and adversely prejudiced in its ability to defend such action.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The indemnification required by this Section 9(k) shall be made by periodic payments of the amount thereof during the course of the investigation or defense, within ten (10) days after bills are received or Indemnified Liabilities are incurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) The indemnity agreement contained herein shall be in addition to (A) any cause of action or similar right of the Indemnitee against the Company or others, and (B) any liabilities the Company may be subject to pursuant to the law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>Construction</u>. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. No specific representation or warranty shall limit the generality or applicability of a more general representation or warranty. Each and every reference to stock prices, shares of Common Stock and any other numbers in this Agreement that relate to the Common Stock shall be automatically adjusted for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions that occur with respect to the Common Stock after the date of this Agreement. Notwithstanding anything in this Agreement to the contrary, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty against, or a prohibition of, any actions with respect to the borrowing of, arrangement to borrow, identification of the availability of, and/or securing of, securities of the Company in order for such Buyer (or its broker or other financial representative) to effect short sales or similar transactions in the future.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) <u>Remedies</u>. Each Buyer and in the event of assignment by Buyer of its rights and obligations hereunder, each holder of Securities, shall have all rights and remedies set forth in the Transaction Documents and all rights and remedies which such holders have been granted at any time under any other agreement or contract and all of the rights which such holders have under any law. Any Person having any rights under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. Furthermore, the Company recognizes that in the event that it or any Subsidiary fails to perform, observe, or discharge any or all of its or such Subsidiary's (as the case may be) obligations under the Transaction Documents, any remedy at law would inadequate relief to the Buyers. The Company therefore agrees that the Buyers shall be entitled to specific performance and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of competent jurisdiction in any such case without the necessity of proving actual damages and without posting a bond or other security. The remedies provided in this Agreement and the other Transaction Documents shall be cumulative and in addition to all other remedies available under this Agreement and the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) <u>Withdrawal Right</u>. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction Documents, whenever any Buyer exercises a right, election, demand or option under a Transaction Document and the Company or any Subsidiary does not timely perform its related obligations within the periods therein provided, then such Buyer may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company or such Subsidiary (as the case may be), any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) <u>Payment Set Aside; Currency</u>. To the extent that the Company makes a payment or payments to any Buyer hereunder or pursuant to any of the other Transaction Documents or any of the Buyers enforce or exercise their rights hereunder or thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, foreign, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred. Unless otherwise expressly indicated, all dollar amounts referred to in this Agreement and the other Transaction Documents are in United States Dollars ("**U.S. Dollars**"), and all amounts owing under this Agreement and all other Transaction Documents shall be paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall be converted into the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. "**Exchange Rate**" means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Agreement, the U.S. Dollar exchange rate as published in the Wall Street Journal on the relevant date of calculation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) <u>Judgment Currency</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) If for the purpose of obtaining or enforcing judgment against the Company in connection with this Agreement or any other Transaction Document in any court in any jurisdiction it becomes necessary to convert into any other currency (such other currency being hereinafter in this Section 9(p) referred to as the "**Judgment Currency**") an amount due in US Dollars under this Agreement, the conversion shall be made at the Exchange Rate prevailing on the Trading Day immediately preceding:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) the date actual payment of the amount due, in the case of any proceeding in the courts of Delaware or in the courts of any other jurisdiction that will give effect to such conversion being made on such date: or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) the date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as of which such conversion is made pursuant to this Section 9(p)(i)(B) being hereinafter referred to as the "**Judgment Conversion Date**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) If in the case of any proceeding in the court of any jurisdiction referred to in Section 9(p)(i)(B) above, there is a change in the Exchange Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable party shall pay such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the Exchange Rate prevailing on the date of payment, will produce the amount of US Dollars which could have been purchased with the amount of Judgment Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion Date.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Any amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being obtained for any other amounts due under or in respect of this Agreement or any other Transaction Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) <u>Independent Nature of Buyers' Obligations and Rights</u>. The obligations of each Buyer under the Transaction Documents are several and not joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the obligations of any other Buyer under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as, and the Company acknowledges that the Buyers do not so constitute, a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption that the Buyers are in any way acting in concert or as a group or entity, and the Company shall not assert any such claim with respect to such obligations or the transactions contemplated by the Transaction Documents or any matters, and the Company acknowledges that the Buyers are not acting in concert or as a group, and the Company shall not assert any such claim, with respect to such obligations or the transactions contemplated by the Transaction Documents. The decision of each Buyer to purchase Securities pursuant to the Transaction Documents has been made by such Buyer independently of any other Buyer. Each Buyer acknowledges that no other Buyer has acted as agent for such Buyer in connection with such Buyer making its investment hereunder and that no other Buyer will be acting as agent of such Buyer in connection with monitoring such Buyer's investment in the Securities or enforcing its rights under the Transaction Documents. The Company and each Buyer confirms that each Buyer has independently participated with the Company and its Subsidiaries in the negotiation of the transaction contemplated hereby with the advice of its own counsel and advisors. Each Buyer shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall not be necessary for any other Buyer to be joined as an additional party in any proceeding for such purpose. The use of a single agreement to effectuate the purchase and sale of the Securities contemplated hereby was solely in the control of the Company, not the action or decision of any Buyer, and was done solely for the convenience of the Company and its Subsidiaries and not because it was required or requested to do so by any Buyer. It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company, each Subsidiary and a Buyer, solely, and not between the Company, its Subsidiaries and the Buyers collectively and not between and among the Buyers.

[*signature pages follow*]

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**IN WITNESS WHEREOF,** each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written above.

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| **COMPANY:**<br>|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **QUMULUSAI, INC.**<br>By:<u> </u><u>/s/ Mike Maniscalco</u><u> </u><br> Name: Mike Maniscalco<br> Title: Chief Executive Officer |

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**IN WITNESS WHEREOF,** each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written above.

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| |
|:---|
| **BUYER:**<br>|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **[\*\*\*]**<br>By: <u>/s/ [\*\*\*]</u><u> </u><br> Name: [\*\*\*]<br> Title: [\*\*\*] |

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**SCHEDULE OF BUYERS**

## Exhibit 10.63

**Exhibit 10.63**

**[PORTIONS HEREIN IDENTIFIED BY [\*\*\*] HAVE BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE THE EXCLUDED INFORMATION IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.]**

**EXECUTION VERSION**

**NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES. ANY TRANSFEREE OF THIS NOTE SHOULD CAREFULLY REVIEW THE TERMS OF THIS NOTE, INCLUDING SECTIONS 3(c)(iii) AND 20(a) HEREOF. THE PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE AND, ACCORDINGLY, THE SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 3(c)(iii) OF THIS NOTE.**

**THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT (**"**OID**"**). PURSUANT TO TREASURY REGULATION** §**1.1275-3(b)(1), PATRICK GAHAN, A REPRESENTATIVE OF THE COMPANY HEREOF WILL, BEGINNING TEN DAYS AFTER THE ISSUANCE DATE OF THIS NOTE, PROMPTLY MAKE AVAILABLE TO THE HOLDER UPON REQUEST THE INFORMATION DESCRIBED IN TREASURY REGULATION** §**1.1275-3(b)(1)(i). PATRICK GAHAN MAY BE REACHED AT TELEPHONE NUMBER (770) 315-5837.**

**QumulusAI, Inc.**

**Senior Secured Convertible Note**

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| | |
|:---|:---|
| Issuance Date: March 26, 2026 | Original Principal Amount: U.S. $15,000,000 |

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**FOR VALUE RECEIVED,** QumulusAI, Inc., a Georgia corporation (the "**Company**"), hereby promises to pay to the order of [\*\*\*] or its registered assigns ("**Holder**") the amount set forth above as the Original Principal Amount (as reduced pursuant to the terms hereof pursuant to redemption, conversion or otherwise, the "**Principal**") when due, whether upon the Maturity Date, on any Installment Date with respect to the Installment Amount due on such Installment Date (each as defined below), or upon acceleration, redemption or otherwise (in each case in accordance with the terms hereof) and to pay interest ("**Interest**") on any outstanding Principal at the applicable Interest Rate (as defined below) from the date set forth above as the Issuance Date (the "**Issuance Date**") until the same becomes due and payable, whether upon the Maturity Date, on any Installment Date with respect to the Installment Amount due on such Installment Date, or upon acceleration, conversion, redemption or otherwise (in each case in accordance with the terms hereof). This Senior Secured Convertible Note (including all Senior Secured Convertible Notes issued in exchange, transfer or replacement hereof, this "**Note**") is one of an issue of Senior Secured Convertible Notes issued pursuant to the Securities Purchase Agreement, dated as of March 26, 2026 (the "**Subscription Date**"), by and among the Company and the investors (the "**Buyers**") referred to therein, as amended from time to time (collectively, the "**Notes**", and such other Senior Secured Convertible Notes, the "**Other Notes**"). Certain capitalized terms used herein are defined in Section 33.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>PAYMENTS OF PRINCIPAL</u>. On each Installment Date, the Company shall pay to the Holder an amount equal to the Installment Amount due on such Installment Date in accordance with Section 8. On the Maturity Date, the Company shall pay to the Holder an amount in cash representing all outstanding Principal, Make-Whole Amount, accrued and unpaid Interest and accrued and unpaid Late Charges (as defined in Section 26(c)) on such Principal, Make-Whole Amount and Interest. Other than as specifically permitted by this Note, the Company may not prepay any portion of the outstanding Principal, Make-Whole Amount, accrued and unpaid Interest or accrued and unpaid Late Charges on Principal, Make-Whole Amount and Interest, if any.

2. <u>INTEREST; INTEREST RATE</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Interest on this Note shall commence accruing on the Issuance Date and shall be computed on the basis of a 360-day year and twelve 30-day months and shall be payable in arrears for on the first calendar day of each Fiscal Quarter (each, an "**Interest Date**") with the first Interest Date being July 1, 2026. Prior to the Public Listing Date, Interest shall automatically compound on each Interest Date by adding the accrued Interest to the then outstanding Principal of this Note ("**Capitalized Interest**). On or after the Public Listing Date, if no Equity Conditions Failure exists as of an Interest Date, Interest shall capitalize on such Interest Date by adding the accrued Interest to the then outstanding Principal of this Note or, at the Company's option, shall be payable in cash ("**Cash Interest**") or in a combination of Cash Interest and Capitalized Interest; provided, that if an Equity Conditions Failure exists as of such Interest Date, unless waived in writing by the Holder, such accrued Interest shall solely be payable as Cash Interest on such applicable Interest Date (unless such Equity Conditions Failure is waived in writing by the Holder). From and after the Public Listing Date, the Company shall deliver a written notice (each, an "**Interest Election Notice**") to each holder of the Notes on or prior to the fifth (5<sup>th</sup>) Trading Day immediately prior to such applicable Interest Date (the date such notice is delivered to all of the holder, the "**Interest Notice Date**") which notice (i) either (A) confirms that Interest to be paid on such Interest Date shall be paid entirely in Capitalized Interest or (B) elects to pay Interest as Cash Interest or a combination of Cash Interest and Capitalized Interest and specifies the amount of Interest that shall be paid as Cash Interest and the amount of Interest, if any, that shall be paid in Capitalized Interest and (ii) certifies that there has been no Equity Conditions Failure. If an Equity Conditions Failure has occurred as of the Interest Notice Date, then unless the Company has elected to pay such Interest as Cash Interest, the Interest Election Notice shall indicate that unless the Holder waives the Equity Conditions Failure, the Interest shall be paid as Cash Interest. Notwithstanding anything herein to the contrary, if no Equity Conditions Failure has occurred as of the Interest Notice Date but an Equity Conditions Failure occurs at any time prior to the Interest Date, (A) the Company shall provide the Holder a subsequent notice to that effect and (B) unless the Holder waives the Equity Conditions Failure, the Interest shall be paid in cash. If the Company elects to pay (or is required to pay) such Interest, in whole or in part, as Cash Interest with respect to an Interest Date, the Company shall pay to the Holder, in cash by wire transfer of immediately available funds, the amount of any such Cash Interest on or prior to such Interest Date.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Prior to the payment of Interest on an Interest Date, Interest on this Note shall accrue at the Interest Rate and be payable by way of inclusion of the Interest in the Conversion Amount on each Conversion Date in accordance with Section 3(b)(i) or upon any redemption in accordance with Section 13 or any required payment upon any Bankruptcy Event of Default. From and after the occurrence and during the continuance of any Event of Default, the Interest Rate in effect with respect to such determination shall automatically be increased to the Default Rate. In the event that such Event of Default is subsequently cured (and no other Event of Default then exists, including, without limitation, for the Company's failure to pay such Interest at the Default Rate on the applicable Interest Date), the adjustment referred to in the preceding sentence shall cease to be effective as of the calendar day immediately following the date of such cure; provided that the Interest as calculated and unpaid at such increased rate during the continuance of such Event of Default shall continue to apply to the extent relating to the days after the occurrence of such Event of Default through and including the date of such cure of such Event of Default.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Special B300 Interest</u>. If the Company provides a guaranty, in whole or in part, of the Permitted B300 Cluster Financing and fails to satisfy the Required B300 Ratio Test (as defined below) by the Permitted B300 Initial Shipping Date (in each case, as defined in the definition of Permitted B300 Cluster Financing below), at 9:00AM, New York city time on the Trading Day immediately following the Permitted B300 Initial Shipping Date, this Note shall accrue a one-time special interest payment equal to 5% of the then outstanding Principal of this Note, which shall be compound on such date and increase the Principal of this Note then outstanding on a dollar-for-dollar basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>CONVERSION OF NOTES</u>. At any time after the Issuance Date, this Note shall be convertible into validly issued, fully paid and non-assessable shares of Common Stock (as defined below), on the terms and conditions set forth in this Section 3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Conversion Right</u>. Subject to the provisions of Section 3(d), at any time or times on or after the Issuance Date, the Holder shall be entitled to convert any portion of the outstanding and unpaid Conversion Amount (as defined below) into validly issued, fully paid and non-assessable shares of Common Stock in accordance with Section 3(c), at the Conversion Rate (as defined below). The Company shall not issue any fraction of a share of Common Stock upon any conversion. If the issuance would result in the issuance of a fraction of a share of Common Stock, in lieu thereof, on or prior to such Conversion Date (as defined below) with respect thereto, the Company shall pay to the Holder an amount in cash equal to the balance of the Conversion Amount. The Company shall pay any and all transfer, stamp, issuance and similar taxes, costs and expenses (including, without limitation, fees and expenses of the Transfer Agent (as defined below)) that may be payable with respect to the issuance and delivery of Common Stock upon conversion of any Conversion Amount.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Conversion Rate</u>. The number of shares of Common Stock issuable upon conversion of any Conversion Amount pursuant to Section 3(a) shall be determined by dividing (x) such Conversion Amount by (y) the Conversion Price (the "**Conversion Rate**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) "**Conversion Amount**" means the sum of (A) such portion of the Principal of this Note to be converted, redeemed or otherwise with respect to which this determination is being made, (B) accrued and unpaid Interest with respect to such Principal of this Note, (C) the Make-Whole Amount, if any, (D) accrued and unpaid Late Charges with respect to such Principal of this Note, Make-Whole Amount and Interest, and (E) any other unpaid amounts pursuant to the Transaction Documents (as defined in the Securities Purchase Agreement), if any.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) "**Conversion Price**" means, as of any Conversion Date or other date of determination, $11.50, subject to adjustment as provided herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Mechanics of Conversion</u>.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Optional Conversion</u>. To convert any Conversion Amount into shares of Common Stock on any date (a "**Conversion Date**"), the Holder shall deliver (whether via electronic mail or otherwise), for receipt on or prior to 11:59 p.m., New York time, on such date, a copy of an executed notice of conversion in the form attached hereto as <u>Exhibit I</u> (each, a "**Conversion Notice**") to the Company. If required by Section 3(c)(iii), within one (1) Trading Day following a conversion of this Note as aforesaid, the Holder shall surrender this Note to a nationally recognized overnight delivery service for delivery to the Company (or an indemnification undertaking with respect to this Note in the case of its loss, theft or destruction as contemplated by Section 20(b)). On the date of receipt of a Conversion Notice, the Company shall transmit by electronic mail an acknowledgment, in the form attached hereto as <u>Exhibit II</u>, of confirmation of receipt of such Conversion Notice and representation as to whether such shares of Common Stock may then be resold pursuant to Rule 144 or an effective and available registration statement (each, an "**Acknowledgement**") to the Holder and the Company's transfer agent (the "**Transfer Agent**") which confirmation shall constitute an instruction to the Transfer Agent to process such Conversion Notice in accordance with the terms herein. On or before the first (1st) Trading Day following the date on which the Company has received a Conversion Notice (or such earlier date as required pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement of a trade initiated on the applicable Conversion Date of such shares of Common Stock issuable pursuant to such Conversion Notice) (the "**Share Delivery Deadline**"), the Company shall (1) provided that the Transfer Agent is participating in The Depository Trust Company's ("**DTC**") Fast Automated Securities Transfer Program ("**FAST**"), credit such aggregate number of shares of Common Stock to which the Holder shall be entitled pursuant to such conversion to the Holder's or its designee's balance account with DTC through its Deposit/Withdrawal at Custodian system or (2) if the Transfer Agent is not participating in FAST, upon the request of the Holder, issue and deliver (via reputable overnight courier) to the address as specified in the Conversion Notice, a certificate, registered in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder shall be entitled pursuant to such conversion. If this Note is physically surrendered for conversion pursuant to Section 3(c)(iii) and the outstanding Principal of this Note is greater than the Principal portion of the Conversion Amount being converted, then the Company shall as soon as practicable and in no event later than one (1) Business Day after receipt of this Note and at its own expense, issue and deliver to the Holder (or its designee) a new Note (in accordance with Section 20(d)) representing the outstanding Principal not converted; provided, that during such period the Holder shall be permitted to convert such new Note regardless of the date the actual certificate evidencing such new Note is delivered to the Holder (or its designee). The Person or Persons entitled to receive the shares of Common Stock (the "**Conversion Shares**") issuable upon a conversion of this Note shall be treated for all purposes as the record holder or holders of such Conversion Shares on the Conversion Date; provided, that the Holder shall be deemed to have waived any voting rights of any such Conversion Shares during the period commencing on such Conversion Date, through, and including, such applicable Share Delivery Deadline (each, a "**Conversion Period**"), as necessary, such that the aggregate voting rights of any shares of Common Stock (including such Conversion Shares) beneficially owned by the Holder and/or any Attribution Parties, collectively, on any such date of determination shall not exceed the Maximum Percentage (as defined below) as a result of any such conversion of this Note. In the event of a partial conversion of this Note pursuant hereto (or any Acceleration or Alternate Conversion, as applicable), the Principal amount converted shall be deducted from the Installment Amount(s) relating to last Installment Date(s) as set forth in the applicable Conversion Notice. Notwithstanding anything to the contrary contained in this Note or the Registration Rights Agreement, after the effective date of the Registration Statement (as defined in the Registration Rights Agreement) and prior to the Holder's receipt of the notice of a Grace Period (as defined in the Registration Rights Agreement), the Company shall cause the Transfer Agent to deliver unlegended shares of Common Stock to the Holder (or its designee) in connection with any sale of Registrable Securities (as defined in the Registration Rights Agreement) with respect to which the Holder has entered into a contract for sale, and delivered a copy of the prospectus included as part of the particular Registration Statement to the extent applicable, and for which the Holder has not yet settled.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Company'</u><u>s Failure to Timely Convert</u>. If the Company shall fail, for any reason or for no reason, on or prior to the applicable Share Delivery Deadline, either (I) if the Transfer Agent is not participating in FAST, to issue and deliver to the Holder (or its designee) a certificate for the number of shares of Common Stock to which the Holder is entitled and register such shares of Common Stock on the Company's share register or, if the Transfer Agent is participating in FAST, to credit the balance account of the Holder or the Holder's designee with DTC for such number of shares of Common Stock to which the Holder is entitled upon the Holder's conversion of this Note (as the case may be) or (II) if the Registration Statement covering the resale of the shares of Common Stock that are the subject of the Conversion Notice (the "**Unavailable Conversion Shares**") is not available for the resale of such Unavailable Conversion Shares and the Company fails to promptly, but in no event later than as required pursuant to the Registration Rights Agreement (x) so notify the Holder and (y) deliver the shares of Common Stock electronically without any restrictive legend by crediting such aggregate number of shares of Common Stock to which the Holder is entitled pursuant to such conversion to the Holder's or its designee's balance account with DTC through its Deposit/Withdrawal At Custodian system (the event described in the immediately foregoing clause (II) is hereinafter referred as a "**Notice Failure**" and together with the event described in clause (I) above, a "**Conversion Failure**"), then, in addition to all other remedies available to the Holder, (1) the Company shall pay in cash to the Holder on each day after such Share Delivery Deadline that the issuance of such shares of Common Stock is not timely effected an amount equal to 2% of the product of (A) the sum of the number of shares of Common Stock not issued to the Holder on or prior to the Share Delivery Deadline and to which the Holder is entitled, multiplied by (B) any trading price of the Common Stock selected by the Holder in writing as in effect at any time during the period beginning on the applicable Conversion Date and ending on the applicable Share Delivery Deadline and (2) the Holder, upon written notice to the Company, may void its Conversion Notice with respect to, and retain or have returned (as the case may be) any portion of this Note that has not been converted pursuant to such Conversion Notice, provided that the voiding of a Conversion Notice shall not affect the Company's obligations to make any payments which have accrued prior to the date of such notice pursuant to this Section 3(c)(ii) or otherwise. In addition to the foregoing, if on or prior to the Share Delivery Deadline either (A) if the Transfer Agent is not participating in FAST, the Company shall fail to issue and deliver to the Holder (or its designee) a certificate and register such shares of Common Stock on the Company's share register or, if the Transfer Agent is participating in FAST, the Transfer Agent shall fail to credit the balance account of the Holder or the Holder's designee with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder's conversion hereunder or pursuant to the Company's obligation pursuant to clause (II) below or (B) a Notice Failure occurs, and if on or after such Share Delivery Deadline the Holder acquires (in an open market transaction, stock loan or otherwise) shares of Common Stock corresponding to all or any portion of the number of shares of Common Stock issuable upon such conversion that the Holder is entitled to receive from the Company and has not received from the Company in connection with such Conversion Failure or Notice Failure, as applicable (a "**Buy-In**"), then, in addition to all other remedies available to the Holder, the Company shall, within one (1) Business Day after receipt of the Holder's request and in the Holder's discretion, either: (I) pay cash to the Holder in an amount equal to the Holder's total purchase price (including brokerage commissions, stock loan costs and other out-of-pocket expenses, if any) for the shares of Common Stock so acquired (including, without limitation, by any other Person in respect, or on behalf, of the Holder) (the "**Buy-In Price**"), at which point the Company's obligation to so issue and deliver such certificate (and to issue such shares of Common Stock) or credit the balance account of such Holder or such Holder's designee, as applicable, with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder's conversion hereunder (as the case may be) (and to issue such shares of Common Stock) shall terminate, or (II) promptly honor its obligation to so issue and deliver to the Holder a certificate or certificates representing such shares of Common Stock or credit the balance account of such Holder or such Holder's designee, as applicable, with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder's conversion hereunder (as the case may be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (x) such number of shares of Common Stock multiplied by (y) the lowest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date of the applicable Conversion Notice and ending on the date of such issuance and payment under this clause (II) (the "**Buy-In Payment Amount**"). Nothing shall limit the Holder's right to pursue any other remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company's failure to timely deliver certificates representing shares of Common Stock (or to electronically deliver such shares of Common Stock) upon the conversion of this Note as required pursuant to the terms hereof.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>Registration; Book-Entry</u>. The Company shall maintain a register (the "**Register**") for the recordation of the names and addresses of the holders of each Note and the principal amount of the Notes held by such holders (the "**Registered Notes**"). The entries in the Register shall be conclusive and binding for all purposes absent manifest error. The Company and the holders of the Notes shall treat each Person whose name is recorded in the Register as the owner of a Note for all purposes (including, without limitation, the right to receive payments of Principal, Make-Whole Amount and Interest hereunder) notwithstanding notice to the contrary. A Registered Note may be assigned, transferred or sold in whole or in part only by registration of such assignment or sale on the Register. Upon its receipt of a written request to assign, transfer or sell all or part of any Registered Note by the holder thereof, the Company shall record the information contained therein in the Register and issue one or more new Registered Notes in the same aggregate principal amount as the principal amount of the surrendered Registered Note to the designated assignee or transferee pursuant to Section 20, provided that if the Company does not so record an assignment, transfer or sale (as the case may be) of all or part of any Registered Note within one (1) Business Day of such a request, then the Register shall be automatically deemed updated to reflect such assignment, transfer or sale (as the case may be). Notwithstanding anything to the contrary set forth in this Section 3, following conversion of any portion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Company unless (A) the full Conversion Amount represented by this Note is being converted (in which event this Note shall be delivered to the Company following conversion thereof as contemplated by Section 3(c)(i)) or (B) the Holder has provided the Company with prior written notice (which notice may be included in a Conversion Notice) requesting reissuance of this Note upon physical surrender of this Note. The Holder and the Company shall maintain records showing the Principal, Make-Whole Amount, Interest and Late Charges converted and/or paid (as the case may be) and the dates of such conversions, and/or payments (as the case may be) or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this Note upon conversion. If the Company does not update the Register to record such Principal, Make-Whole Amount, Interest and Late Charges converted and/or paid (as the case may be) and the dates of such conversions and/or payments (as the case may be) within one (1) Business Day of such occurrence, then the Register shall be automatically deemed updated to reflect such occurrence.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>Pro Rata Conversion; Disputes</u>. In the event that the Company receives a Conversion Notice from more than one holder of Notes for the same Conversion Date and the Company can convert some, but not all, of such portions of the Notes submitted for conversion, the Company, subject to Section 3(d), shall convert from each holder of Notes electing to have Notes converted on such date a pro rata amount of such holder's portion of its Notes submitted for conversion based on the principal amount of Notes submitted for conversion on such date by such holder relative to the aggregate principal amount of all Notes submitted for conversion on such date. In the event of a dispute as to the number of shares of Common Stock issuable to the Holder in connection with a conversion of this Note, the Company shall issue to the Holder the number of shares of Common Stock not in dispute and resolve such dispute in accordance with Section 25.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Limitations on Conversions</u>. The Company shall not effect the conversion of any portion of this Note, and the Holder shall not have the right to convert any portion of this Note pursuant to the terms and conditions of this Note and any such conversion shall be null and void and treated as if never made, to the extent that after giving effect to such conversion, the Holder together with the other Attribution Parties collectively would beneficially own in excess of 4.99% (the "**Maximum Percentage**") of the shares of Common Stock outstanding immediately after giving effect to such conversion. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by the Holder and the other Attribution Parties shall include the number of shares of Common Stock held by the Holder and all other Attribution Parties plus the number of shares of Common Stock issuable upon conversion of this Note with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock which would be issuable upon (A) conversion of the remaining, nonconverted portion of this Note beneficially owned by the Holder or any of the other Attribution Parties and (B) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any convertible notes or convertible preferred stock or warrants) beneficially owned by the Holder or any other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained in this Section 3(d). For purposes of this Section 3(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the 1934 Act. For purposes of determining the number of outstanding shares of Common Stock the Holder may acquire upon the conversion of this Note without exceeding the Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company's most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the SEC, as the case may be, (y) a more recent public announcement by the Company or (z) any other written notice by the Company or the Transfer Agent, if any, setting forth the number of shares of Common Stock outstanding (the "**Reported Outstanding Share Number**"). If the Company receives a Conversion Notice from the Holder at a time when the actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company shall notify the Holder in writing of the number of shares of Common Stock then outstanding and, to the extent that such Conversion Notice would otherwise cause the Holder's beneficial ownership, as determined pursuant to this Section 3(d), to exceed the Maximum Percentage, the Holder must notify the Company of a reduced number of shares of Common Stock to be purchased pursuant to such Conversion Notice. For any reason at any time, upon the written or oral request of the Holder, the Company shall within one (1) Business Day confirm orally and in writing or by electronic mail to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Note, by the Holder and any other Attribution Party since the date as of which the Reported Outstanding Share Number was reported. In the event that the issuance of shares of Common Stock to the Holder upon conversion of this Note results in the Holder and the other Attribution Parties being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section 13(d) of the 1934 Act), the number of shares so issued by which the Holder's and the other Attribution Parties' aggregate beneficial ownership exceeds the Maximum Percentage (the "**Excess Shares**") shall be deemed null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer the Excess Shares. Upon delivery of a written notice to the Company, the Holder may from time to time increase (with such increase not effective until the sixty-first (61<sup>st</sup>) day after delivery of such notice) or decrease the Maximum Percentage to any other percentage not in excess of 9.99% as specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the sixty-first (61<sup>st</sup>) day after such notice is delivered to the Company and (ii) any such increase or decrease will apply only to the Holder and the other Attribution Parties and not to any other holder of Notes that is not an Attribution Party of the Holder. For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this Note in excess of the Maximum Percentage shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior inability to convert this Note pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of convertibility. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 3(d) to the extent necessary to correct this paragraph (or any portion of this paragraph) which may be defective or inconsistent with the intended beneficial ownership limitation contained in this Section 3(d) or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitation contained in this paragraph may not be amended, modified or waived and shall apply to a successor holder of this Note.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Right of Alternate Conversion Upon an Event of Default</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>General</u>. Subject to Section 3(d), at any time during any Event of Default Redemption Right Period (as defined below) (regardless of whether such Event of Default has been cured, or if the Company has delivered an Event of Default Redemption Notice to the Holder or if the Holder has delivered an Event of Default Redemption Notice to the Company or otherwise notified the Company that an Event of Default has occurred), the Holder may, at the Holder's option, convert (each, an "**Alternate Conversion**", and the date of such Alternate Conversion, each, an "**Alternate Conversion Date**") all, or any part of, the Conversion Amount (such portion of the Conversion Amount subject to such Alternate Conversion, the "**Alternate Conversion Amount**") into shares of Common Stock at a conversion rate equal to the quotient of (x) the product of (A) the Redemption Premium and (B) the Alternate Conversion Amount, divided by (y) the Alternate Conversion Price (the "**Alternate Conversion Rate**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Mechanics of Alternate Conversion</u>. On any Alternate Conversion Date, the Holder may voluntarily convert any Alternate Conversion Amount pursuant to Section 3(c) at the Alternate Conversion Rate (for the avoidance of doubt, with "Alternate Conversion Price" replacing "Conversion Price" for all purposes hereunder with respect to such Alternate Conversion and, with "Redemption Premium of the Conversion Amount" replacing "Conversion Amount" in clause (x) of the definition of Conversion Rate above with respect to such Alternate Conversion) by designating in the Conversion Notice delivered pursuant to this Section 3(e) of this Note that the Holder is electing to use the Alternate Conversion Price for such conversion. Notwithstanding anything to the contrary in this Section 3(e), but subject to Section 3(d), until the Company delivers shares of Common Stock representing the applicable Alternate Conversion Amount to the Holder, such Alternate Conversion Amount may be converted by the Holder into shares of Common Stock pursuant to Section 3(c) without regard to this Section 3(e). In the event of an Alternate Conversion pursuant to this Section 3(e) of all, or any portion, of this Note, the Holder's damages would be uncertain and difficult to estimate because of the parties' inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for the Holder. Accordingly, any redemption premium due under this Section 3(e), together the Alternate Conversion Price used in such Alternate Conversion, as applicable, is intended by the parties to be, and shall be deemed, a reasonable estimate of, the Holder's actual loss of its investment opportunity and not as a penalty.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>RIGHTS UPON EVENT OF DEFAULT</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Event of Default</u>. Each of the following events shall constitute an "**Event of Default**" and each of the events in clauses (ix), (x) and (xi) shall constitute a "**Bankruptcy Event of Default**":

