# EDGAR Filing Document

**Accession Number:** 0001837254
**File Stem:** 0001213900-25-084203
**Filing Date:** 2025-9
**Character Count:** 1071557
**Document Hash:** 956b8624bbcbc0d7cc120c6124b9fa45
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-25-084203.hdr.sgml**: 20250904

**ACCESSION NUMBER**: 0001213900-25-084203

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

**PUBLIC DOCUMENT COUNT**: 24

**FILED AS OF DATE**: 20250904

**DATE AS OF CHANGE**: 20250903

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Functional Brands Inc.
- **CENTRAL INDEX KEY:** 0001837254
- **STANDARD INDUSTRIAL CLASSIFICATION:** MEDICINAL CHEMICALS & BOTANICAL PRODUCTS [2833]
- **ORGANIZATION NAME:** 03 Life Sciences
- **EIN:** 854094332
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** S-1/A
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-284180
- **FILM NUMBER:** 251291478

**BUSINESS ADDRESS:**
- **STREET 1:** 8605 SANTA MONICA BLVD
- **CITY:** WEST HOLLYWOOD
- **STATE:** CA
- **ZIP:** 90069
- **BUSINESS PHONE:** 7789383367

**MAIL ADDRESS:**
- **STREET 1:** 8605 SANTA MONICA BLVD
- **CITY:** WEST HOLLYWOOD
- **STATE:** CA
- **ZIP:** 90069

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** HT Naturals Corp.
- **DATE OF NAME CHANGE:** 20201218

As filed with the Securities and Exchange Commission on September 3, 2025.

**Registration No. 333-284180**

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

 **Amendment No. 10**

**to**

**FORM S-1**

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

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| |
|:---|
| &nbsp;&nbsp;**FUNCTIONAL BRANDS INC.**<br> (formerly HT Naturals Inc.) |
| &nbsp;&nbsp;**(Exact name of registrant as specified in its charter)** |

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Delaware** | &nbsp;&nbsp;**325411** | &nbsp;&nbsp;**85-4094332** |
| &nbsp;&nbsp;(State or other jurisdiction of<br> incorporation or organization) | &nbsp;&nbsp;(Primary Standard Industrial<br> Classification Code Number) | &nbsp;&nbsp;(I.R.S. Employer<br> Identification Number) |

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**6400 SW Rosewood Street**

**Lake Oswego, Oregon 97035**

**(800) 245-8282**

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

**Eric Gripentrog** 

**Chief Executive Officer**

**6400 SW Rosewood Street**

**Lake Oswego, Oregon 97035**

**(800) 245-8282**

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

***Copies to:***

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| | |
|:---|:---|
| <br> **Ross D. Carmel, Esq.**<br> **Barry P. Biggar, Esq.** <br> **Sichenzia Ross Ference Carmel LLP** <br> **1185 Avenue of the Americas, 31<sup>st</sup> Floor**<br> **New York, NY 10036**<br> **(212) 930-9700** | **Eric Gripentrog**<br> **Tariq Rahim**<br> **Functional Brands Inc.**<br> **6400 SW Rosewood Street**<br> **Lake Oswego, Oregon 97035**<br> **(800) 245-8282** |

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Approximate date of commencement of proposed sale to the public: **As soon as practicable after this Registration Statement becomes 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. ☐

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, 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 comply with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of Securities Act. ☐

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

**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 is effective. This prospectus is not an offer to sell these securities, and it is not soliciting offers to buy these securities in any state where the offer or sale is not permitted.**

**SUBJECT TO COMPLETION, DATED SEPTEMBER 3, 2025**

**PRELIMINARY PROSPECTUS**

**FUNCTIONAL BRANDS INC.** 

**17,883,693 Shares of Common Stock**

This prospectus relates to the registration of the resale of up to 17,883,693 shares of our common stock by our stockholders identified in this prospectus, or the Registered Stockholders, in connection with our direct listing, or the Direct Listing, on the Nasdaq Capital Market, or Nasdaq. Unlike an initial public offering, the resale by the Registered Stockholders is not being underwritten on a firm commitment basis by any investment bank. The Registered Stockholders may, or may not, elect to sell their shares of common stock covered by this prospectus, as and to the extent they may determine. The Registered Stockholders may offer, sell or distribute all or a portion of the shares of common stock hereby registered publicly or through private transactions at prevailing market prices or at negotiated prices. We will not be involved in the price setting process. If the Registered Stockholders choose to sell their shares of common stock, we will not receive any proceeds from the sale of such shares.

We have engaged Joseph Gunnar & Co., LLC, as our financial advisor or Advisor, to advise and assist us with respect to certain matters relating to the Direct Listing. We previously engaged Joseph Gunnar& Co., LLC, to act as placement agent in a private placement transaction for the sale of our Series A Convertible Preferred Stock with a stated value of $10,000,000 for a funding amount of $8,000,000, together with a bonus Series B Convertible Preferred Stock. The aggregate price per share attributable to Series A and Series B Convertible Preferred Stock is $80.00. The private placement documents were executed and delivered by all the parties thereto on July 22, 2025. Funding of the purchase of such preferred stock is conditioned upon, among other things, completion of the Direct Listing. All shares of our common stock underlying such convertible preferred stock are being registered by means of this registration statement. Unless otherwise indicated, all information regarding the number of shares of our common stock outstanding as of the date of this prospectus, the Registered Stockholders and the number of shares of our common stock that may be sold pursuant to this prospectus gives effect to such issuance. The price of our securities sold in the private placement transaction may bear little or no relation to the trading price of our common stock at or subsequent to the opening of trading on Nasdaq. For more information on the private placement and the preferred stock to be issued thereunder, see "*Plan of Distribution"* beginning on page 127 of this prospectus.

No public market for our common stock currently exists, and our shares of common stock have a limited history of trading in private transactions. From inception through December 31, 2024, we raised an aggregate of approximately $3,237,683 in gross proceeds from the sales of our stock at an average price of $1.28 per share.