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the failure of the applicable Registration Statement (as defined in the Registration Rights Agreement) to be filed with the SEC on or prior to the date that is five (5) days after the applicable Filing Deadline (as defined in the Registration Rights Agreement);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) while the applicable Registration Statement is required to be maintained effective pursuant to the terms of the Registration Rights Agreement, the effectiveness of the applicable Registration Statement lapses for any reason (including, without limitation, the issuance of a stop order) or such Registration Statement (or the prospectus contained therein) is unavailable to any holder of Registrable Securities (as defined in the Registration Rights Agreement) for sale of all of such holder's Registrable Securities in accordance with the terms of the Registration Rights Agreement, and such lapse or unavailability continues for a period of ten (10) consecutive days or for more than an aggregate of twenty (20) days in any 365-day period (excluding days during an Allowable Grace Period (as defined in the Registration Rights Agreement));

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the suspension (or threatened suspension) from trading or the failure (or threatened failure) of the Common Stock to be trading or listed (as applicable) on an Eligible Market for a period of five (5) consecutive Trading Days;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the Company's (A) failure to cure a Conversion Failure by delivery of the required number of shares of Common Stock within five (5) Trading Days after the applicable Conversion Date or (B) notice, written or oral, to any holder of the Notes, including, without limitation, by way of public announcement or through any of its agents, at any time, of its intention not to comply, as required, with a request for conversion of any Notes into shares of Common Stock that is requested in accordance with the provisions of the Notes, other than pursuant to Section 3(d);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) except to the extent the Company is in compliance with Section 11(b) below, at any time following the fifteen (15<sup>th</sup>) consecutive day that the Holder's Authorized Share Allocation (as defined in Section 11(a) below) is less than the number of shares of Common Stock that the Holder would be entitled to receive upon a conversion of the full Conversion Amount of this Note (without regard to any limitations on conversion set forth in Section 3(d) or otherwise),;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) the Company's failure to pay to the Holder any amount of Principal, Make-Whole Amount, Interest, Late Charges or other amounts when and as due under this Note (including, without limitation, the Company's failure to pay any redemption payments or amounts hereunder) or any other Transaction Document (as defined in the Securities Purchase Agreement) or any other agreement, document, certificate or other instrument delivered in connection with the transactions contemplated hereby and thereby, except, in the case of a failure to pay Interest and Late Charges when and as due, in which case only if such failure remains uncured for a period of at least five (5) Trading Days;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) the Company fails to remove any restrictive legend on any certificate or any shares of Common Stock issued to the Holder upon conversion of any Securities (as defined in the Securities Purchase Agreement) acquired by the Holder under the Securities Purchase Agreement (including this Note) as and when required by such Securities or the Securities Purchase Agreement, unless otherwise then prohibited by applicable federal securities laws, and any such failure remains uncured for at least five (5) days;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) the occurrence of any default under, redemption of or acceleration prior to maturity of at least an aggregate of $1,000,000 (or, solely with respect to Permitted GPU Indebtedness, $40,000,000) of Indebtedness (as defined in the Securities Purchase Agreement) of the Company or any of its Subsidiaries, other than with respect to any Other Notes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors shall be instituted by or against the Company or any Material Subsidiary and, if instituted against the Company or any Material Subsidiary by a third party, shall not be dismissed within thirty (30) days of their initiation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) the commencement by the Company or any Material Subsidiary of a voluntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree, order, judgment or other similar document in respect of the Company or any Material Subsidiary in an involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable federal, state or foreign law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or any Material Subsidiary or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the execution of a composition of debts, or the occurrence of any other similar federal, state or foreign proceeding, or the admission by it in writing of its inability to pay its debts generally as they become due, the taking of corporate action by the Company or any Material Subsidiary in furtherance of any such action or the taking of any action by any Person to commence a Uniform Commercial Code foreclosure sale or any other similar action under federal, state or foreign law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) the entry by a court of (i) a decree, order, judgment or other similar document in respect of the Company or any Material Subsidiary of a voluntary or involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or (ii) a decree, order, judgment or other similar document adjudging the Company or any Material Subsidiary as bankrupt or insolvent, or approving as properly filed a petition seeking liquidation, reorganization, arrangement, adjustment or composition of or in respect of the Company or any Material Subsidiary under any applicable federal, state or foreign law or (iii) a decree, order, judgment or other similar document appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or any Material Subsidiary or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree, order, judgment or other similar document or any such other decree, order, judgment or other similar document unstayed and in effect for a period of forty-five (45) consecutive days;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) a final judgment or judgments for the payment of money aggregating in excess of $1,000,000 (or, solely with respect to Permitted GPU Indebtedness, $40,000,000) are rendered against the Company and/or any of its Subsidiaries and which judgments are not, within thirty (30) days after the entry thereof, bonded, discharged, settled or stayed pending appeal, or are not discharged within thirty (30) days after the expiration of such stay; provided, however, any judgment which is covered by insurance or an indemnity from a credit worthy party shall not be included in calculating the $1,000,000 (or, solely with respect to Permitted GPU Indebtedness, $40,000,000) amount set forth above so long as the Company provides the Holder a written statement from such insurer or indemnity provider (which written statement shall be reasonably satisfactory to the Holder) to the effect that such judgment is covered by insurance or an indemnity and the Company or such Subsidiary (as the case may be) will receive the proceeds of such insurance or indemnity within forty-five (45) days of the issuance of such judgment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) the Company and/or any Subsidiary, individually or in the aggregate, either (i) fails to pay, when due, or within any applicable grace period, any payment with respect to any Indebtedness in excess of $1,000,000 (or, solely with respect to Permitted GPU Indebtedness, $40,000,000) due to any third party (other than, with respect to unsecured Indebtedness only, payments contested by the Company and/or such Subsidiary (as the case may be) in good faith by proper proceedings and with respect to which adequate reserves have been set aside for the payment thereof in accordance with GAAP) or is otherwise in breach or violation of any agreement for monies owed or owing in an amount in excess of $1,000,000 (or, solely with respect to Permitted GPU Indebtedness, $40,000,000), which breach or violation permits the other party thereto to declare a default or otherwise accelerate amounts due thereunder, or (ii) suffer to exist any other circumstance or event that would, with or without the passage of time or the giving of notice, result in a default or event of default under any agreement binding the Company or any Subsidiary, which default or event of default would or is likely to have a material adverse effect on the business, assets, operations (including results thereof), liabilities, properties, condition (including financial condition) or prospects of the Company or any of its Subsidiaries, individually or in the aggregate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) other than as specifically set forth in another clause of this Section 4(a), the Company or any Material Subsidiary breaches any representation or warranty, in any material respect (other than representations or warranties subject to material adverse effect or materiality, which may not be breached in any respect) or any covenant or other term or condition of any Transaction Document, except, in the case of a breach of a covenant or other term or condition that is curable, only if such breach remains uncured for a period of five (5) consecutive Trading Days;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xv) a false or inaccurate certification (including a false or inaccurate deemed certification) by the Company that either (A) the Equity Conditions are satisfied, (B) there has been no Equity Conditions Failure, or (C) as to whether any Event of Default has occurred;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvi) Public Listing Date fails to occur on or prior to September 26, 2026 (or such later date as the Company and the Holder shall agree in writing);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvii) any breach or failure in any respect by the Company or any Subsidiary to comply with any provision of Section 15 of this Note;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xviii) any Material Adverse Effect (as defined in the Securities Purchase Agreement) occurs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xix) any provision of any Transaction Document (including, without limitation, the Security Documents (as defined in the Securities Purchase Agreement) shall at any time for any reason (other than pursuant to the express terms thereof) cease to be valid and binding on or enforceable against the parties thereto, or the validity or enforceability thereof shall be contested by any party thereto, or a proceeding shall be commenced by the Company or any Subsidiary or any governmental authority having jurisdiction over any of them, seeking to establish the invalidity or unenforceability thereof, or the Company shall deny in writing that it has any liability or obligation purported to be created under any Transaction Document (including, without limitation, the Security 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xx) any Security Document shall for any reason fail or cease to create a separate valid and perfected and, except to the extent permitted by the terms hereof or thereof, first priority Lien (as defined in the Securities Purchase Agreement) on the Collateral (as defined in the Security Documents) in favor of the Collateral Agent (as defined in the Securities Purchase Agreement) or any material provision of any Security Document shall at any time for any reason cease to be valid and binding on or enforceable against the Company or the validity or enforceability thereof shall be contested by any party thereto, or a proceeding shall be commenced by the Company or any governmental authority having jurisdiction over the Company, seeking to establish the invalidity or unenforceability thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxi) any material damage to, or loss, theft or destruction of, any Collateral, whether or not insured, or any strike, lockout, labor dispute, embargo, condemnation, act of God or public enemy, or other casualty which causes, for more than fifteen (15) consecutive days, the cessation or substantial curtailment of revenue producing activities at any facility of the Company or any Material Subsidiary, if any such event or circumstance could have a Material Adverse Effect; or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxii) any Event of Default (as defined in the Other Notes) occurs with respect to any Other Notes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Notice of an Event of Default; Redemption Right</u>. Upon the occurrence of an Event of Default with respect to this Note or any Other Note, the Company shall within three (3) Business Days deliver written notice thereof via electronic mail and overnight courier (with next day delivery specified) (an "**Event of Default Notice**") to the Holder. At any time after the earlier of the Holder's receipt of an Event of Default Notice and the Holder becoming aware of an Event of Default (such earlier date, the "**Event of Default Right Commencement Date**") and ending (such ending date, the "**Event of Default Right Expiration Date**", and each such period, an "**Event of Default Redemption Right Period**") on the later of (x) the second (2<sup>nd</sup>) Trading Day after the date such Event of Default is cured and (y) the twentieth (20<sup>th</sup>) Trading Day after the Holder's receipt of an Event of Default Notice that includes (I) a reasonable description of the applicable Event of Default, (II) a certification as to whether, in the opinion of the Company, such Event of Default is capable of being cured and, if applicable, a reasonable description of any existing plans of the Company to cure such Event of Default and (III) a certification as to the date the Event of Default occurred and, if cured on or prior to the date of such Event of Default Notice, the applicable Event of Default Right Expiration Date, the Holder may require the Company to redeem (regardless of whether such Event of Default has been cured on or prior to the Event of Default Right Expiration Date) all or any portion of this Note by delivering written notice thereof (the "**Event of Default Redemption Notice**") to the Company, which Event of Default Redemption Notice shall indicate the portion of this Note the Holder is electing to redeem. Each portion of this Note subject to redemption by the Company pursuant to this Section 4(b) shall be redeemed by the Company at a price equal to the greater of (i) solely if an Equity Failure Triggering Event has occurred and is continuing, the product of (A) the Conversion Amount to be redeemed multiplied by (B) the Redemption Premium and (ii) the product of (X) the quotient of (a) the Conversion Amount to be redeemed divided by (b) the Alternate Conversion Price then in effect at such time as the Holder delivers an Event of Default Redemption Notice multiplied by (Y) the product of (1) the Redemption Premium multiplied by (2) the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date immediately preceding such Event of Default and ending on the date the Company makes the entire payment required to be made under this Section 4(b) (the "**Event of Default Redemption Price**"). Redemptions required by this Section 4(b) shall be made in accordance with the provisions of Section 13. To the extent redemptions required by this Section 4(b) are deemed or determined by a court of competent jurisdiction to be prepayments of this Note by the Company, such redemptions shall be deemed to be voluntary prepayments. Notwithstanding anything to the contrary in this Section 3(e), but subject to Section 3(d), until the Event of Default Redemption Price (together with any Late Charges thereon) is paid in full, the Conversion Amount submitted for redemption under this Section 4(b) (together with any Late Charges thereon) may be converted, in whole or in part, by the Holder into Common Stock pursuant to the terms of this Note. In the event of a partial redemption of this Note pursuant hereto, the Principal amount redeemed shall be deducted from the Installment Amount(s) relating to the applicable Installment Date(s) as set forth in the Event of Default Redemption Notice. In the event of the Company's redemption of any portion of this Note under this Section 4(b), the Holder's damages would be uncertain and difficult to estimate because of the parties' inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for the Holder. Accordingly, any redemption premium due under this Section 4(b) is intended by the parties to be, and shall be deemed, a reasonable estimate of the Holder's actual loss of its investment opportunity and not as a penalty. Any redemption upon an Event of Default shall not constitute an election of remedies by the Holder, and all other rights and remedies of the Holder shall be preserved.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Mandatory Redemption upon Bankruptcy Event of Default</u>. Notwithstanding anything to the contrary herein, and notwithstanding any conversion that is then required or in process, upon any Bankruptcy Event of Default, whether occurring prior to or following the Maturity Date, the Company shall immediately pay to the Holder an amount in cash representing (i) all outstanding Principal, Make-Whole Amount, accrued and unpaid Interest and accrued and unpaid Late Charges on such Principal, Make-Whole Amount and Interest, multiplied by (ii) the Redemption Premium, in addition to any and all other amounts due hereunder, without the requirement for any notice or demand or other action by the Holder or any other person or entity, provided that the Holder may, in its sole discretion, waive such right to receive payment upon a Bankruptcy Event of Default, in whole or in part, and any such waiver shall not affect any other rights of the Holder hereunder, including any other rights in respect of such Bankruptcy Event of Default, any right to conversion, and any right to payment of the Event of Default Redemption Price or any other Redemption Price, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>RIGHTS UPON FUNDAMENTAL TRANSACTION</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Assumption</u>. The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity assumes in writing all of the obligations of the Company under this Note and the other Transaction Documents in accordance with the provisions of this Section 5(a) pursuant to written agreements in form and substance satisfactory to the Holder and approved by the Holder prior to such Fundamental Transaction, including agreements to deliver to each holder of Notes in exchange for such Notes a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to the Notes, including, without limitation, having a principal amount and interest rate equal to the principal amounts then outstanding and the interest rates of the Notes held by such holder, having similar conversion rights as the Notes and having similar ranking and security to the Notes, and satisfactory to the Holder and (ii) the Successor Entity (including its Parent Entity) is a publicly traded corporation whose common stock is quoted on or listed for trading on an Eligible Market. Upon the occurrence of any Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Note and the other Transaction Documents referring to the "Company" shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Note and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation of a Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon conversion or redemption of this Note at any time after the consummation of such Fundamental Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections 6 and 17, which shall continue to be receivable thereafter)) issuable upon the conversion or redemption of the Notes prior to such Fundamental Transaction, such shares of the publicly traded common stock (or their equivalent) of the Successor Entity (including its Parent Entity) which the Holder would have been entitled to receive upon the happening of such Fundamental Transaction had this Note been converted immediately prior to such Fundamental Transaction (without regard to any limitations on the conversion of this Note), as adjusted in accordance with the provisions of this Note. Notwithstanding the foregoing, the Holder may elect, at its sole option, by delivery of written notice to the Company to waive this Section 5(a) to permit the Fundamental Transaction without the assumption of this Note. The provisions of this Section 5 shall apply similarly and equally to successive Fundamental Transactions and shall be applied without regard to any limitations on the conversion of this Note.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Notice of a Change of Control; Redemption Right</u>. No sooner than twenty (20) Trading Days nor later than ten (10) Trading Days prior to the consummation of a Change of Control (the "**Change of Control Date**"), but not prior to the public announcement of such Change of Control, the Company shall deliver written notice thereof via electronic mail and overnight courier to the Holder (a "**Change of Control Notice**"). At any time during the period beginning after the Holder's receipt of a Change of Control Notice or the Holder becoming aware of a Change of Control if a Change of Control Notice is not delivered to the Holder in accordance with the immediately preceding sentence (as applicable) and ending on twenty (20) Trading Days after the later of (A) the date of consummation of such Change of Control or (B) the date of receipt of such Change of Control Notice or (C) the date of the announcement of such Change of Control, the Holder may require the Company to redeem all or any portion of this Note by delivering written notice thereof ("**Change of Control Redemption Notice**") to the Company, which Change of Control Redemption Notice shall indicate the Conversion Amount the Holder is electing to redeem. The portion of this Note subject to redemption pursuant to this Section 5 shall be redeemed by the Company in cash at a price equal to the greatest of (i) the Conversion Amount being redeemed, (ii) solely if an Equity Failure Triggering Event has occurred and is continuing, the product of (A) the Conversion Amount being redeemed multiplied by (B) the quotient determined by dividing (I) the greatest Closing Sale Price of the shares of Common Stock during the period beginning on the date immediately preceding the earlier to occur of (1) the consummation of the applicable Change of Control and (2) the public announcement of such Change of Control and ending on the date the Holder delivers the Change of Control Redemption Notice by (II) the Alternate Conversion Price then in effect and (iii) solely if an Equity Failure Triggering Event has occurred and is continuing, the product of (A) the Conversion Amount being redeemed multiplied by (B) the quotient of (I) the aggregate cash consideration and the aggregate cash value of any non-cash consideration per share of Common Stock to be paid to the holders of the shares of Common Stock upon consummation of such Change of Control (any such non-cash consideration constituting publicly-traded securities shall be valued at the highest of the Closing Sale Price of such securities as of the Trading Day immediately prior to the consummation of such Change of Control, the Closing Sale Price of such securities on the Trading Day immediately following the public announcement of such proposed Change of Control and the Closing Sale Price of such securities on the Trading Day immediately prior to the public announcement of such proposed Change of Control) divided by (II) the Alternate Conversion Price then in effect (the "**Change of Control Redemption Price**"). Redemptions required by this Section 5 shall be made in accordance with the provisions of Section 13 and shall have priority to payments to stockholders in connection with such Change of Control. To the extent redemptions required by this Section 5(b) are deemed or determined by a court of competent jurisdiction to be prepayments of this Note by the Company, such redemptions shall be deemed to be voluntary prepayments. Notwithstanding anything to the contrary in this Section 5, but subject to Section 3(d), until the Change of Control Redemption Price (together with any Late Charges thereon) is paid in full, the Conversion Amount submitted for redemption under this Section 5(b) (together with any Late Charges thereon) may be converted, in whole or in part, by the Holder into Common Stock pursuant to Section 3. In the event of a partial redemption of this Note pursuant hereto, the Principal amount redeemed shall be deducted from the Installment Amount(s) relating to the applicable Installment Date(s) as set forth in the Change of Control Redemption Notice. In the event of the Company's redemption of any portion of this Note under this Section 5(b), the Holder's damages would be uncertain and difficult to estimate because of the parties' inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for the Holder. Accordingly, any redemption premium due under this Section 5(b) is intended by the parties to be, and shall be deemed, a reasonable estimate of the Holder's actual loss of its investment opportunity and not as a penalty.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>RIGHTS UPON ISSUANCE OF PURCHASE RIGHTS AND OTHER CORPORATE EVENTS</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Purchase Rights</u>. In addition to any adjustments pursuant to Sections 7 or 17 below, if at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to all or substantially all of the record holders of any class of Common Stock (the "**Purchase Rights**"), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without taking into account any limitations or restrictions on the convertibility of this Note and assuming for such purpose that the Note was converted at the Alternate Conversion Price as of the applicable record date) immediately prior to the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (<u>provided</u>, <u>however</u>, that to the extent that the Holder's right to participate in any such Purchase Right would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to the extent of the Maximum Percentage (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Purchase Right (and beneficial ownership) to the extent of any such excess) and such Purchase Right to such extent shall be held in abeyance (and, if such Purchase Right has an expiration date, maturity date or other similar provision, such term shall be extended by such number of days held in abeyance, if applicable) for the benefit of the Holder until such time or times, if ever, as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent Purchase Right held similarly in abeyance (and, if such Purchase Right has an expiration date, maturity date or other similar provision, such term shall be extended by such number of days held in abeyance, if applicable)) to the same extent as if there had been no such limitation).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Other Corporate Events</u>. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Common Stock (a "**Corporate Event**"), the Company shall make appropriate provision to ensure that the Holder will thereafter have the right to receive upon a conversion of this Note, at the Holder's option (i) in addition to the shares of Common Stock receivable upon such conversion, such securities or other assets to which the Holder would have been entitled with respect to such shares of Common Stock had such shares of Common Stock been held by the Holder upon the consummation of such Corporate Event (without taking into account any limitations or restrictions on the convertibility of this Note) or (ii) in lieu of the shares of Common Stock otherwise receivable upon such conversion, such securities or other assets received by the holders of shares of Common Stock in connection with the consummation of such Corporate Event in such amounts as the Holder would have been entitled to receive had this Note initially been issued with conversion rights for the form of such consideration (as opposed to shares of Common Stock) at a conversion rate for such consideration commensurate with the Conversion Rate. Provision made pursuant to the preceding sentence shall be in a form and substance satisfactory to the Holder. The provisions of this Section 6 shall apply similarly and equally to successive Corporate Events and shall be applied without regard to any limitations on the conversion or redemption of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>RIGHTS UPON ISSUANCE OF OTHER SECURITIES</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Adjustment of Conversion Price upon Issuance of Common Stock</u>. If and whenever on or after the Subscription Date the Company grants, issues or sells (or enters into any agreement to grant, issue or sell), or in accordance with this Section 7(a) is deemed to have granted, issued or sold, any shares of Common Stock (including the granting, issuance or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding any Excluded Securities granted, issued or sold or deemed to have been granted, issued or sold) for a consideration per share (the "**New Issuance Price**") less than a price equal to the Conversion Price in effect immediately prior to such granting, issuance or sale or deemed granting, issuance or sale (such Conversion Price then in effect is referred to herein as the "**Applicable Price**") (the foregoing a "**Dilutive Issuance**"), then, immediately after such Dilutive Issuance, the Conversion Price then in effect shall be reduced to an amount equal to the New Issuance Price. For all purposes of the foregoing (including, without limitation, determining the adjusted Conversion Price and the New Issuance Price under this Section 7(a)), the following shall be applicable:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Issuance of Options</u>. If the Company in any manner grants, issues or sells (or enters into any agreement to grant, issue or sell) any Options and the lowest price per share for which one share of Common Stock is at any time issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise pursuant to the terms thereof is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the granting, issuance or sale of such Option for such price per share. For purposes of this Section 7(a)(i), the "lowest price per share for which one share of Common Stock is at any time issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise pursuant to the terms thereof" shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to any one share of Common Stock upon the granting, issuance or sale of such Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option or otherwise pursuant to the terms thereof and (y) the lowest exercise price set forth in such Option for which one share of Common Stock is issuable (or may become issuable assuming all possible market conditions) upon the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise pursuant to the terms thereof, minus (2) the sum of all amounts paid or payable to the holder of such Option (or any other Person) with respect to any one share of Common Stock upon the granting, issuance or sale of such Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option or otherwise pursuant to the terms thereof plus the value of any other consideration (including, without limitation, consideration consisting of cash, debt forgiveness, assets or any other property) received or receivable by, or benefit conferred on, the holder of such Option (or any other Person). Except as contemplated below, no further adjustment of the Conversion Price shall be made upon the actual issuance of such share of Common Stock or of such Convertible Securities upon the exercise of such Options or otherwise pursuant to the terms thereof or upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Issuance of Convertible Securities</u>. If the Company in any manner issues or sells (or enters into any agreement to issue or sell) any Convertible Securities and the lowest price per share for which one share of Common Stock is at any time issuable upon the conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the issuance or sale (or the time of execution of such agreement to issue or sell, as applicable) of such Convertible Securities for such price per share. For the purposes of this Section 7(a)(ii), the "lowest price per share for which one share of Common Stock is at any time issuable upon the conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof" shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to one share of Common Stock upon the issuance or sale (or pursuant to the agreement to issue or sell, as applicable) of the Convertible Security and upon conversion, exercise or exchange of such Convertible Security or otherwise pursuant to the terms thereof and (y) the lowest conversion price set forth in such Convertible Security for which one share of Common Stock is issuable (or may become issuable assuming all possible market conditions) upon conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof minus (2) the sum of all amounts paid or payable to the holder of such Convertible Security (or any other Person) with respect to any one share of Common Stock upon the issuance or sale (or the agreement to issue or sell, as applicable) of such Convertible Security plus the value of any other consideration received or receivable (including, without limitation, any consideration consisting of cash, debt forgiveness, assets or other property) by, or benefit conferred on, the holder of such Convertible Security (or any other Person). Except as contemplated below, no further adjustment of the Conversion Price shall be made upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities or otherwise pursuant to the terms thereof, and if any such issuance or sale of such Convertible Securities is made upon exercise of any Options for which adjustment of the Conversion Price has been or is to be made pursuant to other provisions of this Section 7(a), except as contemplated below, no further adjustment of the Conversion Price shall be made by reason of such issuance or sale.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>Change in Option Price or Rate of Conversion</u>. If the purchase or exercise price provided for in any Options, the additional consideration, if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time (other than proportional changes in conversion or exercise prices, as applicable, in connection with an event referred to in Section 7(b) below), the Conversion Price in effect at the time of such increase or decrease shall be adjusted to the Conversion Price which would have been in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase price, additional consideration or increased or decreased conversion rate (as the case may be) at the time initially granted, issued or sold. For purposes of this Section 7(a)(iii), if the terms of any Option or Convertible Security (including, without limitation, any Option or Convertible Security that was outstanding as of the Subscription Date) are increased or decreased in the manner described in the immediately preceding sentence, then such Option or Convertible Security and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section 7(a) shall be made if such adjustment would result in an increase of the Conversion Price then in effect.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>Calculation of Consideration Received</u>. If any Option and/or Convertible Security and/or Adjustment Right is issued in connection with the issuance or sale or deemed issuance or sale of any other securities of the Company (as determined by the Holder, the "**Primary Security**", and such Option and/or Convertible Security and/or Adjustment Right, the "**Secondary Securities**"), together comprising one integrated transaction (or one or more transactions if such issuances or sales or deemed issuances or sales of securities of the Company either (A) have at least one investor or purchaser in common, (B) are consummated in reasonable proximity to each other and/or (C) are consummated under the same plan of financing), the aggregate consideration per share of Common Stock with respect to such Primary Security shall be deemed to be equal to the difference of (x) the lowest price per share for which one share of Common Stock was issued (or was deemed to be issued pursuant to Section 7(a)(i) or 7(a)(ii) above, as applicable) in such integrated transaction solely with respect to such Primary Security, minus (y) with respect to such Secondary Securities, the sum of (I) the Black Scholes Consideration Value of each such Option, if any, (II) the fair market value (as determined by the Holder in good faith) or the Black Scholes Consideration Value, as applicable, of such Adjustment Right, if any, and (III) the fair market value (as determined by the Holder) of such Convertible Security, if any, in each case, as determined on a per share basis in accordance with this Section 7(a)(iv). If any shares of Common Stock, Options or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor (for the purpose of determining the consideration paid for such Common Stock, Option or Convertible Security, but not for the purpose of the calculation of the Black Scholes Consideration Value) will be deemed to be the net amount of consideration received by the Company therefor. If any shares of Common Stock, Options or Convertible Securities are issued or sold for a consideration other than cash, the amount of such consideration received by the Company (for the purpose of determining the consideration paid for such Common Stock, Option or Convertible Security, but not for the purpose of the calculation of the Black Scholes Consideration Value) will be the fair value of such consideration, except where such consideration consists of publicly traded securities, in which case the amount of consideration received by the Company for such securities will be the arithmetic average of the VWAPs of such security for each of the five (5) Trading Days immediately preceding the date of receipt. If any shares of Common Stock, Options or Convertible Securities are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving entity, the amount of consideration therefor (for the purpose of determining the consideration paid for such Common Stock, Option or Convertible Security, but not for the purpose of the calculation of the Black Scholes Consideration Value) will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible Securities (as the case may be). The fair value of any consideration other than cash or publicly traded securities will be determined jointly by the Company and the Holder. If such parties are unable to reach agreement within ten (10) days after the occurrence of an event requiring valuation (the "**Valuation Event**"), the fair value of such consideration will be determined within five (5) Trading Days after the tenth (10<sup>th</sup>) day following such Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Holder. The determination of such appraiser shall be final and binding upon all parties absent manifest error and the fees and expenses of such appraiser shall be borne by the Company.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>Record Date</u>. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issuance or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase (as the case may be).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Adjustment of Conversion Price upon Subdivision or Combination of Common Stock</u>. Without limiting any provision of Section 6, Section 17 or Section 7(a), if the Company at any time on or after the Subscription Date subdivides (by any stock split, stock dividend, stock combination, recapitalization or other similar transaction) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced. Without limiting any provision of Section 6, Section 17 or Section 7(a), if the Company at any time on or after the Subscription Date combines (by any stock split, stock dividend, stock combination, recapitalization or other similar transaction) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such combination will be proportionately increased. Any adjustment pursuant to this Section 7(b) shall become effective immediately after the effective date of such subdivision or combination. If any event requiring an adjustment under this Section 7(b) occurs during the period that a Conversion Price is calculated hereunder, then the calculation of such Conversion Price shall be adjusted appropriately to reflect such event.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Holder'</u><u>s Right of Adjusted Conversion Price</u>. In addition to and not in limitation of the other provisions of this Section 7, if the Company in any manner issues or sells or enters into any agreement to issue or sell, any Common Stock, Options or Convertible Securities (any such securities, "**Variable Price Securities**"), after the Subscription Date that are issuable pursuant to such agreement or convertible into or exchangeable or exercisable for shares of Common Stock at a price which varies or may vary with the market price of the shares of Common Stock, including by way of one or more reset(s) to a fixed price, but exclusive of such formulations reflecting customary anti-dilution provisions (such as share splits, share combinations, share dividends and similar transactions) (each of the formulations for such variable price being herein referred to as, the "**Variable Price**"), the Company shall provide written notice thereof via electronic mail and overnight courier to the Holder on the date of such agreement and the issuance of such Common Stock, Convertible Securities or Options. From and after the date the Company enters into such agreement or issues any such Variable Price Securities, the Holder shall have the right, but not the obligation, in its sole discretion to substitute the Variable Price for the Conversion Price upon conversion of this Note by designating in the Conversion Notice delivered upon any conversion of this Note that solely for purposes of such conversion the Holder is relying on the Variable Price rather than the Conversion Price then in effect. The Holder's election to rely on a Variable Price for a particular conversion of this Note shall not obligate the Holder to rely on a Variable Price for any future conversion of this Note. In addition, from and after the date the Company enters into such agreement or issues any such Variable Price Securities, for purposes of calculating the Installment Conversion Price as of any time of determination, the "Conversion Price" as used therein shall mean the lower of (x) the Conversion Price as of such time of determination and (y) the Variable Price as of such time of determination.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Stock Combination Event Adjustments</u>. If at any time and from time to time on or after the Subscription Date there occurs any stock split, stock dividend, stock combination recapitalization or other similar transaction involving the Common Stock (each, a "**Stock Combination Event**", and such date thereof, the "**Stock Combination Event Date**") and the Event Market Price is less than the Conversion Price then in effect (after giving effect to the adjustment in Section 7(b) above), then on the sixteenth (16<sup>th</sup>) Trading Day immediately following such Stock Combination Event Date, the Conversion Price then in effect on such sixteenth (16<sup>th</sup>) Trading Day (after giving effect to the adjustment in Section 7(b) above) shall be reduced (but in no event increased) to the Event Market Price. For the avoidance of doubt, if the adjustment in the immediately preceding sentence would otherwise result in an increase in the Conversion Price hereunder, no adjustment shall be made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Other Events</u>. In the event that the Company shall take any action, directly or indirectly, to which the provisions hereof are not strictly applicable, or, if applicable, would not operate to protect the Holder from dilution or if any event occurs of the type contemplated by the provisions of this Section 7 but not expressly provided for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company's board of directors shall in good faith determine and implement an appropriate adjustment in the Conversion Price so as to protect the rights of the Holder, provided that no such adjustment pursuant to this Section 7(e) will increase the Conversion Price as otherwise determined pursuant to this Section 7, provided further that if the Holder does not accept such adjustments as appropriately protecting its interests hereunder against such dilution, then the Company's board of directors and the Holder shall agree, in good faith, upon an independent investment bank of nationally recognized standing to make such appropriate adjustments, whose determination shall be final and binding absent manifest error and whose fees and expenses shall be borne by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Calculations</u>. All calculations under this Section 7 shall be made by rounding to the nearest cent or the nearest 1/100<sup>th</sup> of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Voluntary Adjustment by Company</u>. Subject to the rules and regulations of the Principal Market, the Company may at any time during the term of this Note, with the prior written consent of the Required Holders (as defined in the Securities Purchase Agreement), reduce the then current Conversion Price of each of the Notes to any amount and for any period of time deemed appropriate by the board of directors of the Company.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>INSTALLMENT CONVERSION OR REDEMPTION</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>General</u>. On each applicable Installment Date, provided there has been no Equity Conditions Failure, the Company shall pay to the Holder of this Note the applicable Installment Amount due on such date by converting such Installment Amount in accordance with this Section 8 (a "**Installment Conversion**"); <u>provided</u>, <u>however</u>, that the Company may, at its option following notice to the Holder as set forth below, pay the Installment Amount by redeeming such Installment Amount in cash (a "**Installment Redemption**") or by any combination of an Installment Conversion and an Installment Redemption so long as all of the outstanding applicable Installment Amount due on any Installment Date shall be converted and/or redeemed by the Company on the applicable Installment Date, subject to the provisions of this Section 8. On or prior to the date which is the sixth (6th) Trading Day prior to each Installment Date (or, with respect to the initial Installment Date, on the Initial Installment Notice Due Date) (each, an "**Installment Notice Due Date**"), the Company shall deliver written notice (each, a "**Installment Notice**" and the date all of the holders receive such notice is referred to as to the "**Installment Notice Date**"), to each holder of Notes and such Installment Notice shall (i) either (A) confirm that the applicable Installment Amount of such holder's Note shall be converted in whole pursuant to an Installment Conversion or (B) (1) state that the Company elects to redeem for cash, or is required to redeem for cash in accordance with the provisions of the Notes, in whole or in part, the applicable Installment Amount pursuant to an Installment Redemption and (2) specify the portion of such Installment Amount which the Company elects or is required to redeem pursuant to an Installment Redemption (such amount to be redeemed in cash, the "**Installment Redemption Amount**") and the portion of the applicable Installment Amount, if any, with respect to which the Company will, and is permitted to, effect an Installment Conversion (such amount of the applicable Installment Amount so specified to be so converted pursuant to this Section 8 is referred to herein as the "**Installment Conversion Amount**"), which amounts when added together, must at least equal the entire applicable Installment Amount and (ii) if the applicable Installment Amount is to be paid, in whole or in part, pursuant to an Installment Conversion, certify that there is not then an Equity Conditions Failure as of the applicable Installment Notice Date. Each Installment Notice shall be irrevocable. If the Company does not timely deliver an Installment Notice in accordance with this Section 8 with respect to a particular Installment Date, then the Company shall be deemed to have delivered an irrevocable Installment Notice confirming an Installment Conversion of the entire Installment Amount payable on such Installment Date and shall be deemed to have certified that there is not then an Equity Conditions Failure in connection with such Installment Conversion. Except as expressly provided in this Section 8(a), the Company shall convert and/or redeem the applicable Installment Amount of this Note pursuant to this Section 8 and the corresponding Installment Amounts of the Other Notes pursuant to the corresponding provisions of the Other Notes in the same ratio of the applicable Installment Amount being converted and/or redeemed hereunder. The applicable Installment Conversion Amount (whether set forth in the applicable Installment Notice or by operation of this Section 8) shall be converted in accordance with Section 8(b) and the applicable Installment Redemption Amount shall be redeemed in accordance with Section 8(c).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Mechanics of Installment Conversion</u>. Subject to Section 3(d), if the Company delivers an Installment Notice or is deemed to have delivered an Installment Notice certifying that such Installment Amount is being paid, in whole or in part, in an Installment Conversion in accordance with Section 8(a), then the remainder of this Section 8(b) shall apply. The applicable Installment Conversion Amount, if any, shall be converted on the applicable Installment Date at the applicable Installment Conversion Price and the Company shall, on such Installment Date, deliver to the Holder's account with DTC such shares of Common Stock issued upon such conversion (subject to the reduction contemplated by the immediately following sentence and, if applicable, the penultimate sentence of this Section 8(b)), provided that the Equity Conditions are then satisfied (or waived in writing by the Holder) on such Installment Date and an Installment Conversion is not otherwise prohibited under any other provision of this Note. If the Company confirmed (or is deemed to have confirmed by operation of Section 8(a)) the conversion of the applicable Installment Conversion Amount, in whole or in part, and there was no Equity Conditions Failure as of the applicable Installment Notice Date (or is deemed to have certified that the Equity Conditions in connection with any such conversion have been satisfied by operation of Section 8(a)) but an Equity Conditions Failure occurred between the applicable Installment Notice Date and any time through the applicable Installment Date (the "**Interim Installment Period**"), the Company shall provide the Holder a subsequent notice to that effect. If there is an Equity Conditions Failure (which is not waived in writing by the Holder) during such Interim Installment Period or an Installment Conversion is not otherwise permitted under any other provision of this Note, then, at the option of the Holder designated in writing to the Company, the Holder may require the Company to do any one or more of the following: (i) the Company shall redeem all or any part designated by the Holder of the unconverted Installment Conversion Amount (such designated amount is referred to as the "**Designated Redemption Amount**") and the Company shall pay to the Holder within one (1) day of such Installment Date, by wire transfer of immediately available funds, an amount in cash equal to such Designated Redemption Amount, and/or (ii) the Installment Conversion shall be null and void with respect to all or any part designated by the Holder of the unconverted Installment Conversion Amount and the Holder shall be entitled to all the rights of a holder of this Note with respect to such designated part of the Installment Conversion Amount; provided, however, the Conversion Price for such designated part of such unconverted Installment Conversion Amount shall thereafter be adjusted to equal the lesser of (A) the Installment Conversion Price as in effect on the date on which the Holder voided the Installment Conversion and (B) the Installment Conversion Price that would be in effect on the date on which the Holder delivers a Conversion Notice relating thereto as if such date was an Installment Date. If the Company fails to redeem any Designated Redemption Amount by the first (1st) day following the applicable Installment Date by payment of such amount by such date, then the Holder shall have the rights set forth in Section 13(a) as if the Company failed to pay the applicable Installment Redemption Price (as defined below) and all other rights under this Note (including, without limitation, such failure constituting an Event of Default described in Section 4(a)(vi)). Notwithstanding anything to the contrary in this Section 8(b), but subject to 3(d), until the Company delivers Common Stock representing the Installment Conversion Amount to the Holder, the Installment Conversion Amount may be converted by the Holder into Common Stock pursuant to Section 3. In the event that the Holder elects to convert the Installment Conversion Amount prior to the applicable Installment Date as set forth in the immediately preceding sentence, the Installment Conversion Amount so converted shall be deducted from the Installment Amount(s) relating to the applicable Installment Date(s) as set forth in the applicable Conversion Notice. The Company shall pay any and all taxes that may be payable with respect to the issuance and delivery of any shares of Common Stock in any Installment Conversion hereunder.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Mechanics of Installment Redemption</u>. If the Company elects or is required to effect an Installment Redemption, in whole or in part, in accordance with Section 8(a), then the Installment Redemption Amount, if any, shall be redeemed by the Company in cash on the applicable Installment Date by wire transfer to the Holder of immediately available funds in an amount equal to 100% of the applicable Installment Redemption Amount (the "**Installment Redemption Price**"). If the Company fails to redeem such Installment Redemption Amount on such Installment Date by payment of the Installment Redemption Price, then, at the option of the Holder designated in writing to the Company (any such designation shall be a "**Conversion Notice**" for purposes of this Note), the Holder may require the Company to convert all or any part of the Installment Redemption Amount at the Installment Conversion Price (determined as of the date of such designation as if such date were an Installment Date). Conversions required by this Section 8(c) shall be made in accordance with the provisions of Section 3(c). Notwithstanding anything to the contrary in this Section 8(c), but subject to Section 3(d), until the Installment Redemption Price (together with any Late Charges thereon) is paid in full, the Installment Redemption Amount (together with any Late Charges thereon) may be converted, in whole or in part, by the Holder into Common Stock pursuant to Section 3. In the event the Holder elects to convert all or any portion of the Installment Redemption Amount prior to the applicable Installment Date as set forth in the immediately preceding sentence, the Installment Redemption Amount so converted shall be deducted from the Installment Amounts relating to the applicable Installment Date(s) as set forth in the applicable Conversion Notice. Redemptions required by this Section 8(c) shall be made in accordance with the provisions of Section 13.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Deferred Installment Amount</u>. Notwithstanding any provision of this Section 8(d) to the contrary, the Holder may, at its option and in its sole discretion, deliver a written notice to the Company no later than the Trading Day immediately prior to the applicable Installment Date electing to have the payment of all or any portion of an Installment Amount payable on such Installment Date deferred (such amount deferred, the "**Deferral Amount**", and such deferral, each a "**Deferral**") until any subsequent Installment Date or the Maturity Date, as selected by the Holder, in its sole discretion, in which case, the Deferral Amount shall be added to, and become part of, such subsequent Installment Amount (or amount due in cash on the Maturity Date) and such Deferral Amount shall continue to accrue Interest hereunder. Any notice delivered by the Holder pursuant to this Section 8(d) shall set forth (i) the Deferral Amount and (ii) the date that such Deferral Amount shall now be payable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Acceleration of Installment Amounts</u>. Notwithstanding any provision of this Section 8 to the contrary, but subject to Section 3(d), during the period commencing on the Installment Notice Due Date for an Installment Date (such Installment Date, a "**Current Installment Date**") and ending on the Trading Day immediately prior to the next Installment Date (or, if after the last Installment Date, from such last Installment Date through and including the Maturity Date) (each, an "**Installment Period**"), at the option of the Holder, at one or more times, the Holder may convert up to four (4) other Installment Amount in additional to any amounts Deferred with respect to such Current Installment Date (which, if unused, shall increase the available number of Accelerations in subsequent Installment Dates until used hereunder) (each, an "**Acceleration**", and each such amount, an "**Acceleration Amount**", and the Conversion Date of any such Acceleration, each an "**Acceleration Date**"), in whole or in part, at the Acceleration Conversion Price of such Acceleration Date in accordance with the conversion procedures set forth in Section 3 hereunder (with "Acceleration Conversion Price" replacing "Conversion Price" for all purposes therein), *mutatis mutandis*.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>SUBSEQUENT PLACEMENT OPTIONAL REDEMPTION</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>General</u>. At any time from and after the earlier of (x) the date the Holder (the "**Holder Subsequent Placement Notice Date**") becomes aware of the occurrence of a Subsequent Placement (as defined in the Securities Purchase Agreement) of Variable Price Securities (in each case, other than with respect to the Notes) (each, an "**Eligible Subsequent Placement**"), and (y) the time of consummation of such Eligible Subsequent Placement, the Holder shall have the right, in its sole discretion, to require that the Company redeem (each, a "**Subsequent Placement Optional Redemption**") all, or any portion, of the Conversion Amount under this Note not in excess of (together with any Subsequent Placement Optional Redemption Amount (as defined in the applicable other Note of the Holder) of any other Notes of the Holder) the Holder's Holder Pro Rata Amount of Subsequent Placement Applicable Percentage of the net proceeds of such Eligible Subsequent Placement (the "**Eligible Subsequent Placement Optional Redemption Amount**") by delivering written notice thereof (an "**Subsequent Placement Optional Redemption Notice**") to the Company. The Company shall notify the Holder in writing no later than five (5) Trading Days after the occurrence of any Eligible Subsequent Placement, which notice shall include (i) the sale price of each Eligible Subsequent Placement, (ii) the date of each Eligible Subsequent Placement and (iii) the aggregate gross proceeds of each Eligible Subsequent Placement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Mechanics</u>. Each Subsequent Placement Optional Redemption Notice shall indicate that all, or such applicable portion, as set forth in the applicable Subsequent Placement Optional Redemption Notice, of the Conversion Amount of this Note (with a Subsequent Placement Optional Redemption Price not in excess of such applicable Eligible Subsequent Placement Optional Redemption Amount) the Holder is electing to have redeemed (the "**Subsequent Placement Optional Redemption Amount**") and the date of such Subsequent Placement Optional Redemption (the "**Subsequent Placement Optional Redemption Date**"), which shall be the later of (x) the fifth (5th) Business Day after the date of the applicable Subsequent Placement Optional Redemption Notice and (y) the date of the consummation of such Eligible Subsequent Placement. The portion of the Conversion Amount of this Note subject to redemption pursuant to this Section 9 shall be redeemed by the Company in cash at a price equal to 100% of the Subsequent Placement Optional Redemption Amount being redeemed as of the Subsequent Placement Optional Redemption Date (the "**Subsequent Placement Optional Redemption Price**"). Redemptions required by this Section 9 shall be made in accordance with the provisions of Section 13.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>NONCIRCUMVENTION</u>. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation (as defined in the Securities Purchase Agreement), Bylaws (as defined in the Securities Purchase Agreement) or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Note, and will at all times in good faith carry out all of the provisions of this Note and take all action as may be required to protect the rights of the Holder of this Note. Without limiting the generality of the foregoing or any other provision of this Note or the other Transaction Documents, the Company (a) shall not increase the par value of any shares of Common Stock receivable upon conversion of this Note above the Conversion Price then in effect, and (b) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the conversion of this Note. Notwithstanding anything herein to the contrary, if after the sixty (60) calendar day anniversary of the Issuance Date, the Holder is not permitted to convert this Note in full for any reason (other than pursuant to restrictions set forth in Section 3(d) hereof), the Company shall use its best efforts to promptly remedy such failure, including, without limitation, obtaining such consents or approvals as necessary to permit such conversion into shares of Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>RESERVATION OF AUTHORIZED SHARES</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Reservation</u>. So long as any Notes remain outstanding, the Company shall at all times reserve at least 200% of the number of shares of Common Stock as shall from time to time be necessary to effect the conversion, including without limitation, Installment Conversions, Alternate Conversions and Accelerations, of all of the Notes then outstanding (without regard to any limitations on conversions and assuming such Notes remain outstanding until the Maturity Date) at the Alternate Conversion Price then in effect (the "**Required Reserve Amount**"). The Required Reserve Amount (including, without limitation, each increase in the number of shares so reserved) shall be allocated pro rata among the holders of the Notes based on the original principal amount of the Notes held by each holder on the Applicable Closing Date or increase in the number of reserved shares, as the case may be (the "**Authorized Share Allocation**"). In the event that a holder shall sell or otherwise transfer any of such holder's Notes, each transferee shall be allocated a pro rata portion of such holder's Authorized Share Allocation. Any shares of Common Stock reserved and allocated to any Person which ceases to hold any Notes shall be allocated to the remaining holders of Notes, pro rata based on the principal amount of the Notes then held by such holders.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Insufficient Authorized Shares</u>. If, notwithstanding Section 11(a), and not in limitation thereof, at any time while any of the Notes remain outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon conversion of the Notes at least a number of shares of Common Stock equal to the Required Reserve Amount (an "**Authorized Share Failure**"), then the Company shall immediately take all action necessary to increase the Company's authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for the Notes then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its best efforts to solicit its stockholders' approval of such increase in authorized shares of Common Stock and to cause its board of directors to recommend to the stockholders that they approve such proposal. In the event that the Company is prohibited from issuing shares of Common Stock pursuant to the terms of this Note due to the failure by the Company to have sufficient shares of Common Stock available out of the authorized but unissued shares of Common Stock (such unavailable number of shares of Common Stock, the "**Authorized Failure Shares**"), in lieu of delivering such Authorized Failure Shares to the Holder, the Company shall pay cash in exchange for the redemption of such portion of the Conversion Amount convertible into such Authorized Failure Shares at a price equal to the sum of (i) the product of (x) such number of Authorized Failure Shares and (y) the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date the Holder delivers the applicable Conversion Notice with respect to such Authorized Failure Shares to the Company and ending on the date of such issuance and payment under this Section 11(a); and (ii) to the extent the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of Authorized Failure Shares, any brokerage commissions and other out-of-pocket expenses, if any, of the Holder incurred in connection therewith. Nothing contained in Section 11(a) or this Section 11(b) shall limit any obligations of the Company under any provision of the Securities Purchase Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u>REDEMPTIONS AT THE COMPANY'</u><u>S ELECTION</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Company Optional Redemption</u>. At any time after the Issuance Date, the Company shall have the right to redeem all, but not less than all, of the Conversion Amount then remaining under this Note (the "**Company Optional Redemption Amount**") on the Company Optional Redemption Date (each as defined below) (a "**Company Optional Redemption**"). The portion of this Note subject to redemption pursuant to this Section 12 shall be redeemed by the Company in cash at a price (the "**Company Optional Redemption Price**") equal to 105% of the greater of (i) the Conversion Amount being redeemed as of the Company Optional Redemption Date and (ii) solely if an Equity Failure Triggering Event has occurred and is continuing, the product of (1) the Conversion Rate (assuming an Alternate Conversion) with respect to the Conversion Amount being redeemed as of the Company Optional Redemption Date multiplied by (2) the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date immediately preceding such Company Optional Redemption Notice Date and ending on the Trading Day immediately prior to the date the Company makes the entire payment required to be made under this Section 12. The Company may exercise its right to require redemption under this Section 12 by delivering a written notice thereof by electronic mail and overnight courier to all, but not less than all, of the holders of Notes (the "**Company Optional Redemption Notice**" and the date all of the holders of Notes received such notice is referred to as the "**Company Optional Redemption Notice Date**"). The Company may deliver only one Company Optional Redemption Notice hereunder and such Company Optional Redemption Notice shall be irrevocable. The Company Optional Redemption Notice shall (A) state the date on which the Company Optional Redemption shall occur (the "**Company Optional Redemption Date**") which date shall not be less than twenty (20) Trading Days nor more than forty (40) Trading Days following the Company Optional Redemption Notice Date (B) state the aggregate Conversion Amount of the Notes which is being redeemed in such Company Optional Redemption from the Holder and all of the other holders of the Notes pursuant to this Section 12(a) (and analogous provisions under the Other Notes) on the Company Optional Redemption Date. Notwithstanding anything herein to the contrary, at any time prior to the date the Company Optional Redemption Price is paid, in full, the Company Optional Redemption Amount may be converted, in whole or in part, by the Holder into shares of Common Stock pursuant to Section 3. All Conversion Amounts converted by the Holder after the Company Optional Redemption Notice Date shall reduce the Company Optional Redemption Amount of this Note required to be redeemed on the Company Optional Redemption Date. Redemptions made pursuant to this Section 12(a) shall be made in accordance with Section 13. In the event of the Company's redemption of any portion of this Note under this Section 12, the Holder's damages would be uncertain and difficult to estimate because of the parties' inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for the Holder. Accordingly, any redemption premium due under this Section 12 is intended by the parties to be, and shall be deemed, a reasonable estimate of the Holder's actual loss of its investment opportunity and not as a penalty. For the avoidance of doubt, the Company shall have no right to effect a Company Optional Redemption if any Event of Default has occurred and continuing, but any Event of Default shall have no effect upon the Holder's right to convert this Note in its discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Pro Rata Redemption Requirement</u>. If the Company elects to cause a Company Optional Redemption of this Note pursuant to Section 12(a), then it must simultaneously take the same action with respect to all of the Other Notes.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. <u>REDEMPTIONS</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Mechanics</u>. The Company shall deliver the applicable Event of Default Redemption Price to the Holder in cash within five (5) Business Days after the Company's receipt of the Holder's Event of Default Redemption Notice. If the Holder has submitted a Change of Control Redemption Notice in accordance with Section 5(b), the Company shall deliver the applicable Change of Control Redemption Price to the Holder in cash concurrently with the consummation of such Change of Control if such notice is received prior to the consummation of such Change of Control and within five (5) Business Days after the Company's receipt of such notice otherwise. The Company shall deliver the applicable Company Optional Redemption Price to the Holder in cash on the applicable Company Optional Redemption Date. The Company shall deliver the applicable Installment Redemption Price to the Holder in cash on the applicable Installment Date. The Company shall deliver the applicable Subsequent Placement Optional Redemption Price to the Holder in cash on the applicable Subsequent Placement Optional Redemption Date. Notwithstanding anything herein to the contrary, in connection with any redemption hereunder at a time the Holder is entitled to receive a cash payment under any of the other Transaction Documents, at the option of the Holder delivered in writing to the Company, the applicable Redemption Price hereunder shall be increased by the amount of such cash payment owed to the Holder under such other Transaction Document and, upon payment in full or conversion in accordance herewith, shall satisfy the Company's payment obligation under such other Transaction Document. In the event of a redemption of less than all of the Conversion Amount of this Note, the Company shall promptly cause to be issued and delivered to the Holder a new Note (in accordance with Section 20(d)) representing the outstanding Principal which has not been redeemed. In the event that the Company does not pay the applicable Redemption Price to the Holder within the time period required, at any time thereafter and until the Company pays such unpaid Redemption Price in full, the Holder shall have the option, in lieu of redemption, to require the Company to promptly return to the Holder all or any portion of this Note representing the Conversion Amount that was submitted for redemption and for which the applicable Redemption Price (together with any Late Charges thereon) has not been paid. Upon the Company's receipt of such notice, (x) the applicable Redemption Notice shall be null and void with respect to such Conversion Amount, (y) the Company shall immediately return this Note, or issue a new Note (in accordance with Section 20(d)), to the Holder, and in each case the principal amount of this Note or such new Note (as the case may be) shall be increased by an amount equal to the difference between (1) the applicable Redemption Price (as the case may be, and as adjusted pursuant to this Section 13, if applicable) minus (2) the Principal portion of the Conversion Amount submitted for redemption and (z) the Conversion Price of this Note or such new Notes (as the case may be) shall be automatically adjusted with respect to each conversion effected thereafter by the Holder to the lowest of (A) the Conversion Price as in effect on the date on which the applicable Redemption Notice is voided, and (B) the Alternate Conversion Price as of the date on which the applicable Redemption Notice is voided. The Holder's delivery of a notice voiding a Redemption Notice and exercise of its rights following such notice shall not affect the Company's obligations to make any payments of Late Charges which have accrued prior to the date of such notice with respect to the Conversion Amount subject to such notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Redemption by Other Holders</u>. Upon the Company's receipt of notice from any of the holders of the Other Notes for redemption or repayment as a result of an event or occurrence substantially similar to the events or occurrences described in Section 4(b) or Section 5(b) (each, an "**Other Redemption Notice**"), the Company shall immediately, but no later than one (1) Business Day of its receipt thereof, forward to the Holder by electronic mail a copy of such notice. If the Company receives a Redemption Notice and one or more Other Redemption Notices, during the seven (7) Business Day period beginning on and including the date which is two (2) Business Days prior to the Company's receipt of the Holder's applicable Redemption Notice and ending on and including the date which is two (2) Business Days after the Company's receipt of the Holder's applicable Redemption Notice and the Company is unable to redeem all principal, interest and other amounts designated in such Redemption Notice and such Other Redemption Notices received during such seven (7) Business Day period, then the Company shall redeem a pro rata amount from each holder of the Notes (including the Holder) based on the principal amount of the Notes submitted for redemption pursuant to such Redemption Notice and such Other Redemption Notices received by the Company during such seven (7) Business Day period.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. <u>VOTING RIGHTS</u>. The Holder shall have no voting rights as the holder of this Note, except as required by law (including, without limitation, the Georgia Business Corporation Code) and as expressly provided in this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. <u>COVENANTS</u>. Until all of the Notes have been converted, redeemed or otherwise satisfied in accordance with their terms:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Rank</u>. All payments due under this Note (a) shall rank *pari passu* with all Other Notes and (b) shall be senior to all other Indebtedness of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Incurrence of Indebtedness</u>. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, incur or guarantee, assume or suffer to exist any Indebtedness (other than (i) the Indebtedness evidenced by this Note and the Other Notes and (ii) other Permitted Indebtedness).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Existence of Liens</u>. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, allow or suffer to exist any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets (including accounts and contract rights) owned by the Company or any of its Subsidiaries (collectively, "**Liens**") other than Permitted Liens.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Restricted Payments and Investments</u>. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, redeem, defease, repurchase, repay or make any payments in respect of, by the payment of cash or cash equivalents (in whole or in part, whether by way of open market purchases, tender offers, private transactions or otherwise), all or any portion of any Indebtedness (other than the Notes) whether by way of payment in respect of principal of (or premium, if any) or interest on, such Indebtedness or make any Investment or otherwise contribute or deposit to any Subsidiary any cash, as applicable, if at the time such payment with respect to such Indebtedness and/or Investment, contribution and/or transfer of cash, as applicable, is due or is otherwise made or, after giving effect to such payment, (i) an event constituting an Event of Default has occurred and is continuing or (ii) an event that with the passage of time and without being cured would constitute an Event of Default has occurred and is continuing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Restriction on Redemption and Cash Dividends</u>. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, redeem, repurchase or declare or pay any cash dividend or distribution on any of its capital stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Restriction on Transfer of Assets</u>. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, sell, lease, license, assign, transfer, spin-off, split-off, close, convey or otherwise dispose of any assets or rights of the Company or any Subsidiary owned or hereafter acquired whether in a single transaction or a series of related transactions, other than (i) sales, leases, licenses, assignments, transfers, conveyances and other dispositions of such assets or rights by the Company and its Subsidiaries in the ordinary course of business consistent with its past practice and (ii) sales of inventory and product in the ordinary course of business.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Maturity of Indebtedness</u>. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, permit any Indebtedness of the Company or any of its Subsidiaries to mature (other than Permitted GPU Indebtedness) or accelerate prior to the Maturity Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Preservation of Existence, Etc.</u> The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, its existence, rights and privileges, and become or remain, and cause each of its Subsidiaries to become or remain, duly qualified and in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Maintenance of Properties, Etc.</u> The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, all of its properties which are necessary or useful in the proper conduct of its business in good working order and condition, ordinary wear and tear excepted, and comply, and cause each of its Subsidiaries to comply, at all times with the provisions of all leases to which it is a party as lessee or under which it occupies property, so as to prevent any loss or forfeiture thereof or thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Maintenance of Intellectual Property</u>. The Company will, and will cause each of its Subsidiaries to, take all action necessary or advisable to maintain all of the Intellectual Property Rights (as defined in the Securities Purchase Agreement) of the Company and/or any of its Subsidiaries that are necessary or material to the conduct of its business in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>Maintenance of Insurance</u>. The Company shall maintain, and cause each of its Subsidiaries to maintain, insurance with responsible and reputable insurance companies or associations (including, without limitation, comprehensive general liability, hazard, rent and business interruption insurance) with respect to its properties (including all real properties leased or owned by it) and business, in such amounts and covering such risks as is required by any governmental authority having jurisdiction with respect thereto or as is carried generally in accordance with sound business practice by companies in similar businesses similarly situated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>Transactions with Affiliates</u>. The Company shall not, nor shall it permit any of its Subsidiaries to, enter into, renew, extend or be a party to, any transaction or series of related transactions (including, without limitation, the purchase, sale, lease, transfer or exchange of property or assets of any kind or the rendering of services of any kind) with any affiliate, except transactions in the ordinary course of business in a manner and to an extent consistent with past practice and necessary or desirable for the prudent operation of its business, for fair consideration and on terms no less favorable to it or its Subsidiaries than would be obtainable in a comparable arm's length transaction with a Person that is not an affiliate thereof.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) <u>Restricted Issuances</u>. The Company shall not, directly or indirectly, without the prior written consent of the holders of a majority in aggregate principal amount of the Notes then outstanding, (i) issue any Notes (other than as contemplated by the Securities Purchase Agreement and the Notes) or (ii) issue any other securities that would cause a breach or default under the Notes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) <u>Stay, Extension and Usury Laws</u>. To the extent that it may lawfully do so, the Company (A) agrees that it will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law (wherever or whenever enacted or in force) that may affect the covenants or the performance of this Note; and (B) expressly waives all benefits or advantages of any such law and agrees that it will not, by resort to any such law, hinder, delay or impede the execution of any power granted to the Holder by this Note, but will suffer and permit the execution of every such power as though no such law has been enacted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) <u>Taxes</u>. The Company and its Subsidiaries shall pay when due all taxes, fees or other charges of any nature whatsoever (together with any related interest or penalties) now or hereafter imposed or assessed against the Company and its Subsidiaries or their respective assets or upon their ownership, possession, use, operation or disposition thereof or upon their rents, receipts or earnings arising therefrom (except where the failure to pay would not, individually or in the aggregate, have a material effect on the Company or any of its Subsidiaries). The Company and its Subsidiaries shall file on or before the due date therefor all personal property tax returns (except where the failure to file would not, individually or in the aggregate, have a material effect on the Company or any of its Subsidiaries). Notwithstanding the foregoing, the Company and its Subsidiaries may contest, in good faith and by appropriate proceedings, taxes for which they maintain adequate reserves therefor in accordance with GAAP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) <u>Financial Tests; Announcement of Operating Results</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Minimum Liquidity Test</u>. At any time any Notes remain outstanding, the Company's Available Cash as of the last calendar day in each Fiscal Quarter (each, a "**Fiscal Period Measuring Date**") shall equal or exceed $4,750,000 (the "**Minimum Liquidity Test**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Permitted Parent Guaranty Test</u>. With respect to any given Permitted GPU Indebtedness in which the Company has provided a Permitted Parent Guaranty, as of each of: (A) the date of execution of such Permitted Parent Guaranty (or with respect to the Permitted B300 Cluster Financing, the Permitted B300 Initial Shipping Date, as applicable) and (B) each Fiscal Period Measuring Date (each, a "**Financial Covenant Measuring Date**"), the aggregate amount of such Permitted GPU Indebtedness shall not exceed the lower of (x) 20x of the trailing quarterly gross profit (as reported in accordance with GAAP, consistent with past practices) of the Company as of such Financial Covenant Measuring Date and (y) 10x of the trailing six (6) month period gross profit (as reported in accordance with GAAP, consistent with past practices) of the Company as of such Financial Covenant Measuring Date (each, a "**Permitted Parent Guaranty Test**").