Recent purchase prices of our common stock in private transactions may have little or no relation to the opening public price of our shares of common stock on Nasdaq or the subsequent trading price of our shares of common stock on Nasdaq. 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 our Advisor, in its capacity as our financial advisor, must notify Nasdaq that our shares are "ready to trade." Once the Advisor has notified Nasdaq that our shares of common stock are ready to trade, Nasdaq will confirm the Current Reference Price for our shares of common stock, in accordance with Nasdaq rules. If the Advisor then approves proceeding at the Current Reference Price, the applicable orders that have been entered will be executed at such price and regular trading of our shares of common stock on Nasdaq will commence, subject to Nasdaq conducting validation checks in accordance with Nasdaq rules. Under Nasdaq rules, the "Current Reference Price" means: (i) the single price at which the maximum number of orders to buy or sell can be matched; (ii) if there is more than one price at which the maximum number of orders to buy or sell can be matched, then it is the price that minimizes the imbalance between orders to buy or sell (i.e. minimizes the number of shares that would remain unmatched at such price); (iii) if more than one price exists under (ii), then it is the entered price (i.e. the specified price entered in an order by a customer to buy or sell) at which our shares of common stock will remain unmatched (i.e. will not be bought or sold); and (iv) if more than one price exists under (iii), a price determined by Nasdaq in consultation with the Advisor in its capacity as our financial advisor. In the event that more than one price exists under (iii), the Advisor will exercise any consultation rights only to the extent that it can do so consistent with the anti-manipulation provisions of the federal securities laws, including Regulation M, or applicable relief granted thereunder; in connection therewith. The Registered Stockholders will not be involved in Nasdaq's price-setting mechanism, including any decision to delay or proceed with trading, nor will they control or influence the Advisor in carrying out its role as a financial adviser. The Advisor will determine when our shares of common stock are ready to trade and approve proceeding at the Current Reference Price primarily based on considerations of volume, timing and price. In particular, the Advisor will determine, based primarily on pre-opening buy and sell orders, when a reasonable amount of volume will cross on the opening trade such that sufficient price discovery has been made to open trading at the Current Reference Price. For more information, see "*Plan of Distribution*" beginning on page 127 of this prospectus.

We have applied to list our common stock on the Nasdaq Capital Market under the symbol "MEHA*.*" We expect our common stock to begin trading on Nasdaq on or about September__, 2025.

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 or the private placement of preferred stock described above. 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 and not close on the private placement.

**We are an "emerging growth company" and a "smaller reporting company" as defined under the federal securities laws and, as such, have elected to comply with certain reduced public company reporting requirements for this prospectus and may elect to do so in future filings. See "*Prospectus Summary—Implications of Being an Emerging Growth Company and a Smaller Reporting Company*."**

**Investing in our common stock involves a high degree of risk. See the section of this prospectus entitled "Risk Factors" beginning on page 14 for a discussion of information that should be considered in connection with an investment in our common stock.**

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

**Prospectus dated ___, 2025.**

**Table of Contents**

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| | |
|:---|:---|
|  | **Page** |
| [About this Prospectus](#a_001) | ii |
| [Prospectus Summary](#A_002) | 1 |
| [Risk Factors](#A_003) | 14 |
| [Cautionary Statement Regarding Forward-Looking Statements](#A_004) | 38 |
| [Use of Proceeds](#A_005) | 39 |
| [Dividend Policy](#A_006) | 40 |
| [Capitalization](#A_007) | 41 |
| [Management's Discussion and Analysis of Financial Condition and Results of Operations](#A_008) | 42 |
| [Business](#A_009) | 54 |
| [Management](#A_010) | 84 |
| [Executive and Director Compensation](#A_011) | 89 |
| [Certain Relationships and Related Party Transactions](#A_012) | 91 |
| [Principal and Registered Stockholders](#A_013) | 92 |
| [Description of Securities](#A_014) | 120 |
| [Shares Eligible for Future Sale](#A_015) | 123 |
| [Material U.S. Federal Tax Considerations for Non-U.S. Holders of Our Common Stock](#A_016) | 124 |
| [Plan of Distribution](#a_017) | 127 |
| [Legal Matters](#A_018) | 130 |
| [Interests of Named Experts and Counsel](#A_018a) | 130 |
| [Experts](#A_019) | 130 |
| [Where You Can Find More Information](#A_020) | 130 |

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**You should rely only on the information contained in this prospectus or contained in any free writing prospectus filed with the Securities and Exchange Commission. Neither we nor any of the Registered Stockholders have authorized anyone to provide any information different from, or in addition to, the information contained in this prospectus and in any free writing prospectuses we have prepared or that have been prepared on our behalf or to which we have referred you. Neither we nor any of the Registered Stockholders take responsibility for, and can provide no assurance as to, the reliability of any other information that others may give you. The Registered Stockholders are offering to sell, and seeking offers to buy, shares of their common stock only under the circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date, regardless of the time of delivery of this prospectus or of any sale of our common stock. Our business, financial condition, results of operations and prospects may have changed since such date.**

**For investors outside the United States: Neither we nor any of the Registered Stockholders have done anything that would permit the use of or possession or distribution of this prospectus or any related free writing 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 offering of the shares of our common stock by the Registered Stockholders and the distribution of this prospectus outside the United States.**

**TRADEMARKS, TRADE NAMES AND SERVICE MARKS**

We use various trademarks, trade names and service marks in our business, including "*Biofilm Defense," "Flura," "Isogest;" "HempTown," "Nu-Thera," "HT Naturals," "HempTown Naturals," "Ultra Tested," "Functional Brands," and "Kirkman*," among others. For convenience, we may not include the SM, <sup>®</sup> or <sup>™</sup> symbols, but such omission is not meant to indicate that we would not protect our intellectual property rights to the fullest extent allowed by law. Any other trademarks, trade names or service marks referred to in this prospectus are the property of their respective owners.

**INDUSTRY AND MARKET DATA**

This prospectus includes industry data and forecasts that we obtained from industry publications and surveys, as well as public filings and internal company sources. Industry publications, surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy or completeness of the included information. Statements as to our ranking, market position and market estimates are based on management's estimates and assumptions about our markets and our internal research. We have not independently verified such third-party information, nor have we ascertained the underlying economic assumptions relied upon in those sources, and we cannot assure you of the accuracy or completeness of such information contained in this prospectus. Such data involves risks and uncertainties and is subject to change based on various factors, including those discussed under "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements."

Our board of directors approved a 1-for-18.338622 reverse stock split of all classes of our issued and outstanding capital stock (the "Reverse Stock Split"). On January 22, 2025, we filed a certificate of amendment of certificate of incorporation with the State of Delaware to immediately effect the Reverse Stock Split. All share and per share information in this prospectus are presented after giving effect to the Reverse Stock Split retrospectively for all periods presented, unless otherwise stated or the context otherwise requires.

i

**<u>ABOUT THIS PROSPECTUS</u>**

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

This prospectus contains summaries of certain provisions contained in some of the documents described herein, but reference is made to the actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents. Copies of some of the documents referred to herein have been filed or will be filed as exhibits to the registration statement of which this prospectus is a part, and you may obtain copies of those documents as described under "*Where You Can Find Additional Information*."

ii

**PROSPECTUS SUMMARY**

*This summary highlights selected information contained elsewhere 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 securities. You should carefully read the entire prospectus, including the risks associated with an investment in our company discussed in the "Risk Factors" section of this prospectus, before making an investment decision. Some of the statements in this prospectus are forward-looking statements. See the section titled "Cautionary Statement Regarding Forward-Looking Statements."*

Our company consists of two primary legal entities: Functional Brands Inc. (formerly HT Naturals Inc.), a Delaware corporation ("Functional Brands") and HTO Nevada Inc., a Delaware corporation dba Kirkman ("HTO Nevada"). HTO Nevada was acquired by Functional Brands through a corporate restructuring consummated on May 19, 2023. Functional Brands was previously a majority owned subsidiary of Hemptown Organics Corp., a British Columbia corporation ("HOC"). On August 5, 2025, HOC distributed to holders of its common stock 1,240,665 shares of Functional Brands common stock as a return on paid in capital. Pursuant to exchange agreements with holders of certain debentures of HOC, such holders exchanged on July 11, 2025 all of their debentures for 3,576,033 shares of common stock of Functional Brands held by HOC .All such shares so distributed or exchanged are being registered pursuant to this registration statement. As of August 11, 2025, Functional Brands ceased to be deemed a controlled company. As of the date of this prospectus, HOC holds no shares of Functional Brands. HTO Nevada operates in the nutraceutical and supplement industry through the Kirkman entities as a manufacturer and distributor of health supplements in different categories further described in this prospectus. Functional Brands Inc. operates certain hemp derived products in different categories further described in this prospectus. HOC is a holding company with various interests in nutraceutical manufacturing and federally legal industrial hemp products, HOC owns intellectual property, including brands and pending trademarks, as well as other intangible assets, such as "Hemptown", "Hemptown USA" Brand and logo pending trademark. Functional Brands has a perpetual license to use and operate the HOC brand and logo. In this prospectus, "Functional Brands," "HempTown," "HTO Nevada Inc," "Kirkman," "we," "us," "our," "our company," and similar references refer to Functional Brands Inc.

**OUR COMPANY**

**Overview**

Our company operates in the nutraceutical supplement industry. We are a manufacturer and distributor of supplements in categories such as pain, energy, prenatal, general health, bone and joint, gastro, immunity, cardiac, detox, mental clarity & focus, sleep, prenatal and urinary. Our end markets focus on end-consumers through different channels that include pharmacies, US wholesalers, international distributors and direct-to-consumers sales. Our products are sold over the counter, and consumers do not need a prescription to purchase our products. Our products are not approved by the FDA. Our company also operates in the hemp industry as a retailer of hemp derived products in categories such as capsules, cigarettes, gummies, and tinctures with a commercial end market, and end-consumers.

**Our Products**

 

*Kirkman Brand*

Our "Kirkman" brand products are manufactured in our FDA registered, cGMP certified facility in Lake Oswego, Oregon. Established in 1949, Kirkman specializes in manufacturing nutritional supplements and is one of the oldest companies dedicated to serving the special needs community.

Our Kirkman brand offers more than 150 products, including probiotics, enzymes, vitamins, multivitamins, amino acids, antioxidants, immune support, essential fatty acids, preconception, prenatal supplements, personal care products and other specialty products. Kirkman treats patients with autism spectrum disorders and special dietary needs through an established network of over 2,000 doctors in over 40 countries. Our Kirkman brand operates in 95% of the major subsegments in the supplement industry. Kirkman has a long-standing loyal customer and consumer base due to the rigorous testing of products in compliance with FDA requirements. Kirkman has been endorsed by various businesses and celebrities, including the famous and original Shark Tank member, Kevin Harrington.

<u>Digestive enzymes</u>: Over the counter oral digestive enzyme supplements are a combination of proteases, which aid protein digestion; lipases, which aid in fat digestion; and amylases, which aid in carbohydrate digestion. These may be prescribed by a doctor in some cases, when the pancreas does not make enough digestive enzymes on its own. People are increasingly taking over the counter ("OTC") digestive enzymes in lower doses to support general gut health.

<u>Essential fatty acids</u>: Also called omega-3 fatty acids, essential fatty acids are important digestive chemicals that the body cannot make on its own.

Our products under the Kirkman Brand include, but are not limited to, the following:

● Supplements for Autism; ● Essential Fatty Acids;

● Oxytocin; ● Vitamin B12;

● Vitamin B6 and Magnesium; ● Glutathione;

● Melatonin; ● Functional Mushrooms;

● Probiotics; ● Multivitamins and Minerals; and

● Digestive Enzymes; ● Antioxidants.