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) <u>Book Value Ratio Test</u>. With respect to any given Permitted B300 Cluster Financing, as of each Financial Covenant Measuring Date, the aggregate amount of such applicable Permitted GPU Indebtedness shall not exceed 75% of the Permitted B300 GPU Project Asset Book Value as of such Financial Covenant Measuring Date (each, a "**Book Value Ratio Test**", and together with the Minimum Liquidity Test and the Permitted Parent Guaranty Test, each a "**Financial Test**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Operating Results Announcement</u>. Commencing on the initial Financial Covenant Measuring Date, the Company shall publicly disclose and disseminate (such date, the "**Announcement Date**"), if any Financial Test has not been satisfied for such Fiscal Quarter or Fiscal Year, as applicable, a statement to that effect no later than the tenth (10<sup>th</sup>) day after the end of such Fiscal Quarter or Fiscal Year, as applicable, and such announcement shall include a statement to the effect that the Company is (or is not, as applicable) in breach of any Financial Test for such Fiscal Quarter or Fiscal Year, as applicable. On the Announcement Date, the Company shall also provide to the Holder a certification, executed on behalf of the Company by the Chief Financial Officer of the Company, certifying that the Company satisfied each Financial Test for such Fiscal Quarter or Fiscal Year, as applicable, if that is the case. If the Company has failed to meet one or more Financial Tests for a Fiscal Quarter or Fiscal Year, as applicable, (each a "**Financial Covenant Failure**"), on or prior to the Announcement Date, the Company shall provide to the Holders a written certification, executed on behalf of the Company by the Chief Financial Officer of the Company, certifying which Financial Test(s) have not been met for such Fiscal Quarter or Fiscal Year, as applicable (a "**Financial Covenant Failure Notice**"). Concurrently with the delivery of each Financial Covenant Failure Notice to the Holders, the Company shall also make publicly available (as part of a Quarterly Report on Form 10-Q, Annual Report on Form 10-K or on a Current Report on Form 8-K, or otherwise) the Financial Covenant Failure Notice and the fact that an Event of Default has occurred under the Notes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) <u>Independent Investigation</u>. At the request of the Holder either (x) at any time when an Event of Default has occurred and is continuing, (y) upon the occurrence of an event that with the passage of time or giving of notice would constitute an Event of Default or (z) at any time the Holder reasonably believes an Event of Default may have occurred or be continuing, the Company shall hire an independent, reputable investment bank selected by the Company and approved by the Holder to investigate as to whether any breach of this Note has occurred (the "**Independent Investigator**"). If the Independent Investigator determines that such breach of this Note has occurred, the Independent Investigator shall notify the Company of such breach and the Company shall deliver written notice to each holder of a Note of such breach. In connection with such investigation, the Independent Investigator may, during normal business hours, inspect all contracts, books, records, personnel, offices and other facilities and properties of the Company and its Subsidiaries and, to the extent available to the Company after the Company uses reasonable efforts to obtain them, the records of its legal advisors and accountants (including the accountants' work papers) and any books of account, records, reports and other papers not contractually required of the Company to be confidential or secret, or subject to attorney-client or other evidentiary privilege, and the Independent Investigator may make such copies and inspections thereof as the Independent Investigator may reasonably request. The Company shall furnish the Independent Investigator with such financial and operating data and other information with respect to the business and properties of the Company as the Independent Investigator may reasonably request. The Company shall permit the Independent Investigator to discuss the affairs, finances and accounts of the Company with, and to make proposals and furnish advice with respect thereto to, the Company's officers, directors, key employees and independent public accountants or any of them (and by this provision the Company authorizes said accountants to discuss with such Independent Investigator the finances and affairs of the Company and any Subsidiaries), all at such reasonable times, upon reasonable notice, and as often as may be reasonably requested.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. <u>SECURITY</u>. This Note and the Other Notes are secured to the extent and in the manner set forth in the Transaction Documents (including, without limitation, the Security Agreement, the other Security Documents).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. <u>DISTRIBUTION OF ASSETS</u>. In addition to any adjustments pursuant to Sections 6(a) or 7, if the Company shall declare or make any dividend or other distributions of its assets (or rights to acquire its assets) to any or all holders of shares of Common Stock, by way of return of capital or otherwise (including without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (the "**Distributions**"), then the Holder will be entitled to such Distributions as if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without taking into account any limitations or restrictions on the convertibility of this Note and assuming for such purpose that the Note was converted at the Alternate Conversion Price as of the applicable record date) immediately prior to the date on which a record is taken for such Distribution or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for such Distributions (provided, however, that to the extent that the Holder's right to participate in any such Distribution would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution to the extent of the Maximum Percentage (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Distribution (and beneficial ownership) to the extent of any such excess) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time or times, if ever, as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such Distribution (and any Distributions declared or made on such initial Distribution or on any subsequent Distribution held similarly in abeyance) to the same extent as if there had been no such limitation).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. <u>AMENDING THE TERMS OF THIS NOTE</u>. Except for Section 3(d) and this Section 18, which may not be amended, modified or waived by the parties hereto, the prior written consent of the Holder shall be required for any change, waiver or amendment to this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19. <u>TRANSFER</u>. This Note and any shares of Common Stock issued upon conversion of this Note may be offered, sold, assigned or transferred by the Holder without the consent of the Company, subject only to the provisions of Section 2(g) of the Securities Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20. <u>REISSUANCE OF THIS NOTE</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Transfer</u>. If this Note is to be transferred, the Holder shall surrender this Note to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Note (in accordance with Section 20(d)), registered as the Holder may request, representing the outstanding Principal being transferred by the Holder and, if less than the entire outstanding Principal is being transferred, a new Note (in accordance with Section 20(d)) to the Holder representing the outstanding Principal not being transferred. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of Section 3(c)(iii) following conversion or redemption of any portion of this Note, the outstanding Principal represented by this Note may be less than the Principal stated on the face of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Lost, Stolen or Mutilated Note</u>. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Note (as to which a written certification and the indemnification contemplated below shall suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company shall execute and deliver to the Holder a new Note (in accordance with Section 20(d)) representing the outstanding Principal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Note Exchangeable for Different Denominations</u>. This Note is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Note or Notes (in accordance with Section 20(d) and in principal amounts of at least $1,000) representing in the aggregate the outstanding Principal of this Note, and each such new Note will represent such portion of such outstanding Principal as is designated by the Holder at the time of such surrender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Issuance of New Notes</u>. Whenever the Company is required to issue a new Note pursuant to the terms of this Note, such new Note (i) shall be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding (or in the case of a new Note being issued pursuant to Section 20(a) or Section 20(c), the Principal designated by the Holder which, when added to the principal represented by the other new Notes issued in connection with such issuance, does not exceed the Principal remaining outstanding under this Note immediately prior to such issuance of new Notes), (iii) shall have an issuance date, as indicated on the face of such new Note, which is the same as the Issuance Date of this Note, (iv) shall have the same rights and conditions as this Note, and (v) shall represent accrued and unpaid Interest and Late Charges on the Principal, Make-Whole Amount and Interest of this Note, from the Issuance Date.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21. <u>REMEDIES, CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF</u>. The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder's right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Note. No failure on the part of the Holder to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise by the Holder of any right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. In addition, the exercise of any right or remedy of the Holder at law or equity or under this Note or any of the documents shall not be deemed to be an election of Holder's rights or remedies under such documents or at law or equity. The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to specific performance and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of competent jurisdiction in any such case without the necessity of proving actual damages and without posting a bond or other security. The Company shall provide all information and documentation to the Holder that is requested by the Holder to enable the Holder to confirm the Company's compliance with the terms and conditions of this Note (including, without limitation, compliance with Section 7).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22. <u>PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER COSTS</u>. If (a) this Note is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this Note or to enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization, receivership of the Company or other proceedings affecting Company creditors' rights and involving a claim under this Note, then the Company shall pay the costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including, without limitation, attorneys' fees and disbursements. The Company expressly acknowledges and agrees that no amounts due under this Note shall be affected, or limited, by the fact that the purchase price paid for this Note was less than the original Principal amount hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23. <u>CONSTRUCTION; HEADINGS</u>. This Note shall be deemed to be jointly drafted by the Company and the initial Holder and shall not be construed against any such Person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part of, or affect the interpretation of, this Note. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter, singular and plural forms thereof. The terms "including," "includes," "include" and words of like import shall be construed broadly as if followed by the words "without limitation." The terms "herein," "hereunder," "hereof" and words of like import refer to this entire Note instead of just the provision in which they are found. Unless expressly indicated otherwise, all section references are to sections of this Note. Terms used in this Note and not otherwise defined herein, but defined in the other Transaction Documents, shall have the meanings ascribed to such terms on the Initial Closing Date in such other Transaction Documents unless otherwise consented to in writing by the Holder.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24. <u>FAILURE OR INDULGENCE NOT WAIVER</u>. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party. Notwithstanding the foregoing, nothing contained in this Section 24 shall permit any waiver of any provision of Section 3(d).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25. <u>DISPUTE RESOLUTION</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Submission to Dispute Resolution</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) In the case of a dispute relating to a Closing Bid Price, a Closing Sale Price, a Conversion Price, an Installment Conversion Price, an Acceleration Conversion Price, an Alternate Conversion Price, a Black Scholes Consideration Value, a VWAP or a fair market value or the arithmetic calculation of a Conversion Rate, or the applicable Redemption Price (as the case may be) (including, without limitation, a dispute relating to the determination of any of the foregoing), the Company or the Holder (as the case may be) shall submit the dispute to the other party via electronic mail (A) if by the Company, within two (2) Business Days after the occurrence of the circumstances giving rise to such dispute or (B) if by the Holder at any time after the Holder learned of the circumstances giving rise to such dispute. If the Holder and the Company are unable to promptly resolve such dispute relating to such Closing Bid Price, such Closing Sale Price, such Conversion Price, such Installment Conversion Price, such Acceleration Conversion Price, such Alternate Conversion Price, such Black Scholes Consideration Value, such VWAP or such fair market value, or the arithmetic calculation of such Conversion Rate or such applicable Redemption Price (as the case may be), at any time after the first (1<sup>st</sup>) Business Day following such initial notice by the Company or the Holder (as the case may be) of such dispute to the Company or the Holder (as the case may be), then the Holder may, at its sole option, select an independent, reputable investment bank to resolve such dispute.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered in accordance with the first sentence of this Section 25 and (B) written documentation supporting its position with respect to such dispute, in each case, no later than 5:00 p.m. (New York time) by the fifth (5<sup>th</sup>) Business Day immediately following the date on which the Holder selected such investment bank (the "**Dispute Submission Deadline**") (the documents referred to in the immediately preceding clauses (A) and (B) are collectively referred to herein as the "**Required Dispute Documentation**") (it being understood and agreed that if either the Holder or the Company fails to so deliver all of the Required Dispute Documentation by the Dispute Submission Deadline, then the party who fails to so submit all of the Required Dispute Documentation shall no longer be entitled to (and hereby waives its right to) deliver or submit any written documentation or other support to such investment bank with respect to such dispute and such investment bank shall resolve such dispute based solely on the Required Dispute Documentation that was delivered to such investment bank prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by both the Company and the Holder or otherwise requested by such investment bank, neither the Company nor the Holder shall be entitled to deliver or submit any written documentation or other support to such investment bank in connection with such dispute (other than the Required Dispute Documentation).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Company and the Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company and the Holder of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline. The fees and expenses of such investment bank shall be borne solely by the Company, and such investment bank's resolution of such dispute shall be final and binding upon all parties absent manifest error.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Miscellaneous</u>. The Company expressly acknowledges and agrees that (i) this Section 25 constitutes an agreement to arbitrate between the Company and the Holder (and constitutes an arbitration agreement) under the Delaware Uniform Arbitration Act, as amended, (ii) a dispute relating to a Conversion Price includes, without limitation, disputes as to (A) whether an issuance or sale or deemed issuance or sale of Common Stock occurred under Section 7(a), (B) the consideration per share at which an issuance or deemed issuance of Common Stock occurred, (C) whether any issuance or sale or deemed issuance or sale of Common Stock was an issuance or sale or deemed issuance or sale of Excluded Securities, (D) whether an agreement, instrument, security or the like constitutes and Option or Convertible Security and (E) whether a Dilutive Issuance occurred, (iii) the terms of this Note and each other applicable Transaction Document shall serve as the basis for the selected investment bank's resolution of the applicable dispute, such investment bank shall be entitled (and is hereby expressly authorized) to make all findings, determinations and the like that such investment bank determines are required to be made by such investment bank in connection with its resolution of such dispute and in resolving such dispute such investment bank shall apply such findings, determinations and the like to the terms of this Note and any other applicable Transaction Documents, (iv) the Holder (and only the Holder), in its sole discretion, shall have the right to submit any dispute described in this Section 25 to any state or federal court sitting in Wilmington, Delaware in lieu of utilizing the procedures set forth in this Section 25 and (v) nothing in this Section 25 shall limit the Holder from obtaining any injunctive relief or other equitable remedies (including, without limitation, with respect to any matters described in this Section 25).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;26. <u>NOTICES; CURRENCY; PAYMENTS</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Notices</u>. Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given in accordance with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Note, including in reasonable detail a description of such action and the reason therefore. Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon any adjustment of the Conversion Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the Common Stock, (B) with respect to any grant, issuances, or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Currency</u>. All dollar amounts referred to in this Note are in United States Dollars ("**U.S. Dollars**"), and all amounts owing under this Note shall be paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall be converted into the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. "**Exchange Rate**" means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Note, the U.S. Dollar exchange rate as published in the Wall Street Journal on the relevant date of calculation (it being understood and agreed that where an amount is calculated with reference to, or over, a period of time, the date of calculation shall be the final date of such period of time).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Payments</u>. Whenever any payment of cash is to be made by the Company to any Person pursuant to this Note, unless otherwise expressly set forth herein, such payment shall be made in lawful money of the United States of America by a certified check drawn on the account of the Company and sent via overnight courier service to such Person at such address as previously provided to the Company in writing (which address, in the case of each of the Buyers, shall initially be as set forth on the Schedule of Buyers attached to the Securities Purchase Agreement), provided that the Holder may elect to receive a payment of cash via wire transfer of immediately available funds by providing the Company with prior written notice setting out such request and the Holder's wire transfer instructions. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a Business Day, the same shall instead be due on the next succeeding day which is a Business Day. Any amount of Principal or other amounts due under the Transaction Documents which is not paid when due shall result in a late charge being incurred and payable by the Company in an amount equal to interest on such amount at the rate of eighteen percent (18%) per annum from the date such amount was due until the same is paid in full ("**Late Charge**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;27. <u>CANCELLATION</u>. After all Principal, Make-Whole Amount, accrued Interest, Late Charges and other amounts at any time owed on this Note have been paid in full, this Note shall automatically be deemed canceled, shall be surrendered to the Company for cancellation and shall not be reissued.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;28. <u>WAIVER OF NOTICE</u>. To the extent permitted by law, the Company hereby irrevocably waives demand, notice, presentment, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note and the Securities Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;29. <u>GOVERNING LAW</u>. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Note shall be governed by, the internal laws of the State of Delaware, without giving effect to any provision or rule (whether of the State of Delaware or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Delaware. Except as otherwise required by Section 25 above, the Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in Wilmington, Delaware, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein (i) shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company's obligations to the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the Holder or (ii) shall limit, or shall be deemed or construed to limit, any provision of Section 25. **THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;30. <u>JUDGMENT CURRENCY</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If for the purpose of obtaining or enforcing judgment against the Company in any court in any jurisdiction it becomes necessary to convert into any other currency (such other currency being hereinafter in this Section 30 referred to as the "**Judgment Currency**") an amount due in U.S. dollars under this Note, the conversion shall be made at the Exchange Rate prevailing on the Trading Day immediately preceding:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 date actual payment of the amount due, in the case of any proceeding in the courts of Delaware or in the courts of any other jurisdiction that will give effect to such conversion being made on such date: or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as of which such conversion is made pursuant to this Section 30(a)(ii) being hereinafter referred to as the "**Judgment Conversion Date**").

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If in the case of any proceeding in the court of any jurisdiction referred to in Section 30(a)(ii) above, there is a change in the Exchange Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable party shall pay such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the Exchange Rate prevailing on the date of payment, will produce the amount of US dollars which could have been purchased with the amount of Judgment Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Any amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being obtained for any other amounts due under or in respect of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;31. <u>SEVERABILITY</u>. If any provision of this Note is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Note so long as this Note as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;32. <u>MAXIMUM PAYMENTS</u>. Without limiting Section 9(d) of the Securities Purchase Agreement, nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Company to the Holder and thus refunded to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;33. <u>CERTAIN DEFINITIONS</u>. For purposes of this Note, the following terms shall have the following meanings:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) "**1933 Act**" means the Securities Act of 1933, as amended, and the rules and regulations thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) "**1934 Act**" means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) "**Acceleration Conversion Price**" means, with respect to any given Acceleration Date, the lower of (i) the Installment Conversion Price for such Current Installment Date related to such Acceleration Date and (ii) 93% of the lowest VWAP of the Common Stock for any Trading Day during the eight (8) consecutive Trading Day period ending on, and including, the Trading Day immediately prior to the applicable Acceleration Date and (II) solely respect to any Deferral Amount subject to an Acceleration, the lowest Acceleration Conversion Price of any Installment Date in which such Deferral Amount has been Deferred hereunder (each, a "**Current Acceleration Conversion Price**"), shall replace such Current Acceleration Conversion Price for any Acceleration of such Deferral Amount hereunder. All such determinations to be appropriately adjusted for any stock split, stock dividend, stock combination or other similar transaction during any such measuring period.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) "**Adjustment Right**" means any right granted with respect to any securities issued in connection with, or with respect to, any issuance or sale (or deemed issuance or sale in accordance with Section 7) of shares of Common Stock (other than rights of the type described in Section 6(a) hereof) that could result in a decrease in the net consideration received by the Company in connection with, or with respect to, such securities (including, without limitation, any cash settlement rights, cash adjustment or other similar rights).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) "**Affiliate**" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person, it being understood for purposes of this definition that "control" of a Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) "**Alternate Conversion Price**" means, with respect to any Alternate Conversion that price which shall be the lowest of (i) the applicable Conversion Price as in effect on the applicable Conversion Date of the applicable Alternate Conversion, and (ii) 85% of the lowest VWAP of the Common Stock during the eight (8) consecutive Trading Day period ending and including the Trading Day immediately preceding the delivery or deemed delivery of the applicable Conversion Notice (such period, the "**Alternate Conversion Measuring Period**"). All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction that proportionately decreases or increases the Common Stock during such Alternate Conversion Measuring Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) "**Applicable Closing Date**" means the Closing Date (as defined in the Securities Purchase Agreement) that the Company initially issued this Note pursuant to the terms of the Securities Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) "**Approved Stock Plan**" means any employee benefit plan which has been approved by the board of directors of the Company prior to or subsequent to the Subscription Date pursuant to which shares of Common Stock and standard options to purchase Common Stock may be issued to any employee, officer or director for services provided to the Company in their capacity as such.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) "**Attribution Parties**" means, collectively, the following Persons and entities: (i) any investment vehicle, including, any funds, feeder funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed or advised by the Holder's investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or any of the foregoing and (iv) any other Persons whose beneficial ownership of the Company's Common Stock would or could be aggregated with the Holder's and the other Attribution Parties for purposes of Section 13(d) of the 1934 Act. For clarity, the purpose of the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) "**Available Cash**" means, with respect to any date of determination, an amount equal to the aggregate amount of the Cash of the Company and its Subsidiaries (excluding for this purpose cash held in restricted accounts or otherwise unavailable for unrestricted use by the Company or any of its Subsidiaries for any reason) as of such date of determination held in bank accounts of financial banking institutions in the United States of America.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) "**Black Scholes Consideration Value**" means the value of the applicable Option, Convertible Security or Adjustment Right (as the case may be) as of the date of issuance thereof calculated using the Black Scholes Option Pricing Model obtained from the "OV" function on Bloomberg utilizing (i) an underlying price per share equal to the Closing Sale Price of the Common Stock on the Trading Day immediately preceding the public announcement of the execution of definitive documents with respect to the issuance of such Option, Convertible Security or Adjustment Right (as the case may be), (ii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of such Option, Convertible Security or Adjustment Right (as the case may be) as of the date of issuance of such Option, Convertible Security or Adjustment Right (as the case may be), (iii) a zero cost of borrow and (iv) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the "HVT" function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following the date of issuance of such Option, Convertible Security or Adjustment Right (as the case may be).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) "**Bloomberg**" means Bloomberg, L.P.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) "**Business Day**" means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed; <u>provided</u>, <u>however</u>, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to "stay at home", "shelter-in-place", "non-essential employee" or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally are open for use by customers on such day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) "**Cash**" of the Company and its Subsidiaries on any date shall be determined from such Persons' books maintained in accordance with GAAP, and means, without duplication, cash, cash equivalents (excluding any cryptocurrencies or any other digital currencies) and treasury bonds issued by the United States of America, accrued by the Company and its wholly owned Subsidiaries on a consolidated basis on such date, and the aggregate amount of any accounts receivable (to the extent less than 30 days from invoice date).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) "**Change of Control**" means any Fundamental Transaction other than (i) any merger of the Company or any of its, direct or indirect, wholly-owned Subsidiaries with or into any of the foregoing Persons, (ii) any reorganization, recapitalization or reclassification of the shares of Common Stock in which holders of the Company's voting power immediately prior to such reorganization, recapitalization or reclassification continue after such reorganization, recapitalization or reclassification to hold publicly traded securities and, directly or indirectly, are, in all material respects, the holders of the voting power of the surviving entity (or entities with the authority or voting power to elect the members of the board of directors (or their equivalent if other than a corporation) of such entity or entities) after such reorganization, recapitalization or reclassification or (iii) pursuant to a migratory merger effected solely for the purpose of changing the jurisdiction of incorporation of the Company or any of its Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) "**Closing Bid Price**" and "**Closing Sale Price**" means, for any security as of any date, the last closing bid price and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price (as the case may be) then the last bid price or last trade price, respectively, of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported in The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices). If the Closing Bid Price or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price or the Closing Sale Price (as the case may be) of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 25. All such determinations shall be appropriately adjusted for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions during such period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) "**Common Stock**" means (i) the Company's shares of common stock, no par value per share, and (ii) any capital stock into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) "**Convertible Securities**" means any stock or other security (other than Options) that is at any time and under any circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any shares of Common Stock.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) "**Current Subsidiary**" means any Person in which the Company on the Subscription Date, directly or indirectly, (i) owns any of the outstanding capital stock or holds any equity or similar interest of such Person or (ii) controls or operates all or any part of the business, operations or administration of such Person, and all of the foregoing, collectively, "**Current Subsidiaries**".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) "**Default Rate**" means, with respect to any determination of the aggregate amount of outstanding accrued and unpaid Interest hereunder, eighteen percent (18%) per annum.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) "**Eligible Market**" means The New York Stock Exchange, the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Select Market or the Nasdaq Global Market.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) "**Equity Conditions**" means, with respect to an given date of determination: (i) on each day during the period beginning thirty calendar days prior to such applicable date of determination and ending on and including such applicable date of determination either (x) one or more Registration Statements filed pursuant to the Registration Rights Agreement shall be effective and the prospectus contained therein shall be available on such applicable date of determination (with, for the avoidance of doubt, any shares of Common Stock previously sold pursuant to such prospectus deemed unavailable) for the resale of all shares of Common Stock to be issued in connection with the event requiring this determination (or issuable upon conversion of the Conversion Amount being redeemed, as applicable, in the event requiring this determination at the Alternate Conversion Price then in effect (without regard to any limitations on conversion set forth herein)) (each, a "**Required Minimum Securities Amount**"), in each case, in accordance with the terms of the Registration Rights Agreement and there shall not have been during such period any Grace Periods (as defined in the Registration Rights Agreement) or (y) all Registrable Securities shall be eligible for sale pursuant to Rule 144 (as defined in the Securities Purchase Agreement) without the need for registration under any applicable federal or state securities laws (in each case, disregarding any limitation on conversion of the Notes, other issuance of securities with respect to the Notes) and no Current Public Information Failure (as defined in the Registration Rights Agreement) exists or is continuing; (ii) on each day during the period beginning thirty calendar days prior to the applicable date of determination and ending on and including the applicable date of determination (the "**Equity Conditions Measuring Period**"), the Common Stock (including all Registrable Securities) is listed or designated for quotation (as applicable) on an Eligible Market and shall not have been suspended from trading on an Eligible Market (other than suspensions of not more than two (2) days and occurring prior to the applicable date of determination due to business announcements by the Company) nor shall delisting or suspension by an Eligible Market have been threatened (with a reasonable prospect of delisting occurring after giving effect to all applicable notice, appeal, compliance and hearing periods) or reasonably likely to occur or pending as evidenced by (A) a writing by such Eligible Market or (B) the Company falling below the minimum listing maintenance requirements of the Eligible Market on which the Common Stock is then listed or designated for quotation (as applicable); (iii) during the Equity Conditions Measuring Period, the Company shall have delivered all shares of Common Stock issuable upon conversion of this Note on a timely basis as set forth in Section 3 hereof and all other shares of capital stock required to be delivered by the Company on a timely basis as set forth in the other Transaction Documents; (iv) any shares of Common Stock to be issued in connection with the event requiring determination (or issuable upon conversion of the Conversion Amount being redeemed in the event requiring this determination) may be issued in full without violating Section 3(d) hereof; (v) any shares of Common Stock to be issued in connection with the event requiring determination (or issuable upon conversion of the Conversion Amount being redeemed in the event requiring this determination (without regards to any limitations on conversion set forth herein)) may be issued in full without violating the rules or regulations of the Eligible Market on which the Common Stock is then listed or designated for quotation (as applicable); (vi) on each day during the Equity Conditions Measuring Period, no public announcement of a pending, proposed or intended Fundamental Transaction shall have occurred which has not been abandoned, terminated or consummated; (vii) the Company shall have no knowledge of any fact that would reasonably be expected to cause (1) any Registration Statement required to be filed pursuant to the Registration Rights Agreement to not be effective or the prospectus contained therein to not be available for the resale of the applicable Required Minimum Securities Amount of Registrable Securities in accordance with the terms of the Registration Rights Agreement or (2) any Registrable Securities to not be eligible for sale pursuant to Rule 144 without the need for registration under any applicable federal or state securities laws (in each case, disregarding any limitation on conversion of the Notes, other issuance of securities with respect to the Notes) and no Current Public Information Failure exists or is continuing; (viii) the Holder shall not be in (and no other holder of Notes shall be in) possession of any material, non-public information provided to any of them by the Company, any of its Subsidiaries or any of their respective affiliates, employees, officers, representatives, agents or the like; (ix) on each day during the Equity Conditions Measuring Period, the Company otherwise shall have been in compliance with each, and shall not have breached any representation or warranty in any material respect (other than representations or warranties subject to material adverse effect or materiality, which may not be breached in any respect) or any covenant or other term or condition of any Transaction Document, including, without limitation, the Company shall not have failed to timely make any payment pursuant to any Transaction Document; (x) on each Trading Day during the Equity Conditions Measuring Period, there shall not have occurred any Volume Failure or Price Failure as of such applicable date of determination; (xi) on the applicable date of determination (A) no Authorized Share Failure shall exist or be continuing and the applicable Required Minimum Securities Amount of shares of Common Stock are available under the certificate of incorporation of the Company and reserved by the Company to be issued pursuant to the Notes and (B) all shares of Common Stock to be issued in connection with the event requiring this determination (or issuable upon conversion of the Conversion Amount being redeemed in the event requiring this determination (without regards to any limitations on conversion set forth herein)) may be issued in full without resulting in an Authorized Share Failure; (xii) on each day during the Equity Conditions Measuring Period, there shall not have occurred and there shall not exist an Event of Default or an event that with the passage of time or giving of notice would constitute an Event of Default; (xiii) no bone fide dispute shall exist, by and between any of holder of Notes, the Company, the Principal Market (or such applicable Eligible Market in which the Common Stock of the Company is then principally trading) and/or FINRA with respect to any term or provision of any Note or any other Transaction Document and (xiv) the shares of Common Stock issuable pursuant the event requiring the satisfaction of the Equity Conditions are duly authorized and listed and eligible for trading without restriction on an Eligible Market.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w) "**Equity Conditions Failure**" means that on any day during the period commencing twenty (20) Trading Days prior to the applicable date of determination, the Equity Conditions have not been satisfied (or waived in writing by the Holder).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) "**Equity Failure Triggering Event**" means, as of any time of determination, (x) an Equity Conditions Failure then exists or is continuing as of such time of determination, (y) at least three (3) Conversion Failures have occurred hereunder on or prior to such time of determination and/or (z) a Conversion Failure has occurred and is continuing as of such time of determination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y) "**Event Market Price**" means, with respect to any Stock Combination Event Date, the quotient determined by dividing (x) the sum of the VWAP of the Common Stock for each of the five (5) Trading Days with the lowest VWAP of the Common Stock during the fifteen (15) consecutive Trading Day period ending and including the Trading Day immediately preceding the sixteenth (16th) Trading Day after such Stock Combination Event Date, divided by (y) five (5).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(z) "**Excluded Securities**" means (i) shares of Common Stock or standard options to purchase Common Stock issued to directors, officers or employees of the Company for services rendered to the Company in their capacity as such pursuant to an Approved Stock Plan (as defined above), provided that (A) all such issuances (taking into account the shares of Common Stock issuable upon exercise of such options) after the Subscription Date pursuant to this clause (i) do not, in the aggregate, exceed more than 5% of the Common Stock issued and outstanding immediately prior to the Subscription Date and (B) the exercise price of any such options is not lowered, none of such options are amended to increase the number of shares issuable thereunder and none of the terms or conditions of any such options are otherwise materially changed in any manner that adversely affects any of the Buyers; (ii) shares of Common Stock issued upon the conversion or exercise of Convertible Securities or Options (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) issued prior to the Subscription Date, provided that the conversion price of any such Convertible Securities (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) is not lowered, none of such Convertible Securities or Options (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) are amended to increase the number of shares issuable thereunder and none of the terms or conditions of any such Convertible Securities or Options (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) are otherwise materially changed in any manner that adversely affects any of the Buyers; and (iii) the shares of Common Stock issuable upon conversion of the Notes or otherwise pursuant to the terms of the Notes; provided, that the terms of the Notes are not amended, modified or changed on or after the Subscription Date (other than antidilution adjustments pursuant to the terms thereof in effect as of the Subscription Date).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aa) "**Fiscal Quarter**" means each of the fiscal quarters adopted by the Company for financial reporting purposes that correspond to the Company's fiscal year as of the date hereof that ends on June 30.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bb) "**Fiscal Year**" means the fiscal year adopted by the Company for financial reporting purposes as of the date hereof that ends on June 30.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(cc) "**Fundamental Transaction**" means (A) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company or any of its "significant subsidiaries" (as defined in Rule 1-02 of Regulation S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject to or have its Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange offer that is accepted by the holders of more than either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated with any Subject Entities making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares of Common Stock such that all Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of more than 50% of the outstanding shares of Common Stock, or (iv) consummate a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Subject Entities whereby all such Subject Entities, individually or in the aggregate, acquire in any transaction or series or related transactions, either (x) more than 50% of the outstanding shares of Common Stock, (y) more than 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of more than 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its Common Stock, (B) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the "beneficial owner" (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance, tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination, reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner whatsoever, of either (x) more than 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock, (y) more than 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock not held by all such Subject Entities as of the date of this Note calculated as if any shares of Common Stock held by all such Subject Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock or other equity securities of the Company sufficient to allow such Subject Entities to effect a statutory short form merger or other transaction requiring other stockholders of the Company to surrender their shares of Common Stock without approval of the stockholders of the Company or (C) directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, the issuance of or the entering into any other instrument or transaction structured in a manner to circumvent, or that circumvents, the intent of this definition in which case this definition shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary to correct this definition or any portion of this definition which may be defective or inconsistent with the intended treatment of such instrument or transaction.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(dd) "**GAAP**" means United States generally accepted accounting principles, consistently applied.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ee) "**GPU**" means Graphics Processing Units.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ff) "**GPU Project**" means any project of a Project Subsidiary to acquire GPU Project Assets for the business of such Project Subsidiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(gg) "**GPU Project Assets**" means, with respect to any GPU Project of any given Project Subsidiary, any GPUs, GPU servers, network cluster, storage, Kubernetes implementation, Power Distribution Units ("**PDUs**"), racks, deployment of Newsroom Control Systems ("**NRCSs**") and related assets necessary for such GPU Project.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(hh) "**Group**" means a "group" as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5 thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) "**Holder Pro Rata Amount**" means a fraction (i) the numerator of which is the original Principal amount of this Note on the Applicable Closing Date and (ii) the denominator of which is the aggregate original principal amount of all Notes issued to the initial purchasers pursuant to the Securities Purchase Agreement on the Applicable Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(jj) "**Indebtedness**" shall have the meaning ascribed to such term in the Securities Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(kk) "**Initial Closing Date**" shall have the meaning set forth in the Securities Purchase Agreement, which date is the date the Company initially issued Notes pursuant to the terms of the Securities Purchase Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ll) "**Initial Installment Notice Due Date**" means the later of (x) the Public Listing Date and (y) the Applicable Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(mm) "**Installment Amount**" means the sum of (A) (i) with respect to any Installment Date other than the Maturity Date, the lesser of (x) the quotient of (I) the Principal amount outstanding under this Note as of the initial Installment Date, divided by (II) the number of Installment Dates occurring hereunder (as determined as of the initial Installment Date assuming no Deferrals, Accelerations, redemptions or conversions hereunder prior to the Maturity Date) and (y) the Principal amount then outstanding under this Note as of such Installment Date, and (ii) with respect to the Installment Date that is the Maturity Date, the Principal amount then outstanding under this Note as of such Installment Date (in each case, as any such Installment Amount may be reduced pursuant to the terms of this Note, whether upon conversion, redemption or Deferral), (B) any Deferral Amount deferred pursuant to Section 8(d) and included in such Installment Amount in accordance therewith, (C) any Acceleration Amount accelerated pursuant to Section 8(e) and included in such Installment Amount in accordance therewith and (D) in each case of clauses (A) through (C) above, the sum of any accrued and unpaid Interest as of such Installment Date under this Note, if any, the applicable Make-Whole Amount with respect to such Installment Amount, if any, and accrued and unpaid Late Charges, if any, under this Note as of such Installment Date. In the event the Holder shall sell or otherwise transfer any portion of this Note, the transferee shall be allocated a pro rata portion of the each unpaid Installment Amount hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(nn) "**Installment Conversion Price**" means, with respect to a particular date of determination, the lower of (i) the Conversion Price then in effect, and (ii) 93% of the lowest VWAP of the Common Stock of any Trading Day during the eight (8) consecutive Trading Day period ending on, and including, the Trading Day immediately prior to the applicable Installment Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(oo) "**Installment Date**" means (i) the first Trading Day of the calendar month immediately after the Initial Installment Notice Due Date, and (ii) thereafter, the first Trading Day of the calendar month immediately following the previous Installment Date until the Maturity Date (but not including the Maturity Date).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(pp) "**Interest Date**" means, with respect to any given calendar month, (x) if prior to the initial Installment Date or after the Maturity Date, the first Trading Day of such calendar month or (y) if on or after the initial Installment Date, but on or prior to the Maturity Date, such Installment Date, if any, in such calendar month.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(qq) "**Interest Rate**" means seven percent (7%) per annum, as may be adjusted from time to time in accordance with Section 2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(rr) "**Investment**" means any beneficial ownership (including stock, partnership or limited liability company interests) of or in any Person, or any loan, advance or capital contribution to any Person or the acquisition of all, or substantially all, of the assets of another Person or the purchase of any assets of another Person for greater than the fair market value of such assets.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ss) "**Make-Whole Amount**" means, as of any given date and as applicable, in connection with any conversion, redemption or other repayment hereunder, an amount equal to the amount of additional Interest that would accrue under this Note at the Interest Rate then in effect assuming for calculation purposes that the outstanding Principal of this Note as of the Applicable Closing Date remained outstanding through and including the Maturity Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(tt) "**Material Subsidiary**" means any Subsidiary of the Company with at least $1 million in outstanding Indebtedness subject to a guaranty, in whole or in part, by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(uu) "**Maturity Date**" shall mean March 26, 2028; provided, however, the Maturity Date may be extended at the option of the Holder (i) in the event that, and for so long as, an Event of Default shall have occurred and be continuing or any event shall have occurred and be continuing that with the passage of time and the failure to cure would result in an Event of Default or (ii) through the date that is twenty (20) Business Days after the consummation of a Fundamental Transaction in the event that a Fundamental Transaction is publicly announced or a Change of Control Notice is delivered prior to the Maturity Date, provided further that if a Holder elects to convert some or all of this Note pursuant to Section 3 hereof, and the Conversion Amount would be limited pursuant to Section 3(d) hereunder, the Maturity Date shall automatically be extended until such time as such provision shall not limit the conversion of this; provided, that upon the Public Listing Date, so long as no Event of Default then exists (unless waived in writing by the Holder), the Maturity Date shall automatically be extended until the second anniversary of the Public Listing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vv) "**New Subsidiary**" means, as of any date of determination, any Person in which the Company after the Subscription Date, directly or indirectly, (i) owns or acquires any of the outstanding capital stock or holds any equity or similar interest of such Person or (ii) controls or operates all or any part of the business, operations or administration of such Person, and all of the foregoing, collectively, "**New Subsidiaries**".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ww) "**Options**" means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xx) "**Parent Entity**" of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(yy) "**Parent Guaranty Conditions**" means, with respect to any given Permitted Parent Guaranty of any given Permitted GPU Indebtedness, as of each Financial Covenant Measuring Date: (i) the Company must satisfy the Permitted Parent Guaranty Test, (ii) no Event of Default shall exist or be continuing, (iii) the gross proceeds of such Permitted GPU Indebtedness has been used (or will be used) solely to acquire GPU Project Assets, and (iv) the Company and such applicable Project Subsidiary shall have used reasonable best efforts to have the language attached hereto as <u>Schedule I</u> included in the definitive documentation with respect to such Permitted GPU Indebtedness being guaranteed, *mutatis mutandis*.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(zz) "**Permitted B300 Cluster Financing**" means a financing with Permitted GPU Indebtedness of a cluster of B300 GPUs in one or more GPU Projects of one or more Project Subsidiaries in which (i) the aggregate amount of such Permitted GPU Indebtedness does not exceed $75 million, (ii) the funding, in full, of such Permitted GPU Indebtedness shall occur prior to the Public Listing Date and (iii) by no later than the thirtieth (30<sup>th</sup>) calendar day after the date of shipping of any of the B300 GPUs in such Permitted GPU Indebtedness (the "**Permitted B300 Initial Shipping Date**"); provided that, at any time any Notes remain outstanding, the aggregate amount of such Permitted GPU Indebtedness shall not exceed seventy-five percent (75%) of the Permitted B300 GPU Project Asset Book Value.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aaa) "**Permitted B300 GPU Project Asset Book Value**" means the book value (as reported in accordance with GAAP, consistent with past practice) of the aggregate GPU Project Assets of a Permitted B300 Cluster Financing of all Project Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bbb) "**Permitted GPU Indebtedness**" means the lease or other Indebtedness of any Project Subsidiary to acquire GPU Project Assets in a GPU Project by such Project Subsidiary; provided, that (i) such Indebtedness is not subject to any direct or indirect guarantee by the Company (other than any Permitted Parent Guaranty with respect thereto) or any guaranty by any other Subsidiary, (ii) the collateral securing such Indebtedness shall solely consist of all, or any part, of the GPU Project Assets of such Project Subsidiary (and not any of the assets of the Company or any other Subsidiary) and (iii) the aggregate amount of any such Indebtedness, collectively, does not exceed $15 billion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ccc) "**Permitted Indebtedness**" means (i) Indebtedness evidenced by this Note and the Other Notes, (ii) Indebtedness set forth on Schedule 3(s) to the Securities Purchase Agreement, as in effect as of the Subscription Date, (iii) Indebtedness secured by Permitted Liens or unsecured but as described in clauses (iv) and (v) of the definition of Permitted Liens, (iv) any Permitted Parent Guaranty and (v) Permitted GPU Indebtedness.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(eee) "**Permitted Parent Guaranty**" means, with respect to any given Permitted GPU Indebtedness, a guaranty by the Company of such Permitted GPU Indebtedness; provided, that the Parent Guaranty Conditions with respect thereto are satisfied at all times at least an aggregate of $5 million of Notes remain outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(fff) "**Person**" means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity or a government or any department or agency thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ggg) "**Project Subsidiary**" means, with respect to any given GPU Project, the Subsidiary of the Company incurring such lease or other Indebtedness to finance the acquisition of GPU Project Assets by such Subsidiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(hhh) "**Price Failure**" means, with respect to a particular date of determination, the VWAP of the Common Stock on any Trading Day during the twenty (20) Trading Day period ending on the Trading Day immediately preceding such date of determination fails to exceed $5.00 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions occurring after the Subscription Date). All such determinations to be appropriately adjusted for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions during any such measuring period. Notwithstanding the foregoing, at any time, and for any period of time, as applicable, the Holder may lower any dollar threshold specified in this definition to any lower dollar threshold, in each case, as specified by the Holder in a written notice to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) "**Principal Market**" means the Nasdaq Capital Market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(jjj) "**Public Listing Date**" means such date after (x) the Common Stock of the Company is registered under Section 12(b) or 12(g) of the 1934 Act, (y) the Common Stock is listed on the Principal Market and (z) the Effective Date (as defined in the Registration Rights Agreement) of the initial Registration Statement (or, if earlier, such other date as the Holder shall elect in writing to the Company).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(kkk) "**Redemption Notices**" means, collectively, the Event of Default Redemption Notices, the Installment Notices with respect to any Installment Redemption, the Company Optional Redemption Notices, the Subsequent Placement Optional Redemption Notice and the Change of Control Redemption Notices, each of the foregoing, individually, a "**Redemption Notice**."

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(lll) "**Redemption Premium**" means 110%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(mmm) "**Redemption Prices**" means, collectively, Event of Default Redemption Prices, the Company Optional Redemption Prices, the Change of Control Redemption Prices, the Subsequent Placement Optional Redemption Prices and the Installment Redemption Prices, and each of the foregoing, individually, a "**Redemption Price**."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(nnn) "**Registration Rights Agreement**" means that certain registration rights agreement, dated as of the Initial Closing Date, by and among the Company and the initial holders of the Notes relating to, among other things, the registration of the resale of the Common Stock issuable upon conversion of the Notes or otherwise pursuant to the terms of the Notes, as may be amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ooo) "**SEC**" means the United States Securities and Exchange Commission or the successor thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ppp) "**Securities Purchase Agreement**" means that certain securities purchase agreement, dated as of the Subscription Date, by and among the Company and the initial holders of the Notes pursuant to which the Company issued the Notes, as may be amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(qqq) "**Security Agreement**" shall have the meaning as set forth in the Securities Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(rrr) "**Subscription Date**" means March 26, 2026.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(sss) "**Subsidiaries**" means, as of any date of determination, collectively, all Current Subsidiaries and all New Subsidiaries, and each of the foregoing, individually, a "**Subsidiary**."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ttt) "**Subject Entity**" means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(uuu) "**Subsequent Placement Applicable Percentage**" means, with respect to any given Eligible Subsequent Placement, (x) if the New Issuance Price of such Eligible Subsequent Placement is greater than or equal to the Subsequent Placement Trigger Price, 0%, (y) if the New Issuance Price of such Eligible Subsequent Placement is below the Subsequent Placement Trigger Price and no Event of Default then exists (or is continuing), 25% or (z) if the New Issuance Price of such Eligible Subsequent Placement is below the Subsequent Placement Trigger Price and an Event of Default then exists (or is continuing), 50%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vvv) "**Subsequent Placement Trigger Price**" means $5.00 (as adjusted by stock splits, stock dividends, stock combinations, recapitalizations and similar events).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(www) "**Successor Entity**" means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from or surviving any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental Transaction shall have been entered into.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxx) "**Trading Day**" means, as applicable, (x) with respect to all price or trading volume determinations relating to the Common Stock, any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded, provided that "Trading Day" shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise designated as a Trading Day in writing by the Holder or (y) with respect to all determinations other than price determinations relating to the Common Stock, any day on which The New York Stock Exchange (or any successor thereto) is open for trading of securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(yyy) "**Volume Failure**" means, with respect to a particular date of determination, the aggregate daily dollar trading volume (as reported on Bloomberg) of the Common Stock on the Principal Market on any Trading Day during the twenty (20) Trading Day period ending on the Trading Day immediately preceding such date of determination (such period, the "**Volume Failure Measuring Period**"), is less than $750,000 (as adjusted for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions occurring after the Subscription Date). Notwithstanding the foregoing, at any time, and for any period of time, as applicable, the Holder may lower any dollar threshold specified in this definition to any lower dollar threshold, in each case, as specified by the Holder in a written notice to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(zzz) "**VWAP**" means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market (or, if the Principal Market is not the principal trading market for such security, then on the principal securities exchange or securities market on which such security is then traded), during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m., New York time, as reported by Bloomberg through its "VAP" function (set to 09:30 start time and 16:00 end time) or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices). If the VWAP cannot be calculated for such security on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 25. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction during such period.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;34. <u>DISCLOSURE</u>. Upon delivery by the Company to the Holder (or receipt by the Company from the Holder) of any notice in accordance with the terms of this Note, unless the Company has in good faith determined that the matters relating to such notice do not constitute material, non-public information relating to the Company or any of its Subsidiaries, the Company shall on or prior to 9:00 am, New York city time on the Business Day immediately following such notice delivery date, publicly disclose such material, non-public information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material, non-public information relating to the Company or any of its Subsidiaries, the Company so shall indicate to the Holder explicitly in writing in such notice (or immediately upon receipt of notice from the Holder, as applicable), and in the absence of any such written indication in such notice (or notification from the Company immediately upon receipt of notice from the Holder), the Holder shall be entitled to presume that information contained in the notice does not constitute material, non-public information relating to the Company or any of its Subsidiaries. Nothing contained in this Section 34 shall limit any obligations of the Company, or any rights of the Holder, under Section 4(i) of the Securities Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;35. <u>ABSENCE OF TRADING AND DISCLOSURE RESTRICTIONS</u>. The Company acknowledges and agrees that the Holder is not a fiduciary or agent of the Company and that the Holder shall have no obligation to (a) maintain the confidentiality of any information provided by the Company or (b) refrain from trading any securities while in possession of such information in the absence of a written non-disclosure agreement signed by an officer of the Holder that explicitly provides for such confidentiality and trading restrictions. In the absence of such an executed, written non-disclosure agreement, the Company acknowledges that the Holder may freely trade in any securities issued by the Company, may possess and use any information provided by the Company in connection with such trading activity, and may disclose any such information to any third party.

[*signature page follows*]

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IN WITNESS WHEREOF, the Company has caused this Note to be duly executed as of the Issuance Date set out above.

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| |
|:---|
| **QUMULUSAI, INC.**<br>|
| By: <u>/s/ Mike Maniscalco</u>  |
| Name: Mike Maniscalco |
| Title: Chief Executive Officer |

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*Senior Convertible Note - Signature Page*

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**EXHIBIT I**

**QUMULUSAI, INC.**<br> **CONVERSION NOTICE**

Reference is made to the Senior Secured Convertible Note (the "**Note**") issued to the undersigned by QumulusAI, Inc. a Georgia corporation (the "**Company**"). In accordance with and pursuant to the Note, the undersigned hereby elects to convert the Conversion Amount (as defined in the Note) of the Note indicated below into shares of Common Stock, $[ ] par value per share (the "**Common Stock**"), of the Company, as of the date specified below. Capitalized terms not defined herein shall have the meaning as set forth in the Note.

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| |
|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Date of<br> Conversion: |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Aggregate Principal to be converted: |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Aggregate accrued and unpaid Interest, Make-Whole Amount and accrued and unpaid Late Charges with respect to such portion of the Aggregate Principal, such Make Whole Amount and such Aggregate Interest to be converted: |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; AGGREGATE CONVERSION<br> AMOUNT<br> TO BE CONVERTED: |
| Please confirm the following information: |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Conversion Price: |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Number of shares of Common<br> Stock to be issued: |
| Installment Amount(s) to be reduced (and corresponding Installment Date(s)) and amount of reduction: |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If this Conversion Notice is being delivered with respect to an Alternate Conversion, check here if Holder is electing to use the following Alternate Conversion Price:____________<br>If this Conversion Notice is being delivered with respect to an Acceleration, check here if Holder is electing to use _________ as the Acceleration Conversion Price related to the following Installment Date:____________ |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Please issue the Common Stock into which the Note is being converted to Holder, or for its benefit, as follows:<br>Check here if requesting delivery as a certificate to the following name and to the following address:<br>

Issue to:<br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Check here if requesting delivery by Deposit/Withdrawal at Custodian as follows:<br>

<br> DTC Participant:  

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| |
|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; DTC Number: |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Account<br> Number: |

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Date: _____________ __,<u> </u> <u> </u> Name of Registered Holder <br>By:<u> </u><br> Name:<br> Title: Tax ID:_____________________ E-mail Address:

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**Exhibit II**

**ACKNOWLEDGMENT**

The Company hereby (a) acknowledges this Conversion Notice, (b) certifies that the above indicated number of shares of Common Stock [are][are not] eligible to be resold by the Holder either (i) pursuant to Rule 144 (subject to the Holder's execution and delivery to the Company of a customary 144 representation letter) or (ii) an effective and available registration statement and (c) hereby directs _________________ to issue the above indicated number of shares of Common Stock in accordance with the Transfer Agent Instructions dated _____________, 20__ from the Company and acknowledged and agreed to by ________________________.

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| |
|:---|
| **QUMULUSAI, INC.**<br>|
| By:<u> </u> |
| Name: |
| Title: |

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## Exhibit 10.64

**Exhibit 10.64**

**[PORTIONS HEREIN IDENTIFIED BY [\*\*\*] HAVE BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE THE EXCLUDED INFORMATION IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.]**

***Execution Version***

**SECURITY AND PLEDGE AGREEMENT**

**SECURITY AND PLEDGE AGREEMENT**, dated as of March 26, 2026 (this "**Agreement**"), made by QumulusAI, Inc., a Georgia corporation with offices located at 2146 Roswell Road, Suite 108-851, Marietta, GA 30062 (the "**Company**" or "**Grantor**"), in favor of , [\*\*\*], a Delaware limited liability company, with offices located at [\*\*\*], in its capacity as collateral agent (together with its successors and assignees, in such capacity, the "**Collateral Agent**") for the Noteholders (as defined below) party to the Securities Purchase Agreement (as defined below).

**<u>W</u> <u>I</u> <u>T</u> <u>N</u> <u>E</u> <u>S</u> <u>S</u> <u>E</u> <u>T</u> <u>H:</u>**

WHEREAS, the Company is party to that certain Securities Purchase Agreement, dated as of March 26, 2026, (as amended, modified, supplemented, extended, renewed, restated or replaced from time to time in accordance with the terms thereof, the "**Securities Purchase Agreement**") by and among the Company and each party listed as a "**Buyer**" on the Schedule of Buyers attached thereto (each a "**Buyer**" and collectively, the "**Buyers**"), pursuant to which the Company shall be required to sell, and the Buyers shall purchase or have the right to purchase, the "Notes", in each case, issued pursuant thereto (as such Notes may be amended, modified, supplemented, extended, renewed, restated or replaced from time to time in accordance with the terms thereof, collectively, the "**Notes**");

WHEREAS, it is a condition precedent to the Buyers' obligation to purchase certain Notes that the Grantor shall have executed and delivered to the Collateral Agent this Agreement providing for the grant to the Collateral Agent, for the ratable benefit of itself and the Noteholders, of a valid, enforceable, and perfected security interest in all personal property of the Grantor to secure all of the Company's obligations under the Transaction Documents;

NOW, THEREFORE, in consideration of the premises and the agreements herein and in order to induce the Buyers to perform under the Securities Purchase Agreement, the Grantor agrees with the Collateral Agent, for the ratable benefit of the Collateral Agent and the Noteholders, as follows:

SECTION 1. <u>Definitions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Reference is hereby made to the Securities Purchase Agreement and the Notes for a statement of the terms thereof. All terms used in this Agreement and the recitals hereto which are defined in the Securities Purchase Agreement, the Notes or in the Code, and which are not otherwise defined herein shall have the same meanings herein as set forth therein; provided that terms used herein which are defined in the Code on the date hereof shall continue to have the same meaning notwithstanding any replacement or amendment of the Code except as the Collateral Agent may otherwise determine in its sole and absolute discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Without limiting the generality of, and subject to the proviso at the end of, <u>Section 1(a)</u> of this Agreement, the following terms shall have the respective meanings provided for in the Code: "Accounts", "Account Debtor", "Cash Proceeds", "Certificate of Title", "Chattel Paper", "Commercial Tort Claim", "Commodity Account", "Commodity Contracts", "Deposit Account", "Documents", "Electronic Chattel Paper", "Equipment", "Fixtures", "General Intangibles", "Goods", "Instruments", "Inventory", "Investment Property", "Letter-of-Credit Rights", "Noncash Proceeds", "Payment Intangibles", "Proceeds", "Promissory Notes", "Security", "Record", "Security Account", "Software", "Supporting Obligations" and "Uncertificated Securities".

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) As used in this Agreement, the following terms shall have the respective meanings indicated below, such meanings to be applicable equally to both the singular and plural forms of such terms:

"**Affiliate**" of any Person means any other Person which, directly or indirectly, controls or is controlled by or is under common control with such Person and any officer or director of such Person. Without limiting the generality of the foregoing, a Person shall be deemed to be "controlled by" any other Person if such Person possesses, directly or indirectly, power to vote 10% or more of the securities (on a fully diluted basis) having ordinary voting power for the election of directors or managers or power to direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

"**Bankruptcy Code**" means Chapter 11 of Title 11 of the United States Code, 11 U.S.C §§101 et seq. (or other applicable bankruptcy, insolvency or similar laws).

"**Bankruptcy Event of Default**" shall have the meaning set forth in the Note.

"**Blocked Controlled Account**" means the Lockbox Account (as defined in the Securities Purchase Agreement) and listed on <u>Schedule IV</u> attached hereto.

"**Business Day**" means any day other than Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to "stay at home", "shelter-in-place", "non-essential employee" or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any Governmental Authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally are open for use by customers on such day.

"**Buyer**" or "**Buyer**s" shall have the meaning set forth in the recitals hereto.

"**Capital Stock**" means (i) with respect to any Person that is a corporation, any and all shares, interests, participations or other equivalents (however designated and whether or not voting) of corporate stock (including, without limitation, any warrants, options, rights or other securities exercisable or convertible into equity interests or securities of such Person), and (ii) with respect to any Person that is not an individual or a corporation, any and all partnership, membership, trust or other equity interests of such Person.

"**Closing Date**", "**Initial Closing**" and "**Additional Closing**" shall have the meaning set forth in the Securities Purchase Agreement.

"**Code**" means Articles 8 or 9 of the Uniform Commercial Code as in effect from time to time in the State of New York; <u>provided</u> that, if perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, "Code" means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

"**Collateral**" shall have the meaning set forth in <u>Section 3(a)</u> of this Agreement.

"**Collateral Agent**" shall have the meaning set forth in the preamble hereto.

"**Company**" shall have the meaning set forth in the preamble hereto.

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"**Controlled Account Agreement**" means a deposit account control agreement or securities account control agreement with respect to a Pledged Account, pursuant to which the Collateral Agent is granted control over such Pledged Account in a manner that perfects its security interest in such Pledged Account under applicable law, all in form and substance satisfactory to the Collateral Agent, as the same may be amended, modified, supplemented, extended, renewed, restated or replaced from time to time.

"**Controlled Account Bank**" shall have the meaning set forth in <u>Section 6(i)</u> of this Agreement.

"**Controlled Accounts**" means the Deposit Accounts, Commodity Accounts, Securities Accounts, and/or Foreign Currency Controlled Account of the Grantor listed on <u>Schedule IV</u> attached hereto.

"**Copyright Licenses**" means all licenses, contracts or other agreements, whether written or oral, naming the Grantor as licensee or licensor and providing for the grant of any right to use or sell any works covered by any Copyright (including, without limitation, all Copyright Licenses set forth in <u>Schedule</u> <u>II</u> hereto).

"**Copyrights**" means all domestic and foreign copyrights, whether registered or not, including, without limitation, all copyright rights throughout the universe (whether now or hereafter arising) in any and all media (whether now or hereafter developed), in and to all original works of authorship fixed in any tangible medium of expression, acquired or used by the Grantor (including, without limitation, all copyrights described in <u>Schedule II</u> hereto), all applications, registrations and recordings thereof (including, without limitation, applications, registrations and recordings in the United States Copyright Office or in any similar office or agency of the United States or any other country or any political subdivision thereof), and all reissues, divisions, continuations, continuations in part and extensions or renewals thereof.

"**Domestic Subsidiary**" means any Subsidiary other than a Foreign Subsidiary.

"**Event of Default**" shall have the meaning set forth in Section 4(a) of the Notes.

"**Foreign Currency Controlled Accounts**" means any Controlled Account of the Grantor or any of its Subsidiaries holding a deposit denominated in a currency other than United States dollar.

"**Foreign Subsidiary**" means any Subsidiary of the Grantor organized under the laws of a jurisdiction other than the United States, any of the states thereof, Puerto Rico or the District of Columbia.

"**GAAP**" means U.S. generally accepted accounting principles consistently applied.

"**Governmental Authority**" means any nation or government, any Federal, state, city, town, municipality, county, local, foreign or other political subdivision thereof or thereto and any department, commission, board, bureau, court, tribunal, instrumentality, agency or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

"**Insolvency Proceeding**" means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other bankruptcy or insolvency law or law for the relief of debtors, any proceeding relating to assignments for the benefit of creditors, formal or informal moratoria, compositions, or extensions generally with creditors, or any proceeding seeking reorganization, arrangement, or other similar relief.