● Amino Acids;

 

*P2i (prenatal) Brand*

We launched a certified prenatal vitamin in April 2024 for expectant mothers under the P2i by Kirkman brand. These vitamins have been specially formulated by our company to provide essential nutrients for both the mother and the developing fetus. The International Federation of Gynecology and Obstetrics ("FIGO") published a position statement about toxic chemicals and environmental contaminants in prenatal vitamins. FIGO's recommendation from the October 2023 position statement highlights that patients should only consume, and clinicians should only prescribe, vitamins and supplements that have been independently assessed to make certain they do not contain contaminants. Manufacturers should be held to a standard of production that assures safety and minimizes contaminants and certification of all prenatal vitamins becomes the standard of care. The FIGO Committee report on Climate Change and Toxic Environmental Exposures brought together global scientists to review reputable reference sources for chemicals that have the potential to impact maternal and newborn health, including the USA Environmental Protection Agency, the European Union, and the California EPA.

The group of experts recommended several approaches, including:

&nbsp;&nbsp;&nbsp;&nbsp;1. creating
 a list of toxic chemicals and contaminants that should be screened for in Prenatal Vitamins
 and reduced to de minimis standards; and

&nbsp;&nbsp;&nbsp;&nbsp;2. conducting
 assays of existing vitamins to assess ongoing risk to maternal and newborn health. This work
 can extend to personal exposure risk by offering women testing for the presence of potentially
 toxic environmental chemicals. Mass Spectrometry currently offers the most comprehensive
 measurement.

This first publication of a list of toxic chemicals and contaminants represents the most comprehensive testing available at present but does not purport to identify or eliminate all potential sources of toxicity.

We are currently the only certified prenatal vitamin in the market that aligns to the FIGO position statement. We have formulated and produced a prenatal vitamin called P2i by Kirkman. There are approximately 3.6 million pregnancies alone in the United States (https://www.cdc.gov/nchs/fastats/births.htm) and the initial market focus for this product will be the United States with the expectation to expand globally since FIGO's position statement reaches all countries.

The P2i by Kirkman prenatal vitamin has been certified by The FORUM, a nonprofit 501(c)(3) organization dedicated to promoting low-toxicity standards for prenatal healthy products. The FORUM operates under a Memorandum of Understanding (MOU) with FIGO, a globally recognized organization of obstetricians and gynecologists. This MOU establishes a shared objective to reduce environmental toxicity in prenatal products.

● The certification process involves rigorous testing and evaluation to ensure compliance with The FORUM's low-toxicity standards, which align with FIGO's objectives for maternal and fetal health. These standards include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Analysis
 of 24 Heavy Metals, ensuring levels are below stringent safety thresholds

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Testing
 for the presence of 120 toxic chemicals, such as pesticides and endocrine disruptors, with
 strict limits to prevent potential harm

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Utilization
 of ISO 17025-accredited laboratories for all testing to ensure reliability and reproducibility
 of results

● Purity Labs, an ISO 17025-accredited laboratory, as directed by The FORUM, conducted testing, which confirmed the product's compliance with The FORUM's criteria. Based on this testing, The FORUM issued its certification, indicating that Kirkman's prenatal vitamin meets its standards for low toxicity and safety.

*HempTown Naturals Brand*

All HempTown Naturals products are produced and sold in compliance with the US 2018 Farm Bill and the US Agricultural Act of 2014. Cannabidiol ("CBD") and cannabigerol ("CBG") are cannabinoids present in the cannabis plant. Both CBD and CBG are used in hemp derived products. These products are believed to help in treating certain neurodegenerative and inflammatory conditions.<sup>1</sup>

CBD

CBD is the second most prevalent ingredient in cannabis. While CBD is an integral component of medical marijuana, it is derived directly from the hemp plant, both of which are the same species of Cannabis sativa L. One of the hundreds of components of Cannabis sativa L., CBD does not cause a "high" by itself. According to a report from the World Health Organization, "In humans, CBD exhibits no effects indicative of any abuse or dependence potential. To date, there is no evidence of public health related products associated with the use of pure CBD."<sup>2</sup>

As reported by Forbes Health, CBD is applied topically or consumed through smoke inhalation or edible consumption. CBD interacts with neuroreceptors in your endocannabinoid system, which sends signals between your cells to help regulate your movement, mood, homeostasis, and immune system. Different studies have shown that CBD can offset everyday anxiety and depression.<sup>3</sup>

CBG

CBG is another compound found in hemp which doesn't have intoxicatingly psychoactive effects. CBG, often referred to by experts as "the mother of all cannabinoids," is the cannabinoid from which other types of cannabinoids (including CBD) are derived, says Michelle Sexton, a naturopathic doctor who works at the Pain Trauma Institute in San Diego. "CBG is the first compound in the biosynthesis (the production of chemical compounds by a living organism) of the other cannabinoids," she adds.

CBG is available in many forms, including tinctures, gummies, capsules and topical creams and lotions. CBG is often coupled with CBD in these products because the two cannabinoids can provide complimentary benefits, such as decreasing inflammation and pain, says Fraser Smith, a naturopathic doctor, as well as assistant dean and associate professor at the National University of Health Services in Lombard, Illinois. CBD and CBG occur naturally in hemp extract which is the source of our cannabinoids.<sup>4</sup>

 

*Golf Mellow Brand*

The Company has utilized existing product formulations with plans to introduce 12 different products under the Golf Mellow brand. A brand logo and packaging has been created to support the existing formulations. These supplements will be targeting the golf industry and golf professionals. These products include capsules, a powder, a cream and tinctures to help golfers of all levels improve their game and overall well-being. The capsules are packed with a blend of essential vitamins and minerals that support joint health, flexibility, and energy levels. The tinctures are made from all-natural ingredients and provide a quick and easy way to support focus and mental clarity, helping athletes stay in the zone and make the perfect shot. The creams are specially designed to provide targeted relief for sore muscles and joints, helping them stay comfortable and focused on the course. Some of these products include Sleep Caps to ensure that players are well rested the night before, Super B12 Powder which provides the energy needed for the perfect round, Calm Caps which help manage anxiety when players need it most, and Epsom Salt Cream & Recovery Caps, which aids with recovery.