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"**Intellectual Property**" means, collectively, all intellectual property rights and assets, and all rights, interests and protections that are associated with, similar to, or required for the exercise of, any of the foregoing, however arising, under the applicable laws of any jurisdiction throughout the world, whether registered or unregistered, including, without limitation, any and all: (a) Trademarks; (b) internet domain names, whether or not trademarks, registered in any top-level domain by any authorized private registrar or Governmental Authority, web addresses, web pages, websites and related content; (c) accounts with YouTube, LinkedIn, Twitter, Instagram, Facebook and other social media companies and the content found thereon (to the extent that such accounts and content are transferable pursuant to the terms, conditions, and policies of each applicable social media platform); (d) Copyrights; (e) Patents; and (f) business and technical information, databases, data collections and other confidential and proprietary information and all rights therein.

"**Intellectual Property Security Agreement**" means the Intellectual Property Security Agreement required to be delivered pursuant to <u>Section 6(h)(i)</u> of this Agreement, substantially in the form attached hereto as <u>Exhibit A</u>.

"**Licenses**" means, collectively, the Copyright Licenses, the Trademark Licenses and the Patent Licenses.

"**Lien**" means any mortgage, lien, pledge, charge, security interest, adverse claim or other encumbrance upon or in any property or assets.

"**Noteholders**" means, at any time, the holders of the Notes at such time.

"**Note**s", "**Initial Notes**" and "**Additional Notes**" shall have the meaning set forth in the recitals hereto.

"**Obligations**" shall have the meaning set forth in <u>Section 4</u> of this Agreement.

"**Paid in Full**" or "**Payment in Full**" means the latest to occur of (a) the indefeasible payment in full in cash of all of the Obligations, (b) no Notes issued by the Grantor pursuant to the Securities Purchase Agreement remain outstanding (whether such Notes have been converted in full to Ordinary Shares or otherwise satisfied in accordance with the terms of the Securities Purchase Agreement), and (c) the ability of the Grantor and the Buyers to conduct Additional Closings and the Grantor to issue Additional Notes have been fully terminated or exhausted in accordance with the terms of the Securities Purchase Agreement.

"**Patent Licenses**" means all licenses, contracts or other agreements, whether written or oral, naming the Grantor as licensee or licensor and providing for the grant of any right to manufacture, use or sell any invention covered by any Patent (including, without limitation, all Patent Licenses set forth in <u>Schedule II</u> hereto).

"**Patents**" means all domestic and foreign letters patent, design patents, utility patents, industrial designs, inventions, trade secrets, ideas, concepts, methods, techniques, processes, proprietary information, technology, know-how, formulae, rights of publicity and other general intangibles of like nature, now existing or hereafter acquired (including, without limitation, all domestic and foreign letters patent, design patents, utility patents, industrial designs, inventions, trade secrets, ideas, concepts, methods, techniques, processes, proprietary information, technology, know-how and formulae described in <u>Schedule</u> <u>II</u> hereto), all applications, registrations and recordings thereof (including, without limitation, applications, registrations and recordings in the United States Patent and Trademark Office, or in any similar office or agency of the United States or any other country or any political subdivision thereof), and all reissues, reexaminations, divisions, continuations, continuations in part and extensions or renewals thereof.

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"**Perfection Requirement**" or "**Perfection Requirements**" shall have the meaning set forth in <u>Section 5(j)</u> of this Agreement.

"**Permitted Liens**" shall have the meaning set forth in the Notes.

"**Person**" means an individual, corporation, limited liability company, partnership, association, joint-stock company, trust, unincorporated organization, joint venture or other enterprise or entity or Governmental Authority.

"**Pledged Accounts**" means all of the Grantor's right, title and interest in all of its Deposit Accounts, Commodity Accounts and Securities Accounts (in all cases, including, without limitation, the Blocked Controlled Account and all Controlled Accounts and Foreign Currency Controlled Accounts).

"**Pledged Collateral**" shall have the meaning set forth in <u>Section 2(a)</u>.

"**Pledged Debt**" shall have the meaning set forth in <u>Section 2(a)</u>.

"**Pledged Entity**" means, each Person listed from time to time on <u>Schedule IV</u> hereto as a "Pledged Entity," together with each other Person, any right in or interest in or to all or a portion of whose Securities or Capital Stock is acquired or otherwise owned by the Grantor after the date hereof.

"**Pledged Equity**" means all of the Grantor's right, title and interest in and to all of the Securities and Capital Stock now or hereafter owned by such Grantor (including, without limitation, those interests listed opposite the name of such Grantor on <u>Schedule IV</u>), regardless of class or designation, including all substitutions therefor and replacements thereof, all proceeds thereof and all rights relating thereto, also including, without limitation, any certificates representing such Securities and/or Capital Stock, the right to receive any certificates representing any of such Securities and/or Capital Stock, all warrants, options, subscription, share appreciation rights and other rights, contractual or otherwise, in respect thereof, and the right to receive dividends, distributions of income, profits, surplus, or other compensation by way of income or liquidating distributions, in cash or in kind, and cash, instruments, and other property from time to time received, receivable, or otherwise distributed in respect of or in addition to, in substitution of, on account of, or in exchange for any or all of the foregoing.

"**Pledged Operating Agreements**" means all of the Grantor's rights, powers and remedies under the limited liability company operating agreements of each of the Pledged Entities that is a limited liability company, as may be amended, modified, supplemented, extended, renewed, restated or replaced from time to time.

"**Pledged Partnership Agreements**" means all of the Grantor's rights, powers, and remedies under the general or limited partnership agreements of each of the Pledged Entities that is a general or limited partnership, as may be amended, modified, supplemented, extended, renewed, restated or replaced from time to time.

"**Pledged Securities**" means any Promissory Notes, stock certificates, limited liability membership interests or other Securities, certificates or Instruments now or hereafter included in the Pledged Collateral, including all Pledged Equity, Pledged Debt and all other certificates, instruments or other documents representing or evidencing any Pledged Collateral.

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"**Public Listing Date**" shall have the meaning set forth in the Notes.

"**Securities Purchase Agreement**" shall have the meaning set forth in the recitals hereto. "**Subsidiary**" means any Person in which the Grantor directly or indirectly, (i) owns any of the outstanding Capital Stock or holds any equity or similar interest of such Person or (ii) controls or operates all or any part of the business, operations or administration of such Person, and all of the foregoing, collectively, "Subsidiaries".

"**Trademark Licenses**" means all licenses, contracts or other agreements, whether written or oral, naming the Grantor as licensor or licensee and providing for the grant of any right concerning any Trademark, together with any goodwill connected with and symbolized by any such licenses, contracts or agreements and the right to prepare for sale or lease and sell or lease any and all Inventory now or hereafter owned by the Grantor and now or hereafter covered by such licenses, contracts or agreements (including, without limitation, all Trademark Licenses described in <u>Schedule II</u> hereto).

"**Trademarks**" means all domestic and foreign trademarks, service marks, collective marks, certification marks, trade names, business names, d/b/a's, assumed names, Internet domain names, trade styles, designs, logos and other source or business identifiers and all general intangibles of like nature, now or hereafter owned, adopted, acquired or used by the Grantor (including, without limitation, all domestic and foreign trademarks, service marks, collective marks, certification marks, trade names, business names, d/b/a's, assumed names, Internet domain names, trade styles, designs, logos and other source or business identifiers described in <u>Schedule II</u> hereto), all applications, registrations and recordings thereof (including, without limitation, applications, registrations and recordings in the United States Patent and Trademark Office or in any similar office or agency of the United States, any state thereof or any other country or any political subdivision thereof), and all reissues, extensions or renewals thereof, together with all goodwill of the business symbolized by such marks and all customer lists, formulae and other Records of the Grantor relating to the distribution of products and services in connection with which any of such marks are used.

SECTION 2. <u>Pledge of Pledged Collateral</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) As collateral security for the due and punctual payment and performance in full of the Obligations, as and when due, the Grantor hereby assigns and pledges to the Collateral Agent, its successors and permitted assigns, and hereby grants to the Collateral Agent, its successors and permitted assigns, for the ratable benefit of the Collateral Agent and the Noteholders, a continuing Lien on and security interest in, all of such Grantor's right, title and interest in, to and under all of the following, wherever located and whether now or hereafter existing and whether now owned or hereafter acquired: (i) the Pledged Equity; (ii) all Promissory Notes, Securities and Instruments evidencing debt now owned or at any time hereafter acquired by it (including, without limitation, those listed opposite the name of such Grantor on <u>Schedule</u> <u>IV</u>) (collectively, the "**Pledged Debt**"); (iii) subject to <u>Section 2(g)</u> and <u>2(h)</u>, all payments of principal or interest, dividends, distributions, cash, Promissory Notes, Securities, Instruments and other property from time to time received, receivable or otherwise distributed in respect of, in exchange for or upon the conversion of, and all other Proceeds received in respect of, the Pledged Equity and the Pledged Debt; (iv) all rights and privileges of such Grantor with respect to the Securities and other property referred to in clauses (i), (ii), and (iii) above; and (v) all Proceeds of, and Security Entitlements in respect of, any of the foregoing (the items referred to in clauses (i) through (v) above being collectively referred to as the "**Pledged Collateral**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) On each Closing Date (in the case of the Grantor that grants a Lien on any of its assets hereunder on the Initial Closing Date) or on each Additional Closing Date or the date on which it becomes a party to this Agreement pursuant to <u>Section 6(m)</u> (in the case of any other Grantor), the Grantor shall deliver or cause to be delivered to the Collateral Agent any and all Pledged Securities (other than any Uncertificated Securities, but only for so long as such Securities remain uncertificated) to the extent such Pledged Securities, in the case of Promissory Notes and other Instruments evidencing debt, are required to be delivered pursuant to <u>Section 2(c)</u>. Thereafter, whenever such Grantor acquires any other Pledged Security (other than any Uncertificated Securities, but only for so long as such Uncertificated Securities remain uncertificated), such Grantor shall promptly, and in any event within 30 days (or such longer period as the Collateral Agent may agree to in writing), deliver or cause to be delivered to the Collateral Agent such Pledged Security as Collateral hereunder to the extent such Pledged Securities, in the case of Promissory Notes and Instruments evidencing debt, are required to be delivered pursuant to <u>Section 2(c)</u>.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Grantor will cause all debt for borrowed money in an aggregate principal amount of $10,000 or more owed to such Grantor by any other Person to be evidenced by a duly executed Promissory Note, and shall cause each such Promissory Note to be pledged and delivered to the Collateral Agent, (i) on the Initial Closing Date hereof, in the case of any such debt existing on the date hereof (or, in the case of the Grantor that becomes a party hereto after the date hereof, on the date such Grantor becomes a party hereto, in the case of any such debt existing on such date) or (ii) promptly following the incurrence thereof, in the case of any such debt incurred after the date hereof (or such other date), in each case pursuant to the terms hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Upon delivery to the Collateral Agent, (i) any Pledged Securities required to be delivered pursuant to <u>Section 2(b)</u> and/or <u>2(c)</u> shall be accompanied by undated stock or note powers duly executed by the Grantor in blank or other instruments of transfer reasonably satisfactory to the Collateral Agent and by such other instruments and documents as the Collateral Agent may reasonably request in order to effect the transfer of such Pledged Securities and (ii) all other property comprising part of the Pledged Collateral required to be delivered pursuant to <u>Section 2(b)</u> and/or <u>2(c)</u> shall be accompanied by undated proper instruments of assignment duly executed by the Grantor and such other instruments or documents as the Collateral Agent may reasonably request in order to effect transfer of such Pledged Collateral. Each delivery of Pledged Securities or other Pledged Collateral shall be accompanied by a schedule describing such Pledged Securities or Pledged Collateral, as the case may be, which schedule shall be deemed to supplement <u>Schedule IV</u> and be made a part hereof; provided that failure to attach any such schedule hereto shall not affect the validity of such pledge of such Pledged Securities. Each schedule so delivered shall supplement any prior schedules so delivered.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The assignment, pledge, Lien and security interest granted in <u>Section 2(a)</u> are granted as security only and shall not subject the Collateral Agent or any Noteholder to, or in any way alter or modify, any obligation or liability of the Grantor with respect to or arising out of the Pledged Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) If an Event of Default shall occur and be continuing and, other than in the case of a Bankruptcy Event of Default, the Collateral Agent shall have notified the Borrower of its intent to exercise such rights, (a) the Collateral Agent, shall have the right (in its sole and absolute discretion) to cause each of the Pledged Securities to be transferred of record into the name of the Collateral Agent or into the name of its nominee (as pledgee or as sub-agent) or the name of the Grantor, endorsed or assigned in blank or in favor of the Collateral Agent and (b) to the extent permitted by the documentation governing such Pledged Securities and applicable law, the Collateral Agent shall have the right to exchange the certificates representing Pledged Securities for certificates of smaller or larger denominations for any purpose consistent with this Agreement. The Grantor will promptly give to the Collateral Agent copies of any material notices received by it with respect to Pledged Securities registered in the name of such Grantor. The Grantor will take any and all actions reasonably requested by the Collateral Agent to facilitate compliance with this <u>Section 2(f)</u>.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Unless and until an Event of Default shall have occurred and be continuing and, other than in the case of a Bankruptcy Event of Default, the Collateral Agent shall have notified the Grantor that the rights of the Grantor under this <u>Section 2(g)</u> are being suspended:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Grantor shall be entitled to exercise any and all voting and/or other consensual rights and powers inuring to an owner of Pledged Collateral or any part thereof for any purpose consistent with the terms of this Agreement and the other Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Collateral Agent shall promptly execute and deliver to the Grantor, or cause to be executed and delivered to such Grantor, all such proxies, powers of attorney and other instruments as such Grantor may reasonably request in writing for the purpose of enabling such Grantor to exercise the voting and/or consensual rights and powers it is entitled to exercise pursuant to <u>Section 2(g)(i)</u>, in each case as shall be specified in such request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Grantor shall be entitled to receive and retain any and all dividends, interest, principal and other distributions paid on or distributed in respect of the Pledged Collateral, to the extent (and only to the extent) that such dividends, interest, principal and other distributions are permitted by, the other Transaction Documents and applicable laws; <u>provided</u> that any noncash dividends, interest, principal or other distributions that would constitute Pledged Equity or Pledged Debt, whether resulting from a subdivision, combination or reclassification of the outstanding equity interests of the issuer of any Pledged Securities or received in exchange for Pledged Securities or any part thereof, or in redemption thereof, or as a result of any merger, consolidation, acquisition or other exchange of assets to which such issuer may be a party or otherwise, shall be and become part of the Pledged Collateral, and, if received by the Grantor, shall be held in trust for the benefit of the Collateral Agent and shall, to the extent required by <u>Section 2(b)</u> and/or <u>2(c)</u> be forthwith delivered to the Collateral Agent in the same form as so received (with any necessary endorsement or documents set forth in <u>Section 2(d)</u> or as otherwise reasonably requested by the Collateral Agent). So long as no Event of Default has occurred and is continuing, the Collateral Agent shall promptly deliver to the Grantor any Pledged Securities in its possession if requested to be delivered to the issuer thereof in connection with any exchange or redemption of such Pledged Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Upon the occurrence and during the continuance of an Event of Default and, other than in the case of a Bankruptcy Event of Default, after the Collateral Agent shall have notified the Grantor of the suspension of the rights of the Grantor under <u>Section 2(g)(iii)</u>, all rights of the Grantor to dividends, interest, principal or other distributions that such Grantor is authorized to receive pursuant to <u>Section 2(g)(iii)</u> shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and authority to receive and retain such dividends, interest, principal or other distributions as part of the Pledged Collateral, subject to <u>Section 2(k)</u> and the last sentence of this <u>Section 2(h)</u>. All dividends, interest, principal or other distributions received by the Grantor contrary to the provisions of <u>Section 2(g)</u> or this <u>Section 2(h)</u> shall be held in trust for the benefit of the Collateral Agent and shall be forthwith delivered to the Collateral Agent upon demand in the same form as so received (with any necessary endorsement reasonably requested by the Collateral Agent). Any and all money and other property paid over to or received by the Collateral Agent pursuant to the provisions of <u>Section 2(g)</u> and/or this <u>Section 2(h)</u> shall be retained by the Collateral Agent in an account to be established by the Collateral Agent upon receipt of such money or other property, shall be held as security for the payment and performance of the Obligations and shall be applied in accordance with the provisions of <u>Section 8</u>. After all Events of Default have been cured or waived, and the Grantor has delivered to the Collateral Agent a certificate of an executive officer to such effect, the Collateral Agent shall promptly repay to the Grantor (without interest) all dividends, interest, principal or other distributions that such Grantor would otherwise be permitted to retain pursuant to the terms of <u>Section 2(g)(iii)</u> in the absence of an Event of Default and that remain in such account.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Upon the occurrence and during the continuance of an Event of Default and, other than in the case of a Bankruptcy Event of Default, after the Collateral Agent shall have notified the Grantor of the suspension of the rights of the Grantor under <u>Section 2(g)(i)</u>, all rights of the Grantor to exercise the voting and consensual rights and powers it is entitled to exercise pursuant to <u>Section 2(g)(i)</u>, and the obligations of the Collateral Agent under <u>Section 2(g)(ii)</u>, shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and authority to exercise such voting and consensual rights and powers subject to <u>Section 2(k)</u> and the last sentence of this <u>Section 2(i)</u>; <u>provided</u> that, the Collateral Agent shall have the right from time to time following and during the continuance of an Event of Default to permit the Grantor to exercise such rights. After all Events of Default have been cured or waived, and the Grantor has delivered to the Collateral Agent a certificate of an executive officer to such effect, the Grantor shall have the exclusive right to exercise the voting and/or consensual rights and powers that such Grantor would otherwise be entitled to exercise pursuant to the terms of <u>Section 2(g)(i)</u>, and the obligations of the Collateral Agent under <u>Section 2(g)(ii)</u> shall be reinstated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Any notice given by the Collateral Agent to the Grantor under <u>Section 2(f</u>), <u>Section 2(g)</u>, <u>Section 2(h)</u> or <u>Section 2(i)</u> (i) may be given by telephone if promptly confirmed in writing, (ii) may be given with respect to the Grantor at the same or different times and (iii) may suspend the rights of the Grantor under <u>Section 2(g)(i)</u> or <u>2(g)(iii)</u> in part without suspending all such rights (as specified by the Collateral Agent in its sole and absolute discretion) and without waiving or otherwise affecting the Collateral Agent's rights to give additional notices from time to time suspending other rights so long as an Event of Default has occurred and is continuing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Nothing contained in this Agreement shall be construed to make the Collateral Agent or any Noteholder liable as a member of any limited liability company or as a partner of any partnership, and neither the Collateral Agent nor any Noteholder by virtue of this Agreement or otherwise (except as referred to in the following sentence) shall have any of the duties, obligations or liabilities of a member of any limited liability company or as a partner in any partnership. The parties hereto expressly agree that, unless the Collateral Agent shall become the absolute owner of Pledged Equity consisting of a limited liability company interest or a partnership interest pursuant hereto, this Agreement shall not be construed as creating a partnership or joint venture among the Collateral Agent, any Noteholder, the Grantor and/or any other Person.

SECTION 3. <u>Grant of Security Interest</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) As collateral security for the due and punctual payment and performance in full of the Obligations, as and when due, the Grantor hereby pledges and assigns to the Collateral Agent, its successors and permitted assigns, and hereby grants to the Collateral Agent, its successors and permitted assigns, for the ratable benefit of the Collateral Agent and the Noteholders, a continuing Lien on and security interest in, all of such Grantor's right, title and interest in, to and under all personal property and assets of such Grantor, wherever located and whether now or hereafter existing and whether now owned or hereafter acquired, of every kind, nature and description, whether tangible or intangible (together with the Pledged Collateral, the "**Collateral**"), including, without limitation, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) all Accounts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) all Chattel Paper (whether tangible or Electronic Chattel Paper);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) all Commercial Tort Claims, including, without limitation, those specified on <u>Schedule VI</u> hereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) all Documents;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) all Equipment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) all Fixtures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) all General Intangibles (including, without limitation, all Payment Intangibles);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) all Goods;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) all Instruments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) all Inventory;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) all Investment Property (and, regardless of whether classified as Investment Property under the Code, all Pledged Equity, Pledged Operating Agreements and Pledged Partnership Agreements);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) all Intellectual Property and all Licenses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) all Letter-of-Credit Rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) all Pledged Accounts, all cash and other property from time to time deposited therein, and all monies and property in the possession or under the control of the Collateral Agent or any Noteholder or any Affiliate, representative, agent or correspondent of the Collateral Agent or any such Noteholder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xv) all Supporting Obligations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvi) all other tangible and intangible personal property of the Grantor (whether or not subject to the Code), including, without limitation, all Deposit Accounts and other accounts and all cash and all investments therein, all proceeds, products, offspring, accessions, rents, profits, income, benefits, substitutions and replacements of and to any of the property of the Grantor described in the preceding clauses of this <u>Section 3(a)</u> (including, without limitation, any proceeds of insurance thereon and all causes of action, claims and warranties now or hereafter held by the Grantor in respect of any of the items listed above), and all books, correspondence, files and other Records, including, without limitation, all tapes, desks, cards, Software, data and computer programs in the possession or under the control of the Grantor or any other Person from time to time acting for the Grantor, in each case, to the extent of such Grantor's rights therein, that at any time evidence or contain information relating to any of the property described in the preceding clauses of this <u>Section 3(a)</u> or are otherwise necessary or helpful in the collection or realization thereof; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvii) all Proceeds, including all Cash Proceeds and Noncash Proceeds, and products of any and all of the foregoing Collateral; in each case howsoever the Grantor's interest therein may arise or appear (whether by ownership, security interest, claim or otherwise).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Except for the Permitted Liens existing as of the date hereof, the Grantor agrees not to further encumber, or permit any other Lien to exist that encumbers, any of its Intellectual Property, including, without limitation, any of its Copyrights, Copyright applications, Copyright registrations and like protections in each work of authorship and derivative work, whether published or unpublished, Licenses, Patents, Patent applications and like protections, including, without limitation, improvements, divisions, continuations, renewals, reissues, extensions, and continuations-in-part of the same, Trademarks, service marks and, to the extent permitted under applicable law, any applications therefor, whether registered or not, and the goodwill of the business of such Grantor connected with and symbolized thereby, know-how, operating manuals, trade secret rights, rights to unpatented inventions, and any claims for damage by way of any past, present, or future infringement of any of the foregoing, in each case without the Collateral Agent's prior written consent (which consent may be withheld or given in the Collateral Agent's sole and absolute discretion).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Grantor agrees that the pledge of the shares of Capital Stock acquired by such Grantor of any and all Persons now or hereafter existing that is a Foreign Subsidiary may be supplemented by one or more separate pledge agreements, deeds of pledge, share charges or other similar agreements or instruments, executed and delivered by such Grantor in favor of the Collateral Agent, which agreements or instruments will provide for the pledge of such shares of Capital Stock and perfection of the Lien on such shares in accordance with the laws of the applicable foreign jurisdiction. With respect to such shares of Capital Stock, the Collateral Agent may, at any time and from time to time, in its sole and absolute discretion, take such actions in such foreign jurisdictions that will result in the perfection of the Lien created in such shares of Capital Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) In addition, to secure the due and punctual payment and performance in full of the Obligations, as and when due, and in order to induce the Buyers as aforesaid, the Grantor hereby grants to the Collateral Agent, its successors and permitted assigns, for the ratable benefit of the Collateral Agent and the Noteholders, a right of set-off against the property of such Grantor held by the Collateral Agent, for itself and for the ratable benefit of the Noteholders, consisting of property described above in <u>Section</u> <u>2(a)</u> and/or <u>Section 3(a)</u> now or hereafter in the possession or custody of or in transit to the Collateral Agent, for any purpose, including safekeeping, collection or pledge, for the account of such Grantor, or as to which such Grantor may have any right or power; provided that such right shall only to be exercised after an Event of Default has occurred and is continuing.

SECTION 4. <u>Security for Obligations</u>. The Lien and security interest created hereby in the Collateral constitutes continuing collateral security for all of the following obligations, whether direct or indirect, absolute or contingent, and whether now existing or hereafter incurred (collectively, the "**Obligations**"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) (i) the payment by the Company and the Grantor, as and when due and payable (by scheduled maturity, required prepayment, acceleration, demand or otherwise), of all amounts from time to time owing by it in respect of the Securities Purchase Agreement, this Agreement, the Notes and the other Transaction Documents, and (ii) in the case of the Guarantor, the payment by such Guarantor, as and when due and payable of all Guaranteed Obligations under the Guaranties, including, without limitation, in both cases, (A) all principal of, interest, make-whole and other amounts on the Notes (including, without limitation, all interest, make-whole and other amounts that accrues after the commencement of any Insolvency Proceeding of the Grantor, whether or not the payment of such interest is enforceable or is allowable in such Insolvency Proceeding), and (B) all fees, interest, premiums, penalties, contract causes of action, costs, commissions, expense reimbursements, indemnifications and all other amounts due or to become due under this Agreement or any of the Transaction Documents; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the due and punctual performance and observance by the Grantor of all of its other obligations from time to time existing in respect of any of the Transaction Documents, including without limitation, with respect to any conversion or redemption rights of the Noteholders under the Notes.

SECTION 5. <u>Representations and Warranties</u>. The Grantor represents and warrants as follows:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Schedule I</u> hereto sets forth (i) the exact legal name of the Grantor, and (ii) the state of incorporation, organization or formation and the organizational identification number of the Grantor in such state. The information set forth in <u>Schedule I</u> hereto with respect to such Grantor is true and accurate in all respects. Such Grantor has not previously changed its name (or operated under any other name), jurisdiction of organization or organizational identification number from those set forth in <u>Schedule I</u> hereto except as disclosed in <u>Schedule I</u> hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) There is no pending or, to its knowledge, written notice threatening any action, suit, proceeding or claim affecting the Grantor before any Governmental Authority or any arbitrator, or any order, judgment or award issued by any Governmental Authority or arbitrator, in each case, that may adversely affect the grant by the Grantor, or the perfection, of the Lien and security interest purported to be created hereby in the Collateral, or the exercise by the Collateral Agent of any of its rights or remedies hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) All Federal, state and local tax returns and other reports required by applicable law to be filed by the Grantor has been filed, or extensions have been obtained, and all taxes, assessments and other governmental charges or levies imposed upon the Grantor or any property of the Grantor (including, without limitation, all federal income and social security taxes on employees' wages) and which have become due and payable on or prior to the date hereof have been paid, except to the extent contested in good faith by proper proceedings which stay the imposition of any penalty, fine or Lien resulting from the non-payment thereof and with respect to which adequate reserves have been set aside for the payment thereof in accordance with GAAP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) All Equipment, Fixtures, Goods and Inventory of the Grantor now existing are, and all Equipment, Fixtures, Goods and Inventory of the Grantor hereafter existing will be, located and/or based at the addresses specified therefor in <u>Schedule III</u> hereto, except that the Grantor will give the Collateral Agent written notice of any change in the location of any such Collateral within 20 days of such change, other than to locations set forth on <u>Schedule III</u> hereto (and with respect to which the Collateral Agent has filed financing statements and otherwise fully perfected its Liens thereon). The Grantor's principal place of business and chief executive office, the place where the Grantor keeps its Records concerning the Collateral and all originals of all Chattel Paper in which the Grantor has any right, title or interest are located and will continue to be located at the addresses specified therefor in <u>Schedule III</u> hereto. None of the Accounts in which the Grantor has any right, title or interest is or will be evidenced by Promissory Notes or other Instruments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Set forth in <u>Schedule IV</u> hereto is a complete and accurate list, as of the Initial Closing Date, of (i) all Pledged Debt, specifying the debtor thereof and the outstanding principal amount thereof as of the Initial Closing Date, Securities and other Instruments in which the Grantor has any right, title or interest, (ii) each Pledged Account of the Grantor, together with the name and address of each institution at which each such Pledged Account is maintained, the account number for each such Pledged Account and a description of the purpose of each such Pledged Account and (iii) the name of each Foreign Currency Controlled Account of the Grantor, together with the name and address of each institution at which each such Foreign Currency Controlled Account is maintained and the amount of cash or cash equivalents held in each such Foreign Currency Controlled Account. Set forth in <u>Schedule I</u> hereto is a complete and correct list of each trade name used by the Grantor and the name of, and each trade name used by, each Person from which the Grantor has acquired any substantial part of the Collateral. All of the Pledged Debt, to the best of the Grantor's knowledge (provided that no such knowledge qualification applies to Pledged Debt issued by the Grantor or a Subsidiary), is the legal, valid and binding obligation of the issuer thereof, enforceable against such issuer in accordance with its terms.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Grantor has delivered to the Collateral Agent complete and correct copies of each License described in <u>Schedule II</u> hereto, including all schedules and exhibits thereto, which represent all of the Licenses of the Grantor existing on the date of this Agreement. Each such License sets forth the entire agreement and understanding of the parties thereto relating to the subject matter thereof, and there are no other agreements, arrangements or understandings, written or oral, relating to the matters covered thereby or the rights of such Grantor or any of its Affiliates in respect thereof. Each material License now existing is, and any material License entered into in the future will be, the legal, valid and binding obligation of the parties thereto, enforceable against such parties in accordance with its terms. No default under any material License by any such party has occurred, nor does any defense, offset, deduction or counterclaim exist thereunder in favor of any such party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Grantor owns and controls, or otherwise possesses adequate rights to use, all of its Intellectual Property, which is the only Intellectual Property necessary to conduct its business in substantially the same manner as conducted as of the date hereof. <u>Schedule II</u> hereto sets forth a true and complete list of all Intellectual Property and Licenses owned or used by the Grantor as of the date hereof, and applications for grant or registration of Intellectual Property. To the knowledge of the Grantor, all such Intellectual Property of such Grantor is subsisting and in full force and effect, has not been adjudged invalid or unenforceable, is valid and enforceable and has not been abandoned in whole or in part. Except as set forth in <u>Schedule II</u>, no such Intellectual Property is the subject of any licensing or franchising agreement. Except as set forth in <u>Schedule II</u>, the Grantor does not have any knowledge of any infringement upon or conflict with the Patent, Trademark, Copyright, trade secret rights of others and, the Grantor is not now infringing or in conflict with any Patent, Trademark, Copyright, trade secret or similar rights of others, and to the knowledge of the Grantor, no other Person is now infringing or in conflict in any material respect with any such properties, assets and rights owned or used by the Grantor. The Grantor has not received any notice that it is violating or has violated the Trademarks, Patents, Copyrights, inventions, trade secrets, proprietary information and technology, know-how, formulae, rights of publicity or other intellectual property rights of any third party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) The Grantor is and will be at all times the sole and exclusive owner of the Collateral in which such Grantor has granted a Lien and security interest hereunder free and clear of any Liens, except for (i) Permitted Liens thereon and (ii) certain Intellectual Property rights of the Company which is jointly owned by the Company with certain third parties as described in <u>Schedule II</u> hereto. No effective financing statement or other instrument similar in effect covering all or any part of the Collateral is on file in any recording or filing office except such as (i) may have been filed in favor of the Collateral Agent and/or the Noteholders relating to this Agreement or the other Transaction Documents, or (ii) are intended to perfect Permitted Liens existing as of the date hereof and disclosed on <u>Schedule VII</u> hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The exercise by the Collateral Agent of any of its rights and remedies hereunder will not contravene any law or any contractual restriction binding on or otherwise affecting the Grantor or any of its properties and will not result in or require the creation of any Lien, upon or with respect to any of its properties other than as granted pursuant to this Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority, is required for (i) the grant by the Grantor, or the perfection, of the Lien and security interest purported to be created hereby in the Collateral, or (ii) the exercise by the Collateral Agent of any of its rights and remedies hereunder, except for (A) the filing under the Code as in effect in the applicable jurisdiction of the financing statements described in <u>Schedule V</u> hereto, all of which financing statements have been duly filed and are in full force and effect, (B) with respect to all Pledged Accounts, and all cash and other property from time to time deposited therein, the execution of a Controlled Account Agreement with the depository or other institution with which the applicable Pledged Accounts are maintained, as provided in <u>Section 6(i)</u>, (C) with respect to Commodity Contracts, the execution of a control agreement with the commodity intermediary with which such Commodity Contract is carried, as provided in <u>Section 6(i)</u>, (D) with respect to the perfection of the security interest created hereby in the United States Intellectual Property and Licenses, the recording of the appropriate Intellectual Property Security Agreement in the United States Patent and Trademark Office or the United States Copyright Office, as applicable, (E) with respect to the perfection of the security interest created hereby in foreign Intellectual Property and Licenses, registrations and filings in jurisdictions located outside of the United States and covering rights in such jurisdictions relating to such foreign Intellectual Property and Licenses, (F) with respect to the perfection of the security interest created hereby in any Letter-of-Credit Rights, the consent of the issuer of the applicable letter of credit to the assignment of proceeds as provided in the Code as in effect in the applicable jurisdiction, (G) with respect to Investment Property constituting uncertificated securities, the Grantor causing the issuer thereof either (i) to register the Collateral Agent as the registered owner of such securities or (ii) to agree in an authenticated record with such Grantor and the Collateral Agent that such issuer will comply with instructions with respect to such securities originated by the Collateral Agent without further consent of such Grantor, such authenticated record to be in form and substance satisfactory to the Collateral Agent, (H) with respect to Investment Property constituting certificated securities or instruments, such items to be delivered to and held by or on behalf of the Collateral Agent pursuant hereto in suitable form for transfer by delivery or accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to the Collateral Agent, (I) with respect to any action that may be necessary to obtain control of Collateral constituting Commodity Contracts, Electronic Chattel Paper or Letter of Credit Rights, the taking of such actions, and (J) the Collateral Agent having possession of all Documents, Chattel Paper, Instruments and cash constituting Collateral (subclauses (A) through (J) each a "**Perfection Requirement**" and collectively, the "**Perfection Requirements**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) This Agreement creates in favor of the Collateral Agent a legal, valid and enforceable Lien on and security interest in the Collateral, as security for the Obligations. The performance of the Perfection Requirements results in the perfection of such Lien on and security interest in the Collateral. Such Lien and security interest is (or in the case of Collateral in which the Grantor obtains any right, title or interest after the date hereof, will be), subject only to Permitted Liens and the Perfection Requirements, a first priority, valid, enforceable and perfected Lien on and security interest in all personal property of the Grantor. Such recordings and filings and all other action necessary to perfect and protect such Lien and security interest have been duly taken (and, in the case of Collateral in which the Grantor obtains right, title or interest after the date hereof, will be duly taken), except for the Collateral Agent's having possession of all Documents, Chattel Paper, Instruments and cash constituting Collateral after the date hereof and the other actions, filings and recordations described above, including the Perfection Requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) As of the date hereof, the Grantor does not hold any Commercial Tort Claims or has knowledge of any pending Commercial Tort Claims, except for the Commercial Tort Claims described in <u>Schedule VI</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) All of the Pledged Equity is presently owned by the Grantor as set forth in <u>Schedule IV</u> free and clear of all Liens other than Permitted Liens, and is presently represented by the certificates listed on <u>Schedule IV</u> hereto (if applicable). As of the date hereof, there are no existing options, warrants, calls or commitments of any character whatsoever relating to the Pledged Equity other than as contemplated and permitted by the Transaction Documents. The Grantor is the sole holder of record and the sole beneficial owner of the Pledged Equity, as applicable. None of the Pledged Equity has been issued or transferred in violation of the securities registration, securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject. The Pledged Equity constitutes 100% or such other percentage as set forth on <u>Schedule IV</u> of the issued and outstanding shares of Capital Stock of the applicable Pledged Entity. All of the Pledged Equity has been duly and validly authorized and issued by the issuer thereof and in the case of Pledged Equity (other than Pledged Equity consisting of limited liability company interests or partnership interests which, pursuant to the relevant organizational or formation documents, cannot be fully paid and non-assessable), is fully paid and non-assessable.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) The Grantor (i) is a corporation, duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, (ii) has all requisite corporate power and authority to conduct its business as now conducted and as presently contemplated and to execute and deliver this Agreement and each other Transaction Document to which the Grantor is a party, and to consummate the transactions contemplated hereby and thereby and (iii) is duly qualified to do business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary, except where the failure to be so qualified would not result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) The execution, delivery and performance by the Grantor of this Agreement and each other Transaction Document to which such Grantor is a party (i) have been duly authorized by all necessary corporate, limited liability company or limited partnership action, (ii) do not and will not contravene its charter or by-laws, limited liability company or operating agreement, certificate of partnership or partnership agreement, as applicable, or any applicable law or any contractual restriction binding on such Grantor or its properties, (iii) do not and will not result in or require the creation of any Lien (other than pursuant to any Transaction Document) upon or with respect to any of its assets or properties, and (iv) do not and will not result in any default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of any material permit, license, authorization or approval applicable to it or its operations or any of its assets or properties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) This Agreement has been duly executed and delivered by the Grantor and is the legal, valid and binding obligation of such Grantor, enforceable against such Grantor in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, suretyship or other similar laws and equitable principles (regardless of whether enforcement is sought in equity or at law). Each of the other Transaction Documents to which the Grantor is or will be a party, when delivered, duly executed and delivered by such Grantor and the legal, valid and binding obligation of such Grantor, enforceable against such Grantor in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, suretyship or other similar laws and equitable principles (regardless of whether enforcement is sought in equity or at law).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) There are no conditions precedent to the effectiveness of this Agreement that have not been satisfied or waived.

SECTION 6. <u>Covenants as to the Collateral</u>. Until all of the Obligations shall have been fully performed and Paid in Full, unless the Collateral Agent shall otherwise consent in writing (in its sole and absolute discretion):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Further Assurances</u>. The Grantor will, at its expense, at any time and from time to time, promptly execute and deliver all further instruments and documents and take all further action that the Collateral Agent may reasonably request in order to: (i) perfect and protect the Lien and security interest of the Collateral Agent created hereby; (ii) enable the Collateral Agent to exercise and enforce its rights and remedies hereunder in respect of the Collateral, including, without limitation, the Controlled Accounts; or (iii) otherwise effect the purposes of this Agreement, including, without limitation: (A) marking conspicuously all Chattel Paper and each License and, at the request of the Collateral Agent, each of its Records pertaining to the Collateral with a legend, in form and substance satisfactory to the Collateral Agent, indicating that such Chattel Paper, License or Collateral is subject to the Lien and security interest created hereby, (B) delivering and pledging to the Collateral Agent each Promissory Note, Security (subject to the limitations set forth in <u>Section 3</u>), Chattel Paper or other Instrument, now or hereafter owned by the Grantor, duly endorsed and accompanied by executed instruments of transfer or assignment, all in form and substance satisfactory to the Collateral Agent, (C) executing and filing (to the extent, if any, that the Grantor's signature is required thereon) or authenticating the filing of, such financing or continuation statements, or amendments thereto, as may be necessary or that the Collateral Agent may reasonably request in order to perfect and preserve the security interest created hereby, (D) furnishing to the Collateral Agent from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral in each case as the Collateral Agent may reasonably request, all in reasonable detail, (E) if any Collateral shall be in the possession of a third party, notifying such Person of the Collateral Agent's security interest created hereby and obtaining a written acknowledgment from such Person, in form and substance satisfactory to the Collateral Agent, that such Person holds possession of the Collateral for the benefit of the Collateral Agent (for the ratable benefit of the Collateral Agent and the Noteholders), (F) if at any time after the date hereof, the Grantor acquires or holds any Commercial Tort Claim, promptly notifying the Collateral Agent in a writing signed by such Grantor setting forth a brief description of such Commercial Tort Claim and granting to the Collateral Agent a Lien and security interest therein and in the Proceeds thereof, which writing shall incorporate the provisions hereof and shall be in form and substance satisfactory to the Collateral Agent, (G) [reserved]; and (H) taking all actions required by the Code or by other law, as applicable, in any relevant Code jurisdiction, or by other law as applicable in any foreign jurisdiction.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Location of Collateral</u>. The Grantor will keep the Collateral (i) at the locations specified therefor on <u>Schedule III</u> hereto, or (ii) at such other locations set forth on <u>Schedule III</u> and with respect to which the Collateral Agent has filed financing statements and otherwise fully perfected its Liens thereon, or (iii) at such other locations in the United States, provided that thirty (30) days prior to any change in the location of any Collateral to such other location, or upon the acquisition of any Collateral to be kept at such other locations, the Grantor shall give the Collateral Agent written notice thereof and deliver to the Collateral Agent a new <u>Schedule III</u> indicating such new locations and such other written statements and schedules as the Collateral Agent may require.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Condition of Equipment</u>. The Grantor will maintain or cause to be maintained and preserved in good condition, repair and working order, ordinary wear and tear excepted, the Equipment (necessary or useful to its business) and will forthwith, or in the case of any loss or damage to any Equipment of the Grantor within a commercially reasonable time after the occurrence thereof, make or cause to be made all repairs, replacements and other improvements in connection therewith which are necessary or desirable, consistent with past practice, or which the Collateral Agent may request to such end. The Grantor will promptly furnish to the Collateral Agent a statement describing in reasonable detail any such loss or damage in excess of $25,000 per occurrence to any Equipment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Taxes, Etc</u>. The Grantor agrees to pay promptly when due all property and other taxes, assessments and governmental charges or levies imposed upon, and all claims (including claims for labor, materials and supplies) against, the Equipment and Inventory, except to the extent the validity thereof is being contested in good faith by proper proceedings which stay the imposition of any penalty, fine or Lien resulting from the non-payment thereof and with respect to which adequate reserves in accordance with GAAP have been set aside for the payment thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Insurance</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Grantor will, at its own expense, maintain insurance (including, without limitation, comprehensive general liability, hazard, rent and business interruption insurance) with respect to its properties (including all real properties leased or owned by it) and business, in such amounts and covering such risks, in such form and with responsible and reputable insurance companies or associations as is required by any Governmental Authority having jurisdiction with respect thereto or as is carried generally in accordance with sound business practice by companies in similar businesses similarly situated and in any event, in amount, adequacy and scope reasonably satisfactory to the Collateral Agent.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) To the extent requested by the Collateral Agent at any time and from time to time, each such policy for liability insurance shall provide for all losses to be paid on behalf of the Collateral Agent and the Grantor as their respective interests may appear, and each policy for property damage insurance shall provide for all losses to be adjusted with, and paid directly to, the Collateral Agent. In addition to and without limiting the foregoing, to the extent requested by the Collateral Agent at any time and from time to time, each such policy shall in addition (A) name the Collateral Agent as an additional insured party and/or loss payee, as applicable, thereunder (without any representation or warranty by or obligation upon the Collateral Agent) as its interests may appear, (B) contain an agreement by the insurer that any loss thereunder shall be payable to the Collateral Agent on its own account notwithstanding any action, inaction or breach of representation or warranty by the Grantor, (C) provide that there shall be no recourse against the Collateral Agent for payment of premiums or other amounts with respect thereto, and (D) provide that at least 30 days' prior written notice of cancellation, lapse, expiration or other adverse change shall be given to the Collateral Agent by the insurer. The Grantor will, if so requested by the Collateral Agent, deliver to the Collateral Agent original or duplicate policies of such insurance (including certificates demonstrating compliance with this <u>Section 6(e)</u>) and, as often as the Collateral Agent may reasonably request, a report of a reputable insurance broker with respect to such insurance. The Grantor will also, at the request of the Collateral Agent, execute and deliver instruments of assignment of such insurance policies and cause the respective insurers to acknowledge notice of such assignment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Reimbursement under any liability insurance maintained by the Grantor pursuant to this <u>Section 6(e)</u> may be paid directly to the Person who shall have incurred liability covered by such insurance. In the case of any loss involving damage to Equipment or Inventory, to the extent paragraph (iv) of this <u>Section 6(e)</u> is not applicable, any proceeds of insurance involving such damage shall be paid to the Collateral Agent, and the Grantor will make or cause to be made the necessary repairs to or replacements of such Equipment or Inventory, and any proceeds of insurance maintained by the Grantor pursuant to this <u>Section 6(e)</u> (except as otherwise provided in paragraph (iv) in this <u>Section 6(e)</u>) shall be paid by the Collateral Agent to the Grantor as reimbursement for the reasonable costs of such repairs or replacements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Notwithstanding anything to the contrary in <u>subsection 6(e)(iii)</u> above, following and during the continuance of an Event of Default, all insurance payments in respect of the Grantor's properties and business shall be paid to the Collateral Agent and applied as specified in <u>Section 8(b)</u> hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Provisions Concerning Name, Organization, Location, Accounts and Licenses</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Grantor will (A) give the Collateral Agent at least thirty (30) days' prior written notice of any change in such Grantor's name, identity or organizational structure, (B) maintain its jurisdiction of incorporation, organization or formation as set forth in <u>Schedule I</u> hereto, (C) immediately notify the Collateral Agent upon obtaining an organizational identification number, if on the date hereof such Grantor did not have such identification number, and (D) keep adequate records concerning the Collateral and permit representatives of the Collateral Agent during normal business hours on reasonable notice to such Grantor, to inspect and make abstracts from such records.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Grantor will (except as otherwise provided in this subsection (f)), continue to collect, at its own expense, all amounts due or to become due under the Accounts. In connection with such collections, the Grantor may (and, at the Collateral Agent's direction, will) take such action as the Grantor or the Collateral Agent may deem necessary or advisable to enforce collection or performance of the Accounts; <u>provided</u>, <u>however</u>, that the Collateral Agent shall have the right at any time following the occurrence and during the continuance of an Event of Default to notify the Account Debtors or obligors under any Accounts of the assignment of such Accounts to the Collateral Agent and to direct such Account Debtors or obligors to make payment of all amounts due or to become due to the Grantor thereunder directly to the Collateral Agent or its designated agent and, upon such notification and at the expense of the Grantor and to the extent permitted by applicable law, to enforce collection of any such Accounts and to adjust, settle or compromise the amount or payment thereof, in the same manner and to the same extent as the Grantor might have done. After receipt by the Grantor of a notice from the Collateral Agent that the Collateral Agent has notified, intends to notify, or has enforced or intends to enforce the Grantor's rights against the Account Debtors or obligors under any Accounts as referred to in the proviso to the immediately preceding sentence, (A) all amounts and proceeds (including, without limitation, Instruments) received by the Grantor in respect of the Accounts shall be received in trust for the benefit of the Collateral Agent hereunder (for the ratable benefit of the Collateral Agent and the Noteholders), shall be segregated from other funds of the Grantor and shall be forthwith paid over to the Collateral Agent in the same form as so received (with any necessary endorsement) to be applied as specified in <u>Section 8(b)</u> hereof, and (B) the Grantor will not adjust, settle or compromise the amount or payment of any Account or release wholly or partly any Account Debtor or obligor thereof or allow any credit or discount thereon. In addition, upon the occurrence and during the continuance of an Event of Default, the Collateral Agent may (in its sole and absolute discretion) direct any or all of the banks and financial institutions with which the Grantor either maintains a Deposit Account or a lockbox (including, without limitation, any Controlled Account) or deposits the proceeds of any Accounts to send immediately to the Collateral Agent by wire transfer (to such deposit account as the Collateral Agent shall specify, or in such other manner as the Collateral Agent shall direct) all or a portion of such Securities, cash, investments and other items held by such institution. Any such Securities, cash, investments and other items so received by the Collateral Agent shall be applied as specified in accordance with <u>Section 8(b)</u> hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Upon the occurrence and during the continuance of any breach or default under any material License referred to in <u>Schedule II</u> hereto by any party thereto other than the Grantor, the Grantor party thereto will, promptly after obtaining knowledge thereof, give the Collateral Agent written notice of the nature and duration thereof, specifying what action, if any, it has taken and proposes to take with respect thereto and thereafter will take reasonable steps to protect and preserve its rights and remedies in respect of such breach or default, or will obtain or acquire an appropriate substitute License.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) The Grantor will, at its expense, promptly deliver to the Collateral Agent a copy of each notice or other communication received by it by which any other party to any material License referred to in <u>Schedule II</u> hereto purports to exercise any of its rights or affect any of its obligations thereunder, together with a copy of any reply by such Grantor thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) The Grantor will exercise promptly and diligently each and every right which it may have under each material License (other than any right of termination) and will duly perform and observe in all respects all of its obligations under each material License and will take all action necessary or reasonable to maintain such Licenses in full force and effect. The Grantor will not, without the prior written consent of the Collateral Agent (in its sole and absolute discretion), cancel, terminate, amend or otherwise modify in any respect, or waive any provision of, any material License referred to in <u>Schedule</u> <u>II</u> hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Transfers and Other Liens</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Except as otherwise expressly permitted in the other Transaction Documents, the Grantor shall not, directly or indirectly, sell, lease, license, assign, transfer, spin-off, split-off, close, convey or otherwise dispose of any Collateral whether in a single transaction or a series of related transactions, other than (A) sales, leases, licenses, assignments, transfers, conveyances and other dispositions of such assets or rights by such Grantor for fair value in the ordinary course of business consistent with past practices and (B) sales of Inventory and product in the ordinary course of business.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Except as expressly provided in the Notes, the Grantor shall not, directly or indirectly, redeem, repurchase or declare or pay any cash dividend or distribution on any of its Capital Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Grantor shall not, directly or indirectly, without the prior written consent of the Required Holders, (A) issue any Notes (other than as contemplated by the Securities Purchase Agreement and the Notes) or (B) issue any other Securities that would cause a breach or default under the Notes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) The Grantor shall not enter into, renew, extend or be a party to, any transaction or series of related transactions (including, without limitation, the purchase, sale, lease, transfer or exchange of property or assets of any kind or the rendering of services of any kind) with any Affiliate, except in the ordinary course of business in a manner and to an extent consistent with past practice and necessary or desirable for the prudent operation of its business, for fair consideration and on terms no less favorable to it than would be obtainable in a comparable arm's length transaction with a Person that is not an Affiliate thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) The Grantor will not create, suffer to exist or grant any Lien upon or with respect to any Collateral other than a Permitted Lien.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Intellectual Property</u>.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) In no event shall the Grantor, either itself or through any agent, employee, licensee or designee, file an application for the registration of any Patent, Trademark or Copyright or the United States Copyright Office or the United States Patent and Trademark Office, as applicable, or in any similar office or agency of the United States or any country or any political subdivision thereof unless it gives the Collateral Agent prior written notice thereof. Upon request of the Collateral Agent, the Grantor shall execute, authenticate and deliver any and all assignments, agreements, instruments, documents and papers as the Collateral Agent may reasonably request to evidence the Collateral Agent's security interest hereunder in such Intellectual Property and the General Intangibles of the Grantor relating thereto or represented thereby, and the Grantor hereby appoints the Collateral Agent its attorney-in-fact to execute and/or authenticate and file all such writings for the foregoing purposes, all acts of such attorney being hereby ratified and confirmed, and such power (being coupled with an interest) shall be irrevocable until all Obligations are fully performed and Paid in Full.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Pledged Accounts</u>. The Grantor shall cause the financial institution which maintains the Blocked Controlled Account (each a "**Controlled Account Bank**") to execute and deliver to the Collateral Agent, in form and substance satisfactory to the Collateral Agent, a Controlled Account Agreement with respect to such Controlled Account, duly executed by the Grantor and such Controlled Account Bank, pursuant to which such Controlled Account Bank among other things shall irrevocably agree, with respect to such Blocked Controlled Account, that, at all times, such Controlled Account Bank will comply with any and all instructions originated by the Collateral Agent directing the disposition of the funds in such Blocked Controlled Account without further consent by such Grantor, (ii) such Controlled Account Bank shall waive, subordinate or agree not to exercise any rights of setoff or recoupment or any other claim against the applicable Controlled Account other than for payment of its service fees and other charges directly related to the administration of such Controlled Account and for returned checks or other items of payment, (iii) at all times, such Controlled Account Bank shall not comply with any instructions, directions or orders of any form with respect to such Blocked Controlled Account other than instructions, directions or orders originated by the Collateral Agent, (iv) all funds deposited by the Grantor with such Controlled Account Bank shall be subject to a perfected, first priority security interest in favor of the Collateral Agent, and (v) at any time, including, without limitation, in accordance with <u>Section 6(q)</u> hereof, such Controlled Account Bank shall immediately send to the Collateral Agent (or such other recipient specified by the Collateral Agent in writing) by wire transfer (to such account as the Collateral Agent shall specify, or in such other manner as the Collateral Agent shall direct) all such funds and other items held by it.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Reserved</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>Control</u>. The Grantor hereby agrees to take any or all action that may be necessary or that the Collateral Agent may reasonably request in order for the Collateral Agent to obtain "control" in accordance with Sections 9-105 through 9-107 of the Code with respect to the following Collateral: (i) Electronic Chattel Paper, (ii) Investment Property, and (iii) Letter-of-Credit Rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>Inspection and Reporting</u>. The Grantor shall permit the Collateral Agent, or any agent or representatives thereof or such attorneys, accountant or other professionals or other Persons as the Collateral Agent may designate (at Grantor's sole cost and expense) (i) to examine and make copies of and abstracts from the Grantor's Records and books of account, (ii) to visit and inspect its properties, (iii) to verify materials, leases, Instruments, Accounts, Inventory and other assets of the Grantor from time to time, and (iv) to conduct audits, physical counts, appraisals, valuations and/or examinations at the locations of the Grantor. The Grantor shall also permit the Collateral Agent, or any agent or representatives thereof or such attorneys, accountants or other professionals or other Persons as the Collateral Agent may designate to discuss such Grantor's affairs, finances and accounts with any of its directors, officers, managerial employees, attorneys, independent accountants or any of its other representatives. Without limiting the foregoing, the Collateral Agent may, at any time, in the Collateral Agent's own name, in the name of a nominee of the Collateral Agent, or in the name of the Grantor communicate (by mail, telephone, facsimile or otherwise) with the Account Debtors of such Grantor, parties to contracts with such Grantor and/or obligors in respect of Instruments or Pledged Debt of such Grantor to verify with such Persons, to the Collateral Agent's satisfaction, the existence, amount, terms of, and any other matter relating to, Accounts, Instruments, Pledged Debt, Chattel Paper, payment intangibles and/or other receivables.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) <u>Reserved</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) <u>Post Closing</u>*.* Notwithstanding anything to the contrary contained herein or any other Transaction Document, the Grantor shall within thirty (30) calendar days following the Closing Date (or such later date as Collateral Agent may agree in its sole discretion), deliver to the Collateral Agent, in form and substance satisfactory to the Collateral Agent, additional insured, lender loss payable, and notice of cancellation endorsements issued by the Grantor's insurers with respect to such Grantor's insurance policies (including, without limitation, policies related to comprehensive general liability, casualty and property, hazard, rent and business interruption insurance) as the Collateral Agent shall request naming the Collateral Agent as additional insured or lender loss payee, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) <u>Blocked Controlled Account</u>. On the Initial Closing Date, the Grantor shall deposit, or cause to be deposited, at least $7,500,000 of cash into the Blocked Controlled Account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) <u>Release of Restricted Deposits in Blocked Controlled Account</u>. Notwithstanding anything to the contrary set forth in the Controlled Account Agreement with respect to the Blocked Controlled Account, upon (x) the Public Listing Date and (y) receipt by the Collateral Agent of at least five (5) Business Days' prior written notice from the Company of the anticipated Public Closing Date, the Collateral Agent shall deliver to the Controlled Account Bank which maintains the Blocked Controlled Account an instruction to send a Cash wire to a deposit account specified in writing by the Company in an amount equal to all such funds and other items held in the Blocked Controlled Account.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) Application of Restricted Deposits in Blocked Controlled Account. If the Public Listing Date does not occur on or before September 26, 2026 (or such later date as determined by Collateral Agent in its sole discretion), the Company hereby acknowledges and agrees that the Collateral Agent may, on behalf of the Noteholders, apply the funds and other items held in the Blocked Controlled Account to the outstanding Obligations owing under the Notes.

SECTION 7. <u>Additional Provisions Concerning the Collateral</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) To the maximum extent permitted by applicable law, and for the purpose of taking any action that the Collateral Agent may deem necessary or advisable to accomplish the purposes of this Agreement, the Grantor hereby (i) authorizes the Collateral Agent to execute any such agreements, instruments or other documents in such Grantor's name and to file such agreements, instruments or other documents in such Grantor's name and in any appropriate filing office, (ii) authorizes the Collateral Agent at any time and from time to time to file, one or more financing or continuation statements, and amendments thereto, relating to the Collateral (including, without limitation, any such financing statements that (A) describe the Collateral as "all assets" or "all personal property" (or words of similar effect) or that describe or identify the Collateral by type or in any other manner as the Collateral Agent may determine regardless of whether any particular asset of such Grantor falls within the scope of Article 9 of the Code or whether any particular asset of such Grantor constitutes part of the Collateral, and (B) contain any other information required by Part 5 of Article 9 of the Code for the sufficiency or filing office acceptance of any financing statement, continuation statement or amendment, including, without limitation, whether such Grantor is an organization, the type of organization and any organizational identification number issued to such Grantor) and (iii) ratifies such authorization to the extent that the Collateral Agent has filed any such financing or continuation statements, or amendments thereto, prior to the date hereof. A photocopy or other reproduction of this Agreement or any financing statement covering the Collateral or any part thereof shall be sufficient as a financing statement where permitted by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Grantor hereby irrevocably appoints the Collateral Agent as its attorney-in-fact and proxy, with full authority in the place and stead of such Grantor and in the name of such Grantor or otherwise, from time to time in the Collateral Agent's discretion following the occurrence and during the continuance of an Event of Default, to take any action and to execute any instrument which the Collateral Agent may deem necessary or advisable to accomplish the purposes of this Agreement, including, without limitation, (i) to obtain and adjust insurance required to be paid to the Collateral Agent pursuant to <u>Section</u> <u>6(e)</u> hereof, (ii) to ask, demand, collect, sue for, recover, compound, receive and give acquittance and receipts for moneys due and to become due under or in respect of any Collateral, (iii) to receive, endorse, and collect any drafts or other Instruments, Documents and Chattel Paper in connection with clause (i) or (ii) above, (iv) to file any claims or take any action or institute any action, suit or proceedings which the Collateral Agent may deem necessary or desirable for the collection of any Collateral or otherwise to enforce the rights of the Collateral Agent and the Noteholders with respect to any Collateral, (v) to execute assignments, licenses and other documents to enforce the rights of the Collateral Agent and the Noteholders with respect to any Collateral, and (vi) to verify any and all information with respect to any and all Accounts. This power is coupled with an interest and is irrevocable until all of the Obligations are fully performed and Paid in Full.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) For the purpose of enabling the Collateral Agent to exercise rights and remedies hereunder, at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies, and for no other purpose, the Grantor hereby grants to the Collateral Agent, to the extent assignable, an irrevocable, non-exclusive license (exercisable without payment of royalty or other compensation to the Grantor) to use, assign, license or sublicense any Intellectual Property in which such Grantor now or hereafter has any right, title or interest, wherever the same may be located, including, without limitation, in such license reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer programs used for the compilation or printout thereof. Notwithstanding anything contained herein to the contrary, but subject to the provisions of the Securities Purchase Agreement that limit the right of the Grantor to dispose of its property, and <u>Section 6(g)</u> and <u>Section 6(h)</u> hereof, so long as no Event of Default shall have occurred and be continuing, the Grantor may exploit, use, enjoy, protect, license, sublicense, assign, sell, dispose of or take other actions with respect to the Intellectual Property in the ordinary course of its business and as otherwise expressly permitted by any of the other Transaction Documents. In furtherance of the foregoing, unless an Event of Default shall have occurred and be continuing, the Collateral Agent shall from time to time, upon the request of the Grantor, execute and deliver any instruments, certificates or other documents, in the form so requested, which such Grantor shall have certified are appropriate (in such Grantor's judgment) to allow it to take any action permitted above (including relinquishment of the license provided pursuant to this clause (c) as to any Intellectual Property). Further, upon the full performance and Payment in Full of all of the Obligations, the Collateral Agent (subject to <u>Section 11(e)</u> hereof) shall release and reassign to the Grantor all of the Collateral Agent's right, title and interest in and to the Intellectual Property, and the Licenses, all without recourse, representation or warranty whatsoever. The exercise of rights and remedies hereunder by the Collateral Agent shall not terminate the rights of the holders of any licenses or sublicenses theretofore granted by the Grantor in accordance with the second sentence of this clause (c). The Grantor hereby releases the Collateral Agent from any claims, causes of action and demands at any time arising out of or with respect to any actions taken or omitted to be taken by the Collateral Agent under the powers of attorney granted herein other than actions taken or omitted to be taken through the Collateral Agent's gross negligence or willful misconduct, as determined by a final judgment of a court of competent jurisdiction no longer subject to appeal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) If the Grantor fails to perform any agreement or obligation contained herein, the Collateral Agent may itself perform, or cause performance of, such agreement or obligation, in the name of such Grantor or the Collateral Agent, and the expenses of the Collateral Agent incurred in connection therewith shall be payable by such Grantor pursuant to <u>Section 9</u> hereof and such obligation shall be secured by the Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The powers conferred on the Collateral Agent hereunder are solely to protect its interest in the Collateral and shall not impose any duty upon it to exercise any such powers. Except for the safe custody of any Collateral in its possession and the accounting for moneys actually received by it hereunder, the Collateral Agent shall have no duty as to any Collateral or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Anything herein to the contrary notwithstanding (i) the Grantor shall remain liable under the Licenses and otherwise with respect to any of the Collateral to the extent set forth therein to perform all of its obligations thereunder to the same extent as if this Agreement had not been executed, (ii) the exercise by the Collateral Agent of any of its rights or remedies hereunder shall not release the Grantor from any of its obligations under the Licenses or otherwise in respect of the Collateral, and (iii) the Collateral Agent shall not have any obligation or liability by reason of this Agreement under the Licenses or with respect to any of the other Collateral, nor shall the Collateral Agent be obligated to perform any of the obligations or duties of the Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) As long as no Event of Default shall have occurred and be continuing and, other than in the case of a Bankruptcy Event of Default, until written notice shall be given to the Grantor:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Grantor shall have the right, from time to time, to vote and give consents with respect to the Pledged Equity, or any part thereof for all purposes not inconsistent with the provisions of this Agreement, the Securities Purchase Agreement or any other Transaction Document; provided, however, that no vote shall be cast, and no consent shall be given or action taken, which would have the effect of impairing the position or interest of the Collateral Agent in respect of the Pledged Equity or which would authorize, effect or consent to (unless and to the extent expressly permitted by the Securities Purchase Agreement):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. the dissolution or liquidation, in whole or in part, of a Pledged Entity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. the consolidation or merger of a Pledged Entity with any other Person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. the sale, disposition or encumbrance of all or substantially all of the assets of a Pledged Entity, except for Liens in favor of the Collateral Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. any change in the authorized number of shares, the stated capital or the authorized share capital of a Pledged Entity or the issuance of any additional shares of its Capital Stock; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. the alteration of the voting rights with respect to the Capital Stock of a Pledged Entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) all dividends and interest (other than such cash dividends and interest as are permitted to be paid to the Grantor in accordance with clause (i) above) and all other distributions in respect of any of the Pledged Equity, whenever paid or made, shall be delivered to the Collateral Agent to hold as Pledged Equity and shall, if received by the Grantor, be received in trust for the benefit of the Collateral Agent (for the ratable benefit of the Collateral Agent and the Noteholders), be segregated from the other property or funds of such Grantor, and be forthwith delivered to the Collateral Agent as Pledged Equity in the same form as so received (with any necessary endorsement).