According to data from the National Golf Foundation 28.1 million people (aged six and over) played on a golf course in the United States in 2024 – furthermore there were another 19.1 million people who took part in off-course activities like driving ranges, indoor golf simulators or venues like Topgolf.<sup>5</sup>

<sup>1</sup> https://www.medicalnewstoday.com/articles/cgb-vs-cbd

<sup>2</sup> www.health.harvard.edu

<sup>3</sup> www.forbes.com/health/body/cbd-oil-benefits/

<sup>4</sup> www.forbes.com/health/body/cannabigerol-cbg/

<sup>5</sup> https:// https://www.ngf.org/the-clubhouse/golf-industry-research/

**Competitive Strengths**

The Kirkman brand has been in business for over 70 years with a loyal consumer base and we believe that we maintain high purity and quality standards in the industry. We source all materials from high quality suppliers. We test finished goods in certified laboratories with state-of-the-art equipment and manufacture our supplements in US-based cGMP certified and FDA registered facility located in Lake Oswego, Oregon. The FDA requires that we conduct at least one appropriate test or examination to verify and identify any component that is a dietary ingredient. We conduct ingredient testing by verifying the identity through ISO certified 3rd party laboratories. We also test for residual solvents and pesticides (where applicable), presence of up to 24 heavy metals and microbial contamination that could lead to illness or death. Microbial tests can include, but are not limited to, aerobic plate count, yeast & mold, coliforms, E. coli, pseudomonas, staphylococcus aureus, Bile Tolerant gram negative, Salmonella, Aflatoxins and listeria. Heavy metals testing includes beryllium, aluminum, vanadium, chromium, manganese, cobalt, nickel, copper, zinc, arsenic, selenium, molybdenum, palladium, silver, cadmium, tin, antimony, barium, tungsten, platinum, thallium, lead, uranium and mercury. For incoming raw ingredients, we ID using the following methods: Botanicals – HPLC (High Pressure Liquid Chromatography) or TLC (Thin Layer Chromatography), or an approved Chemical test; Vitamins – IR (Infrared) absorption, Chemical test, UV (Ultraviolet) absorption, UV fluorescence, GC (Gas Chromatography), HPLC; Minerals – ICP-MS (Inductively Coupled Plasmas – Mass Spectroscopy), IR (Infrared), Chemical tests, TLC (Thin Layer Chromatography); Enzymes – HPLC (High Pressure Liquid Chromatography), PCR (Polymerase Chain Reaction); Amino Acids – IR absorption, Optical Rotation, HPLC, TLC, GC (Gas Chromatography), Assay; Probiotics – PCR and HPLC; Metals – HPLC or ICP-MS; Micros – Cell culture and cell identification. The FDA requires that a finished batch of the dietary supplement meets product specifications for identity, purity, strength, composition, and for limits on those types of contamination that may adulterate or that may lead to adulteration of the finished batch of the dietary supplement. This can be conducted for a subset of finished dietary supplement batches through a sound statistical sampling plan (or for every finished batch). For our business, we test every batch of products to ensure heavy metals are below Pop 65 limits. In addition, every batch is tested for microbial contamination. Our 75+ year history in the industry, along with our rigorous material testing, allows Kirkman to use statistical sampling to ensure the identity, purity and strength of each product is met. Our formulations use proprietary blends. Although we are authorized to produce hemp derived products because we hold a hemp handler's license, we currently do not grow any hemp, but we source our hemp derived products from registered growers in operation. The FDA does not require any testing on dietary supplements whereas we test for approximately 90 metals and toxins in raw materials.

As stated above we launched P2i by Kirkman prenatal vitamin, in 2024, which is the only certified prenatal vitamin that aligns to FIGO's position statement.

The P2i by Kirkman prenatal vitamin has been certified by The FORUM, a nonprofit 501(c)(3) organization dedicated to promoting low-toxicity standards for prenatal healthy products. The FORUM operates under a Memorandum of Understanding (MOU) with the FIGO, a globally recognized organization of obstetricians and gynecologists. This MOU establishes a shared objective to reduce environmental toxicity in prenatal products.

● The certification process involves rigorous testing and evaluation to ensure compliance with The FORUM's low-toxicity standards, which align with FIGO's objectives for maternal and fetal health. These standards include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Analysis
 of 24 Heavy Metals, ensuring levels are below stringent safety thresholds

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Testing
 for the presence of 120 toxic chemicals, such as pesticides and endocrine disruptors, with
 strict limits to prevent potential harm

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Utilization
 of ISO 17025-accredited laboratories for all testing to ensure reliability and reproducibility
 of results

● Purity Labs, an ISO 17025-accredited laboratory, as directed by The FORUM, conducted testing, which confirmed the product's compliance with The FORUM's criteria. Based on this testing, The FORUM issued its certification, indicating that Kirkman's prenatal vitamin meets its standards for low toxicity and safety.

We have an exclusive license agreement with the Trailer Park Boys ("TBP") to market and sell hemp derived products. There are two product categories that include Hemp Derived Delta 9 products. This includes Delta 9 gummies and Delta 9 Drink Enhancers. . The revenue from these two product categories represents approximately 0.6% of total company revenue. entered. To date, $575,000 has been paid to TBP under the license agreement and TBP has been issued 14,440 shares of common stock of the Company. The Company and TBP are negotiating a termination of the license agreement effective as of December 31, 2025, with up to a maximum of $150,000 in remaining accrued royalties to be paid by the Company to TBP no later than March 31, 2026.

**Growth Strategy**

We aim to be a leader in the nutraceutical space by manufacturing products held to the highest standard of quality in terms of toxins, metals, and other impurities. Our goal is to build a well-rounded portfolio of products including mushroom-based supplements targeted for everyday use, prenatal, athletes and beyond.

We plan to do this by:

● Strengthening our existing 70-year-old Kirkman brand with its established base of consumers in the autism community by curating our product mix to cater to their specific needs;

● Launching multiple brands, broad as well as niche, including P2i by Kirkman which is the only certified prenatal vitamin supporting FIGO's October 2023 position statement, to allow us to increase our market share;

● Modernizing our manufacturing capabilities by reorganizing the space and introducing new and efficient machinery and equipment to significantly enhance our output;

● Investing heavily into our sales and marketing activities as well as business development in order to increase sales and distribution; and

● Identify key companies with synergistic strengths for partnerships or acquisitions.

**Challenges, Risks and Limitations**

Our ability to utilize our competitive advantages in order to strengthen and expand our business and achieve our growth plan is subject to a number of risks and uncertainties more fully discussed under "Risk Factors" in this Prospectus. As discussed in our financial statements, we have suffered recurring losses from operations and have a significant accumulated deficit. In addition, we continue to experience negative cash flows from operations. This limited working capital capability may delay or make the accomplishment of our growth plans difficult. In assessing the likelihood of our future success, investors in this offering should note our history of losses and the likelihood of our operating profitably in the future. Further, some of our products may be subject to uncertain and evolving federal, state, and local regulations concerning hemp, CBD, CBG, and other non-tobacco consumable products. Because the type, timing, and impact of such regulations remain uncertain, we cannot give any assurance that such actions will not have a material adverse effect on this emerging business and our strategy.

**Our Corporate History and Structure**

Functional Brands was organized under the General Corporation Law in the State of Delaware on November 19, 2020, under the name HT Naturals Inc. HT Naturals Inc. changed its name to Functional Brands Inc. on March 23, 2023. Our principal business is the production, marketing, sales, and distribution of nutraceutical products through our Kirkman division, alongside our hemp derived products under the Hemptown brand in certain states within the United States that permit such sales. We ship our Kirkman products to all US states. As for hemp derived products, we only sell to states which permit this activity with certain restrictions, such as the content of THC, which differs depending on the state.

The states in which we have sold hemp derived products in the past are Alabama, Arizona, Arkansas, California (D9 ingestible and CBD/CBG ingestible only), Colorado (CBD/CBG inhalable only), Connecticut, Delaware (D9 ingestible), Florida, Georgia (D9 ingestible and CBD/CBG ingestible only), Hawaii (CBD/CBG ingestible only), Illinois(D9 ingestible and CBD/CBG inhalable), Indiana (D9 ingestible only), Iowa (D9 ingestible only), Kansas, Kentucky (D9 ingestible only), Louisiana, Maine (D9 ingestible and CBD/CBG inhalable), Maryland (CBD/CBG inhalable only), Massachusetts, Michigan, Minnesota, Missouri, Montana, Nevada, New Hampshire, New Jersey, New York (D9 and CBD/CBG ingestible only), North Carolina, North Dakota (CBD/CBG ingestible only), Ohio, Oklahoma, Oregon (CBD/CBG ingestible only), Pennsylvania, Rhode Island, South Carolina, South Dakota (D9 ingestible only), Tennessee (CBD/CBG inhalable only), Texas, Virgina (CBD/CBG ingestible and inhalable only), Washington (CBD/CBG Inhalable only), West Virginia, Wisconsin, Wyoming. We have engaged specialized hemp counsel to provide regular updates on the 50 states and the legality of our hemp products in each state. In addition, we have established and followed a standard of operating procedure (SOP) to ensure sales do not occur in the states where hemp products may not be sold consistent with the regular updates provided by our hemp counsel. We have an internal policy that prohibits us as a company and any of our executives, directors, employees, sales representatives, and distributors from distributing any of the Company's hemp derived products in places in which the sale of hemp derived products is prohibited.

We were originally a majority owned subsidiary of Hemptown Organics Corp. ("HOC"), a British Columbia, Canada private operating holding company with various interests in nutraceutical manufacturing and federally legal industrial hemp products. We were granted a licensing agreement by Hemptown Organics Corp. The licensing agreement, dated December 10, 2020, provides Functional Brands Inc. as licensee, a license to use the Hemptown USA and Hemptown Naturals brand and trademarks on a perpetual, non-exclusive, non-transferable basis, with no expiration date. This licensing agreement will transfer full ownership to Functional Brands upon the effective date of this registration statement and listing on the exchange.

On July 3, 2019, HTO Holdings Inc. ("HTO Holdings") a wholly owned subsidiary of HOC and the owner of all issued and outstanding stock of HTO Nevada (as "Purchaser"), entered into an asset purchase agreement ("APA") for the net assets of Kirkman Group Inc. a Nevada corporation, Kirkman Laboratories Inc., an Oregon corporation and Kirkman Group International, Inc. a Nevada corporation (collectively "Kirkman" or the "Seller," and together with Purchaser, the "Parties") for a consideration equal to $5 million with payout in a business combination of cash and deferred consideration. The "Seller" is David Humphrey. Under the APA, Purchaser and HTO Holdings were to make certain additional payments toward the purchase price. The APA was amended on November 30, 2021 by the Parties with the purpose of modifying the payment schedule of the deferred consideration; and in exchange for amending the payment schedule of the deferred consideration, the Purchaser and HTO Holdings agreed to enter into a security agreement, and amend the APA and other agreements attached to the APA (including, but not limited to, the non-competition agreement, the trademark assignment agreement, the domain names transfer agreement, the assignment of intangible assets, and the intellectual property security agreement (collectively, the "IP Collateral Agreements") to, among other things, provide additional collateral as security to Seller. Upon payment in full in cash of the deferred consideration or set-off of the deferred consideration, as amended: (i) each of the Parties agreed that the security agreement and amended intellectual property security agreement would be automatically terminated and be of no further force and effect; and (ii) Seller would, at its sole cost and expense, release all liens in the IP Collateral, as defined in the respective security agreement and intellectual property security agreement, and all rights therein would forthwith revert to Purchaser. On May 16, 2022, the APA was amended again by the Parties, to reflect further modifications to the schedules and exhibits to the APA and IP Collateral Agreements. On May 31, 2022, Purchaser paid Seller certain amounts ("Immediate Payments"), and on July 23, 2022, Purchaser and Seller executed a forbearance agreement ("Forbearance Agreement") to extend the payments due under the APA to August 31, 2022. After Purchaser's default, and partial payment to Seller in September 2022, the Parties executed an amendment to the Forbearance Agreement on December 27, 2022, to extend certain payments due under the APA, at which time the remaining balance due was $3,032,000.