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SECTION 8. <u>Remedies Upon Event of Default; Application of Proceeds</u>. If any Event of Default shall have occurred and be continuing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Collateral Agent may exercise in respect of the Collateral, in addition to any other rights and remedies provided for herein, in any other Transaction Document or otherwise available to it, all of the rights and remedies of a secured party upon default under the Code (whether or not the Code applies to the affected Collateral), and also may (i) take absolute control of the Collateral, including, without limitation, transfer into the Collateral Agent's name or into the name of its nominee or nominees (to the extent the Collateral Agent has not theretofore done so) and thereafter receive, for the ratable benefit of itself and the Noteholders, all payments made thereon, give all consents, waivers and ratifications in respect thereof and otherwise act with respect thereto as though it were the outright owner thereof, (ii) require the Grantor to, and the Grantor hereby agrees that it will at its expense and upon request of the Collateral Agent forthwith, assemble all or part of its respective Collateral as directed by the Collateral Agent and make it available to the Collateral Agent at a place or places to be designated by the Collateral Agent that is reasonably convenient to both parties, and the Collateral Agent may enter into and occupy any premises owned or leased by the Grantor where the Collateral or any part thereof is located or assembled for a reasonable period in order to effectuate the Collateral Agent's rights and remedies hereunder or under law, without obligation to the Grantor in respect of such occupation, and (iii) without notice except as specified below and without any obligation to prepare or process the Collateral for sale, (A) sell the Collateral or any part thereof in one or more parcels at public or private sale (including, without limitation, by credit bid), at any of the Collateral Agent's offices or elsewhere, for cash, on credit or for future delivery, and at such price or prices and upon such other terms as the Collateral Agent may deem commercially reasonable and/or (B) lease, license or dispose of the Collateral or any part thereof upon such terms as the Collateral Agent may deem commercially reasonable. The Grantor agrees that, to the extent notice of sale or any other disposition of its respective Collateral shall be required by law, at least ten (10) days' notice to the Grantor of the time and place of any public sale or the time after which any private sale or other disposition of its respective Collateral is to be made shall constitute reasonable notification. The Collateral Agent shall not be obligated to make any sale or other disposition of any Collateral regardless of notice of sale having been given. The Collateral Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. The Grantor hereby waives any claims against the Collateral Agent and the Noteholders arising by reason of the fact that the price at which its respective Collateral may have been sold at a private sale was less than the price which might have been obtained at a public sale or was less than the aggregate amount of the Obligations, even if the Collateral Agent accepts the first offer received and does not offer such Collateral to more than one offeree, and waives all rights that the Grantor may have to require that all or any part of such Collateral be marshaled upon any sale (public or private) thereof. The Grantor hereby acknowledges that (i) any such sale of its respective Collateral by the Collateral Agent shall be made without warranty, (ii) the Collateral Agent may specifically disclaim any warranties of title, possession, quiet enjoyment or the like, and (iii) such actions set forth in clauses (i) and (ii) above shall not adversely affect the commercial reasonableness of any such sale of Collateral. In addition to the foregoing, (1) upon written notice to the Grantor from the Collateral Agent after and during the continuance of an Event of Default, such Grantor shall cease any use of the Intellectual Property or any trademark, patent or copyright similar thereto for any purpose described in such notice; (2) the Collateral Agent may, at any time and from time to time after and during the continuance of an Event of Default, upon 10 days' prior notice to such Grantor, license, whether general, special or otherwise, and whether on an exclusive or non-exclusive basis, any of the Intellectual Property, throughout the universe for such term or terms, on such conditions, and in such manner, as the Collateral Agent shall in its sole discretion determine; and (3) the Collateral Agent may, at any time, pursuant to the authority granted in <u>Section 7</u> hereof or otherwise (such authority being effective upon the occurrence and during the continuance of an Event of Default), execute and deliver on behalf of such Grantor, one or more instruments of assignment of the Intellectual Property (or any application or registration thereof), in form suitable for filing, recording or registration in any country.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any cash held by the Collateral Agent as Collateral and all Cash Proceeds received by the Collateral Agent in respect of any sale or disposition of or collection from, or other realization upon, all or any part of the Collateral shall be applied as follows (subject to the provisions of the Securities Purchase Agreement): first, to pay any fees, indemnities or expense reimbursements then due to the Collateral Agent (including, without limitation, those described in <u>Section 9</u> hereof); second, to pay any fees, indemnities or expense reimbursements then due to the Noteholders, on a pro rata basis; third to pay interest due under the Notes owing to the Noteholders, on a pro rata basis; fourth, to pay or prepay principal in respect of the Notes, whether or not then due, owing to the Noteholders, on a pro rata basis; fifth, to pay or prepay any other Obligations, whether or not then due, in such order and manner as the Collateral Agent shall elect, consistent with the provisions of the Securities Purchase Agreement. Any surplus of such cash or Cash Proceeds held by the Collateral Agent and remaining after the full performance and Payment in Full of all of the Obligations shall be paid over to whomsoever shall be lawfully entitled to receive the same or as a court of competent jurisdiction shall direct.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In the event that the proceeds of any such sale, disposition, collection or realization are insufficient to pay all amounts to which the Collateral Agent and the Noteholders are legally entitled, the Grantor shall be, jointly and severally, liable for the deficiency, together with interest thereon at the highest rate specified in the Notes for interest on overdue principal thereof or such other rate as shall be fixed by applicable law, together with the costs of collection and the reasonable fees, costs, expenses and other charges of any attorneys employed by the Collateral Agent to collect such deficiency.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) To the extent that applicable law imposes duties on the Collateral Agent to exercise rights and remedies in a commercially reasonable manner, the Grantor acknowledges and agrees that it is commercially reasonable for the Collateral Agent (i) to fail to incur expenses deemed significant by the Collateral Agent to prepare Collateral for disposition or otherwise to transform raw material or work in process into finished goods or other finished products for disposition, (ii) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents for the collection or disposition of Collateral to be collected or disposed of, (iii) to fail to exercise collection remedies against Account Debtors or other Persons obligated on Collateral or to remove Liens on or any adverse claims against Collateral, (iv) to exercise collection remedies against Account Debtors and other Persons obligated on Collateral directly or through the use of collection agencies and other collection specialists, (v) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (vi) to contact other Persons, whether or not in the same business as the Grantor, for expressions of interest in acquiring all or any portion of such Collateral, (vii) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether or not the Collateral is of a specialized nature, (viii) to dispose of Collateral by utilizing internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match buyers and sellers of assets, (ix) to dispose of assets in wholesale rather than retail markets, (x) to disclaim disposition warranties, such as title, possession or quiet enjoyment, (xi) to purchase insurance or credit enhancements to insure the Collateral Agent against risks of loss, collection or disposition of Collateral or to provide to the Collateral Agent a guaranteed return from the collection or disposition of Collateral, or (xii) to the extent deemed appropriate by the Collateral Agent, to obtain the services of brokers, investment bankers, consultants, attorneys and other professionals to assist the Collateral Agent in the collection or disposition of any of the Collateral. The Grantor acknowledges that the purpose of this section is to provide non-exhaustive indications of what actions or omissions by the Collateral Agent would be commercially reasonable in the Collateral Agent's exercise of rights and remedies against the Collateral and that other actions or omissions by the Collateral Agent shall not be deemed commercially unreasonable solely on account of not being indicated in this section. Without limitation of the foregoing, nothing contained in this section shall be construed to grant any rights to the Grantor or to impose any duties on the Collateral Agent that would not have been granted or imposed by this Agreement or by applicable law in the absence of this section.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Collateral Agent shall not be required to marshal any present or future collateral security (including, but not limited to, this Agreement and the Collateral) for, or other assurances of payment of, the Obligations or any of them or to resort to such collateral security or other assurances of payment in any particular order, and all of the Collateral Agent's rights and remedies hereunder and in respect of such collateral security and other assurances of payment shall be cumulative and in addition to all other rights and remedies, however existing or arising. To the extent that the Grantor lawfully may, the Grantor hereby agrees that it will not invoke any law relating to the marshaling of collateral which might cause delay in or impede the enforcement of the Collateral Agent's rights and remedies under this Agreement or under any other instrument creating or evidencing any of the Obligations or under which any of the Obligations is outstanding or by which any of the Obligations is secured or payment thereof is otherwise assured, and, to the extent that it lawfully may, the Grantor hereby irrevocably waives the benefits of all such laws.

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SECTION 9. <u>Indemnity and Expenses</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Grantor agrees, jointly and severally, to defend, protect, indemnify and hold the Collateral Agent and each of the Noteholders harmless from and against any and all claims, damages, losses, liabilities, obligations, penalties, fees, costs and expenses (including, without limitation, reasonable and actual legal fees, costs, expenses, and disbursements of such Person's counsel) to the extent that they arise out of or otherwise result from this Agreement (including, without limitation, enforcement of this Agreement), except to the extent resulting from such Person's gross negligence or willful misconduct, as determined by a final judgment of a court of competent jurisdiction no longer subject to appeal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Grantor agrees, jointly and severally, to pay to the Collateral Agent upon demand the amount of any and all costs and expenses, including the reasonable fees, costs, expenses and disbursements of counsel for the Collateral Agent and of any experts and agents (including, without limitation, any collateral trustee which may act as agent of the Collateral Agent), which the Collateral Agent may incur in connection with (i) the preparation, negotiation, execution, delivery, recordation, administration, amendment, waiver or other modification or termination of this Agreement, (ii) the custody, preservation, use or operation of, or the sale of, collection from, or other realization upon, any Collateral, (iii) the exercise or enforcement of any of the rights or remedies of the Collateral Agent hereunder, or (iv) the failure by the Grantor to perform or observe any of the provisions hereof.

SECTION 10. <u>Notices, Etc</u>. All notices and other communications provided for hereunder shall be in writing and shall be mailed (by certified mail, first-class postage prepaid and return receipt requested), telecopied, e-mailed or delivered, (a) if to the Grantor, to the Company's address, email address and/or facsimile number as set forth in Section 9(f) of the Securities Purchase Agreement, (b) if to any Buyer, to it at its respective address, email address and/or facsimile number as set forth in Section 9(f) of the Securities Purchase Agreement or (c) if to Collateral Agent, to it at its respective address, email address and/or facsimile number as set forth on its signature page hereto; or as to any such Person, at such other address as shall be designated by such Person in a written notice to all other parties hereto complying as to delivery with the terms of this <u>Section 10</u>. All such notices and other communications shall be effective (a) if sent by certified mail, return receipt requested, when received or five Business Days after deposited in the mails, whichever occurs first, (b) if telecopied or e-mailed, when transmitted (during normal business hours) and confirmation is received, and otherwise, the day after the notice or communication was transmitted and confirmation is received, or (c) if delivered in person, upon delivery. For the avoidance of doubt, all Foreign Subsidiaries, as Grantor, hereby appoint the Company as its agent for receipt of service of process and all notices and other communications in the United States at the address specified below.

SECTION 11. <u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) No amendment of any provision of this Agreement shall be effective unless it is in writing and signed by the Grantor and the Collateral Agent (and approved by the Required Holders), and no waiver of any provision of this Agreement, and no consent to any departure by the Grantor therefrom, shall be effective unless it is in writing and signed by the Grantor and the Collateral Agent (and approved by the Required Holders), and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No amendment, modification or waiver of this Agreement shall be effective to the extent that it (1) applies to fewer than all of the holders of Notes or (2) imposes any obligation or liability on any holder of Notes without such holder's prior written consent (which may be granted or withheld in such holder's sole and absolute discretion).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) No failure on the part of the Collateral Agent to exercise, and no delay in exercising, any right or remedy hereunder or under any of the other Transaction Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any such right or remedy preclude any other or further exercise thereof or the exercise of any other right or remedy. The rights and remedies of the Collateral Agent or any Noteholder provided herein and in the other Transaction Documents are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law. The rights and remedies of the Collateral Agent or any Noteholder under any of the other Transaction Documents against any party thereto are not conditional or contingent on any attempt by such Person to exercise any of its rights or remedies under any of the other Transaction Documents against such party or against any other Person, including but not limited to, the Grantor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or thereof or affecting the validity or enforceability of such provision in any other jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) This Agreement shall create a continuing Lien on and security interest in the Collateral and shall (i) remain in full force and effect until the full performance and Payment in Full of the Obligations, and (ii) be binding on the Grantor and all other Persons who become bound as debtor to this Agreement in accordance with Section 9-203(d) of the Code and shall inure, together with all rights and remedies of the Collateral Agent and the Noteholders hereunder, to the ratable benefit of the Collateral Agent and the Noteholders and their respective permitted successors, transferees and assigns. Without limiting the generality of clause (ii) of the immediately preceding sentence, without notice to the Grantor, the Collateral Agent and the Noteholders may assign or otherwise transfer their rights and obligations under this Agreement and any of the other Transaction Documents, to any other Person and such other Person shall thereupon become vested with all of the benefits in respect thereof granted to the Collateral Agent and the Noteholders herein or otherwise. Upon any such assignment or transfer, all references in this Agreement to the Collateral Agent or any such Noteholder shall mean the assignee of the Collateral Agent or such Noteholder. None of the rights or obligations of the Grantor hereunder may be assigned, delegated or otherwise transferred without the prior written consent of the Collateral Agent in its sole and absolute discretion, and any such assignment, delegation or transfer without such consent of the Collateral Agent shall be null and void.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Upon the full performance and Payment in Full of the Obligations, (i) this Agreement and the security interests created hereby shall terminate and all rights to the Collateral shall revert to the Grantor that granted such security interests hereunder, and (ii) the Collateral Agent will, upon such Grantor's request and at the Grantor's expense, (A) return to such Grantor such of the Collateral as shall not have been sold or otherwise disposed of or applied pursuant to the terms hereof and (B) execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such termination, all without any representation, warranty or recourse whatsoever.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Governing Law; Jurisdiction; Jury Trial</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any provision or rule of law (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdiction other than the State of New York.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Grantor hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or under any of the other Transaction Documents or with any transaction contemplated hereby or thereby, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim, defense or objection that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under Section 9(f) of the Securities Purchase Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Collateral Agent or the Noteholders from bringing suit or taking other legal action against the Grantor in any other jurisdiction to collect on the Grantor's obligations or to enforce a judgment or other court ruling in favor of the Collateral Agent or a Noteholder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) WAIVER OF JURY TRIAL, ETC. THE GRANTOR IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) The Grantor irrevocably and unconditionally waives any right it may have to claim or recover in any legal action, suit or proceeding referred to in this Section any special, exemplary, indirect, incidental, punitive or consequential damages.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Section headings herein are included for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together constitute one and the same Agreement. Delivery of any executed counterpart of a signature page of this Agreement by pdf, facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) This Agreement shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Obligations is rescinded or must otherwise be returned by the Collateral Agent, any Noteholder or any other Person (upon (i) the occurrence of any Insolvency Proceeding of any of the Company or the Grantor or (ii) otherwise, in all cases as though such payment had not been made).

SECTION 12. <u>Material Non-Public Information</u>. Upon receipt or delivery by the Grantor of any notice in accordance with the terms of this Agreement, unless such Grantor has in good faith determined that the matters relating to such notice do not constitute material, non-public information relating to the Grantor or any of its Subsidiaries, such Grantor shall within one (1) Business Day after any such receipt or delivery publicly disclose such material, non-public information on a Report of Foreign Private Issuer on Form 6-K or otherwise. In the event that such Grantor believes that a notice contains material, non-public information relating to such Grantor or any of its Subsidiaries, such Grantor so shall indicate to the Collateral Agent and any applicable Noteholder contemporaneously with delivery of such notice, and in the absence of any such indication, the Collateral Agent and each Noteholder shall be allowed to presume that all matters relating to such notice do not constitute material, non-public information relating to such Grantor or its Subsidiaries. Nothing contained in this <u>Section 12</u> shall limit any obligations of the Grantor, or any rights or remedies of the Collateral Agent or any Noteholder, under Section 4(l) of the Securities Purchase Agreement.

[*REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK*]

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IN WITNESS WHEREOF, the Grantor has caused this Agreement to be executed and delivered by its officer thereunto duly authorized, as of the date first above written.

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| | |
|:---|:---|
| <u>GRANTOR</u>: | <u>GRANTOR</u>: |
| **QUMULUSAI, INC.** | **QUMULUSAI, INC.** |
| By:  | /s/ Mike Maniscalo |
|  | Name: Mike Maniscalco |
|  | Title: Chief Executive Officer |

---

[Signature Page to Security and Pledge Agreement]

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ACCEPTED BY:

[\*\*\*], as Collateral Agent

By:<u> </u><u>/s/ [\*\*\*]</u><u> </u>

Name: [\*\*\*]

Title: [\*\*\*]

Address for notices:

[\*\*\*]

[Signature Page to Security and Pledge Agreement]

------

**SCHEDULE I**

**Legal Names; Organizational Identification Numbers;** 

**<u>States or Jurisdiction of Organization</u>**

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**SCHEDULE II**

**Intellectual Property**

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**SCHEDULE III**

**<u>Locations</u>**

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**SCHEDULE IV**

**Promissory Notes, Securities, Deposit Accounts,** 

**<u>Securities Accounts and Commodities Accounts</u>**

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**SCHEDULE V**

**<u>Financing Statements</u>**

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**SCHEDULE VI**

**<u>Commercial Tort Claims</u>**

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**SCHEDULE VII**

**<u>Certain Permitted Liens</u>**

------

**EXHIBIT A**

**FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT**

INTELLECTUAL PROPERTY SECURITY AGREEMENT

This INTELLECTUAL PROPERTY SECURITY AGREEMENT (as amended, modified, supplemented, renewed, restated or replaced from time to time, this "**IP Security Agreement**"), dated March 26, 2026, is made by the Persons listed on the signature pages hereof (collectively, the "**Grantor**") in favor of [\*\*\*], a Delaware limited liability company in its capacity as collateral agent (the "**Collateral Agent**") for the Noteholders. All capitalized terms not otherwise defined herein shall have the meanings respectively ascribed thereto in the Security Agreement (as defined below).

WHEREAS, QumulusAI, INC., a Georgia corporation (the "**Company**") and each party listed as a "Buyer" therein (collectively, the "**Buyers**") are parties to that certain Securities Purchase Agreement, dated March 26, 2026, pursuant to which the Company shall be required to sell, and the Buyers shall purchase or have the right to purchase, the "Notes" (as defined therein), in each case, issued pursuant thereto (as such Notes may be amended, modified, supplemented, extended, renewed, restated or replaced from time to time in accordance with the terms thereof, collectively, the "**Notes**");

WHEREAS, it is a condition precedent to the Buyers' obligation to purchase the Notes under the Securities Purchase Agreement that the Grantor has executed and delivered that certain Security and Pledge Agreement, dated March 26, 2026, made by the Grantor to the Collateral Agent (as amended, modified, supplemented, renewed, restated or replaced from time to time, the "**Security Agreement**"); and

WHEREAS, under the terms of the Security Agreement, the Grantor has granted to the Collateral Agent, for the ratable benefit of the Collateral Agent and the Noteholders, a Lien on and security interest in, among other property, certain intellectual property of the Grantor, and have agreed as a condition thereof to execute this IP Security Agreement for recording with the U.S. Patent and Trademark Office, the United States Copyright Office and other governmental authorities.

WHEREAS, the Grantor has determined that the execution, delivery and performance of this IP Security Agreement directly benefits, and is in the best interest of, the Grantor.

NOW, THEREFORE, in consideration of the premises and the agreements herein and in order to induce the Buyers to perform under the Securities Purchase Agreement, the Grantor agrees with the Collateral Agent, for the ratable benefit of the Collateral Agent and the Noteholders, as follows:

SECTION 1. <u>Grant of Security</u>. As collateral security for the due and punctual payment and performance in full of the Obligations, as and when due, the Grantor hereby pledges and assigns to the Collateral Agent, its successors and permitted assigns, and hereby grants to the Collateral Agent, its successors and permitted assigns, for the ratable benefit of the Collateral Agent and the Noteholders, a continuing Lien on and security interest in, all of such Grantor's right, title and interest in, to and under the following (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;(i) all of such Grantor's Patents and Patent applications, including those set forth on <u>Schedule A</u> hereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) all of such Grantor's Trademark and service mark registrations and applications, including those set forth in <u>Schedule A</u> hereto (provided that no security interest shall be granted in United States intent-to-use trademark applications to the extent that, and solely during the period in which, the grant of a security interest therein would impair the validity or enforceability of such intent-to-use trademark applications under applicable federal law), together with the goodwill symbolized thereby;

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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;(iii) all Copyrights, whether registered or unregistered, now owned or hereafter acquired by such Grantor, including, without limitation, the copyright registrations and applications and exclusive copyright licenses set forth in <u>Schedule A</u> hereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) all reissues, divisions, continuations, continuations-in-part, extensions, renewals and reexaminations of any of the foregoing, all rights in the foregoing provided by international treaties or conventions, all rights corresponding thereto throughout the world and all other rights of any kind whatsoever of such Grantor accruing thereunder or pertaining 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;(v) any and all claims for damages and injunctive relief for past, present and future infringement, dilution, misappropriation, violation, misuse or breach with respect to any of the foregoing, with the right, but not the obligation, to sue for and collect, or otherwise recover, such damages; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) any and all Proceeds, including without limitation Cash and Noncash Proceeds of, collateral for, income, royalties and other payments now or hereafter due and payable with respect to, and Supporting Obligations relating to, any and all of the collateral of or arising from any of the foregoing.

SECTION 2. <u>Security for Obligations</u>. The grant of a Lien on and security interest in, the Collateral by the Grantor under this IP Security Agreement constitutes continuing collateral security for the payment and performance of all Obligations of such Grantor now or hereafter existing under or in respect of the Notes and the Transaction Documents, whether direct or indirect, absolute or contingent, and whether for principal, reimbursement obligations, interest, premiums, penalties, fees, indemnifications, contract causes of action, costs, expenses or otherwise.

SECTION 3. <u>Recordation</u>. The Grantor authorizes and requests that the Register of Copyrights, the Commissioner for Patents and the Commissioner for Trademarks and any other applicable government officer record this IP Security Agreement.

SECTION 4. <u>Execution in Counterparts</u>. This IP Security Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together constitute one and the same Agreement.

SECTION 5. <u>Grants, Rights and Remedies</u>. This IP Security Agreement has been entered into in conjunction with the provisions of the Security Agreement. The Grantor does hereby acknowledge and confirm that the grant of the Lien and security interest hereunder to, and the rights and remedies of, the Collateral Agent with respect to the Collateral are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated herein by reference as if fully set forth herein.

SECTION 6. <u>Governing Law; Jurisdiction; Jury Trial</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) All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any provision or rule of law (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdiction other than the State of New York.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Grantor hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or under any of the other Transaction Documents or with any transaction contemplated hereby or thereby, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim, defense or objection that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under Section 9(f) of the Securities Purchase Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Collateral Agent or the Noteholders from bringing suit or taking other legal action against the Grantor in any other jurisdiction to collect on the Grantor's obligations or to enforce a judgment or other court ruling in favor of the Collateral Agent or a Noteholder.

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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;(iii) <u>WAIVER OF JURY TRIAL, ETC</u>. THE GRANTOR IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) The Grantor irrevocably and unconditionally waives any right it may have to claim or recover in any legal action, suit or proceeding referred to in this Section any special, exemplary, indirect, incidental, punitive or consequential damages.

[*The remainder of the page is intentionally left blank*]

------

IN WITNESS WHEREOF, the Grantor has caused this Agreement to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written.

---

| | |
|:---|:---|
| <u>GRANTOR</u>:  | <u>GRANTOR</u>:  |
| **QUMULUSAI, INC.** | **QUMULUSAI, INC.** |
| By:  |  |
|  | Name: |
|  | Title: |

---

------

**SCHEDULE A**

**<u>Intellectual Property</u>**

## Exhibit 21.1

**Exhibit 21.1**

**SUBSIDIARIES OF THE REGISTRANT**

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| | | | |
|:---|:---|:---|:---|
| **Name of Subsidiary** | **State of Incorporation or** <br> **Organization** | **Ownership** <br> **Interest** | **Names Under Which** <br> **Subsidiary Does** <br> **Business** |
| WAHA Technologies, Inc. | Georgia | 100% | Same |
| SPRE Commercial Group, Inc. | Georgia | 100% | Same |
| SPRE WATONGA OK, LLC<sup>(1)</sup> | Georgia | 100% | Same |
| SPRE Denton TX, LLC<sup>(1)</sup> | Georgia | 100% | Same |
| SPRE FOREST CITY NC, LLC<sup>(1)</sup> | Georgia | 100% | Same |
| SPRE Montgomery City MO, LLC<sup>(1)</sup> | Georgia | 100% | Same |
| SPRE TULSA OK, LLC<sup>(1)</sup> | Georgia | 100% | Same |
| SPRE Washington GA, LLC<sup>(1)</sup> | Georgia | 100% | Same |
| THE CLOUD MINDERS INC. | Delaware | 100% | Same |
| SPRE WATONGA OK HPC, LLC<sup>(2)</sup> | Georgia | 100% | Same |
| QAI Moon, LLC<sup>(3)</sup> | Georgia | 51% | Same |
| SPRE BROOKLYN NY, LLC | Georgia | <sup>(4)</sup> | Same |
| SPRE NKC MO, LLC | Georgia | <sup>(5)</sup> | Same |
| SPRE PHL PA, LLC | Georgia | <sup>(6)</sup> | Same |
| QAI Moon NKC SPV 1 LLC | Delaware | <sup>(4)</sup> | Same |

---

<sup>(1)</sup> 100% owned by SPRE Commercial Group, Inc. and, therefore, indirectly owned by QumulusAI, Inc.

<sup>(2)</sup> 100% owned by SPRE WATONGA OK, LLC and, therefore, indirectly owned by QumulusAI, Inc.

<sup>(3)</sup> 51% owned by THE CLOUD MINDERS INC. and, therefore, indirectly partially owned by QumulusAI, Inc.

<sup>(4)</sup> 100% owned by QAI Moon, LLC and, therefore, indirectly partially owned by QumulusAI, Inc.

<sup>(5)</sup> 35% owned by THE CLOUD MINDERS INC. and 30% owned by QAI Moon, LLC and, therefore, indirectly partially owned by QumulusAI, Inc.

<sup>(6)</sup> 55% owned by QAI Moon, LLC and 22.5% owned by THE CLOUD MINDERS INC. and, therefore, indirectly partially owned by QumulusAI, Inc.

## Exhibit 23.1

**Exhibit 23.1**

**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

We hereby consent to the use in the Prospectus constituting a part of this Registration Statement on Amendment No.3 to Form S-1 of QumulusAI, Inc., formerly Global Digital Holdings Inc. and Subsidiaries, of our report dated April 7, 2026, relating to the consolidated financial statements of QumulusAI, Inc. as of and for the years ended December 31, 2025 and 2024, which is contained in that Prospectus. We also consent to the reference to our firm under the caption "Experts" in the Prospectus.

/s/ WithumSmith+Brown, PC.

Whippany, New Jersey

May 1, 2026

## Exhibit 23.2

**Exhibit 23.2**

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| | |
|:---|:---|
| ![bps.jpg](bps.jpg) | **BPS & Associates, LLC**<br> **6021 University Blvd Ste. 470** <br> **Ellicott City, MD 21043**<br>**Tel: (443) 973-6892** <br> **Fax: (443) 973-6897**<br>***Certified Public Accountants*** |

---

**CONSENT OF INDEPENDENT AUDITORS**

We consent to the inclusion in this Registration Statement on Amendment No. 3 to Form S-1 (the "Registration Statement") of QumulusAI, Inc. of our report dated July 3, 2025, relating to the financial statements of The Cloud Minders, Inc. as of December 31, 2024 and 2023 and for the years then ended, which report appears in the Registration Statement.

We also consent to the reference to our firm under the heading "Experts" in this Registration Statement.

![bpslogo2.jpg](bpslogo2.jpg)

Ellicott City, Maryland

May 1, 2026