On September 24, 2024, the Company executed a Fourth Amended Forbearance Agreement which allowed the postponement of principal payments. As of May 28, 2025, the remaining balance due is $2,227,366 (the "Existing Default"). On May 28, 2025, the Company executed a Sixth Amended Forbearance Agreement (the "Sixth Amendment") to provide Purchaser with a period of time to cure the Existing Default and Purchaser and the Company also executed a Confession of Judgement for Money Awarded and Decree of Foreclosure which upon a default by Purchaser under the Sixth Amendment (a "Forbearance Default") may be filed with the Circuit Court of the State of Oregon allowing assets of the Purchaser and the Company to be foreclosed upon to satisfy payment of the Existing Default. Subject to compliance by Purchaser with the terms and conditions of the Sixth Amendment, Sellers agreed to forbear from exercising their rights and remedies against Purchaser under the transaction documents with respect to the Existing Default during the period commencing on the date of execution of the Sixth Amendment by all parties and ending on the earlier to occur of (i) July 20, 2025 and (ii) the date that any Forbearance Default occurs, upon which, Sellers' forbearance, as provided herein, shall immediately and automatically cease without any requirement of notice or further action by any party (the "Termination Date"). On July 9, 2025 the Company entered into a Seventh Amended Forbearance Agreement which extended clause (i) of the Termination Date to August 30, 2025. On August 27, the Company entered into an Eighth Amended Forbearance Agreement which extended clause (i) of the Termination Date to September 30, 2025. On and from the Termination Date, Sellers may, in their sole discretion, exercise any and all remedies available to them under the transaction documents that otherwise would be available only by reason of the occurrence of any Events of Default thereunder or the continuation of any Existing Default. As of August 27, 2025, the balance of $2,227,366 owed to Seller is due and payable by September 30, 2025. We intend to use a portion of the proceeds of the private placement to cure the Existing Default.

As part of our restructuring initiatives, HTO Nevada, which was previously owned by HTO Holdings, was acquired by Functional Brands on May 19, 2023. This acquisition took place through a share exchange agreement involving HOC, HTO Holdings, and Functional Brands. This exchange resulted in HTO Nevada becoming a wholly-owned subsidiary of Functional Brands. Our fiscal year ends on December 31.

We were previously deemed a "controlled company" under NASDAQ corporate governance rules because HOC. owned a majority of our outstanding shares of common stock. HOC has distributed all of the shares it holds in our Company to HOC's shareholders and debtholders. Therefore, we are no longer a controlled company and will not be relying on any exemptions from corporate governance requirements provided to controlled companies.

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

Upon the completion of this offering, we will qualify as an "emerging growth company" under the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). As a result, we will be permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:

● Have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act");

● Comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);

● Submit certain executive compensation matters to shareholder advisory votes, such as "say-on-pay" and "say-on-frequency;" and

● Disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer's compensation to median employee compensation.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the "Securities Act") for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

We will remain an emerging growth company for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1.235 billion, (ii) the date that we become a "large accelerated filer" as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the "Exchange Act,") which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.

To the extent that we continue to qualify as a "smaller reporting company," as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, (the "Exchange Act"), after we cease to qualify as an emerging growth company, certain of the exemptions available to us as an emerging growth company may continue to be available to us as a smaller reporting company, including: (i) not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes Oxley Act; (ii) scaled executive compensation disclosures; and (iii) the requirement to provide only two years of audited financial statements, instead of three years.

**Corporate Information**

We are currently incorporated and in good standing in the State of Delaware. Our registered address is 6400 SW Rosewood Street, Lake Oswego, Oregon 97035 and our telephone number is (800)245-8282. We maintain the following websites: https://functionalbrandsinc.com, https://kirkmangroup.com and https://hemptownnaturals.com. Information available on our websites is not incorporated by reference in and is not deemed a part of this prospectus, and you should not consider any information contained on, or that can be accessed through, our website as part of this prospectus or in deciding whether to purchase our common stock.

**NASDAQ Listing**

We intend to list our common stock on NASDAQ. There is no assurance that our listing application will be approved by NASDAQ. If our application to NASDAQ 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 the offering.

**Reverse Stock Split**

Our board of directors approved the Reverse Stock Split. On January 22, 2025, we filed a certificate of amendment of certificate of incorporation with the State of Delaware to immediately effect the Reverse Stock Split. All share and per share information in this prospectus are presented after giving effect to the Reverse Stock Split retrospectively for all periods presented, unless otherwise stated or the context otherwise requires.

**SUMMARY FINANCIAL INFORMATION**

The following tables summarize certain financial data regarding our business and should be read in conjunction with our financial statements and related notes contained elsewhere in this prospectus and the information under "*Management's Discussion and Analysis of Financial Condition and Results of Operations*."

Our board of directors and our stockholders each approved the Reverse Stock Split. On January 22, 2025, we filed a certificate of amendment of certificate of incorporation with the State of Delaware to immediately effect the Reverse Stock Split. All share and per share information in this prospectus are presented after giving effect to the Reverse Stock Split retrospectively for all periods presented, unless otherwise stated or the context otherwise requires.

Our summary financial data as of December 31, 2024, and 2023, are derived from our audited financial statements included elsewhere in this prospectus. All financial statements included in this prospectus are prepared and presented in accordance with generally accepted accounting principles in the United States ("GAAP"). The summary financial information is only a summary and should be read in conjunction with the historical financial statements and related notes contained elsewhere herein. The financial statements contained elsewhere fully represent our financial condition and operations; however, they are not indicative of our future performance.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Six months ended** | **Six months ended** | **Years Ended** | **Years Ended** |
|  | **June 30, 2025**<br>**(Unaudited)** | **June 30, 2024**<br>**(Unaudited)** | **December 31,**<br>**2024** | **December 31,**<br>**2023** |
| **Statements of Operations Data** |  |  |  |  |
| Net Revenue | $3422789 | $3490446 | $6566455 | $6820499 |
| Cost of Goods Sold | (1587928) | (1636792) | (2959609) | (3641648) |
| Operating Expenses | (2022397) | (1728228) | (3835938) | (4261354) |
| Operating Income (Loss) | (187536) | 125426 | (229092) | (1082503) |
| Other Income / (Expenses), Net | (165302) | (118951) | (330264) | (158591) |
| Net Loss | $(352838) | $6475 | $(559356) | $(1241094) |

---

---

| | | | |
|:---|:---|:---|:---|
|  | | **Years Ended** | **Years Ended** |
|  | **Six months ended**<br>**June 30, 2025**<br>**(Unaudited)** | **December 31,**<br>**2024** | **December 31,**<br>**2023** |
| **Balance Sheet Data** |  |  |  |
| Cash | $257683 | $211642 | $374435 |
| Total Current Assets | 3556145 | 2858324 | 2543744 |
| Total Assets | 7670856 | 7169660 | 7254635 |
| Total Current Liabilities | 5375529 | 5202950 | 2251468 |
| Total Liabilities | 7413692 | 7288237 | 7228756 |
| Accumulated Deficit | (8013768) | (7660930) | (7101574) |
| Total Stockholder's Equity / (Deficit) | 257164 | (118577) | 25879 |
| Total Liabilities and Stockholders' Equity / (Deficit) | $7670856 | $7169660 | $7254635 |

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Dismissal of Previous Independent Registered Public Accounting Firm.

On February 14, 2024, BF Borgers CPA PC ("BF Borgers") notified Functional Brands Inc. (the "Company") that it was resigning as the independent registered public accounting firm for the Company. BF Borgers is not required to obtain and did not seek, the Company's consent to its decision to resign as the Company's independent registered public accounting firm. As a result, the board of directors of the Company (the "Board") did not take part in BF Borgers's decision to provide its notice of resignation.

During the Company's two most recent fiscal years ended December 31, 2023 and 2022, and the subsequent interim period through June 30, 2024, there were (i) no disagreements with BF Borgers on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements if not resolved to the satisfaction of BF Borgers would have caused them to make reference thereto in connection with their reports on the financial statements for such years and (ii) no reportable events (as defined in Item 304(a)(1)(v) of Regulation S-K).

BF Borgers's audit reports on the Company's consolidated financial statements for the fiscal years ended December 31, 2022 and 2021 did not contain any adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope, or accounting principles.

Appointment of New Independent Registered Public Accounting Firm.

On March 12, 2024, the Company engaged and executed an agreement with TAAD LLP, as the Company's new independent accountant for the fiscal years ended December 31, 2024, 2023 and 2022. The board of directors approved the decision to engage TAAD LLP.

During the Company's fiscal years ended December 31, 2024 and 2023, and the subsequent interim period through march 31, 2025, neither the Company nor anyone on its behalf consulted with TAAD LLP on either (a) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the consolidated financial statements of the Company and its subsidiaries, and no written report or oral advice was provided by TAAD LLP to the Company that TAAD LLP concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue, or (b) any matter that was the subject of either a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K) or a reportable event (as described in Item 304(a)(1)(v) of Regulation S-K).

**SUMMARY OF RISK FACTORS**

An investment in our common stock involves a high degree of risk. You should carefully consider the risks summarized below. These risks are discussed more fully in the "*Risk Factors*" section immediately following this Prospectus Summary. These risks include, but are not limited to, the following:

● Our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern.

● We may be unable to effectively manage future growth. We will need additional financing in the future, which may not be available when needed or may be costly and dilutive.

● If we are unable to continue as a going concern, our securities will have little or no value.

● We have a limited operating history, and we may not be able to successfully operate our business or execute our business plan.

● We may incur significant debt to finance our operations.

● We compete in an industry that is brand-conscious, so brand name recognition and acceptance of our products are critical to our success.

● Our brand and image are keys to our business and any inability to maintain a positive brand image could have a material adverse effect on our results of operations.

● Competition from traditional and large, well-financed product manufacturers or distributors may adversely affect our distribution relationships and may hinder the development of our existing markets, as well as prevent us from expanding our markets.

● We compete in an industry characterized by rapid changes in consumer preferences and public perception, so our ability to continue developing new products to satisfy our consumers' changing preferences will determine our long-term success.

● We may be unable to respond effectively to technological changes in our industry, which could reduce the demand for our products.

● We may experience a reduced demand for some of our products due to health concerns and legislative initiatives against smokables products.

● Legislative or regulatory changes that affect our products, including new taxes, could reduce demand for products or increase our costs.

● Some products we sell are subject to developing and unpredictable regulations. The Company may become subject to increasing regulation as a result of its hemp development activities, which could require it to incur additional costs associated with compliance requirements. Our ability to develop, commercialize and distribute hemp products and comply with laws and regulations governing cannabis, hemp or related products may affect our operational results.

● International expansion efforts would likely significantly increase our operational expenses.

● Our reliance on distributors, retailers and brokers could affect our ability to efficiently and profitably distribute and market our products, maintain our existing markets and expand our business into other geographic markets.

● We incur significant time and expense in attracting and maintaining key distributors, and loss of distributors or retails accounts would harm our business.

● We rely on suppliers, manufacturers and contractors, and events adversely affecting them would adversely affect us.

● We have a single customer that accounts for a substantial portion of our revenues, and our business would be harmed were we to lose this customer.

● Wholesale price volatility may adversely affect operations.

● We may sustain losses that cannot be recovered through insurance or other preventative measures.

● We may be subject to product liability claims and other claims of our customers and partners.

● If we encounter product recalls or other product quality issues, our business may suffer.

● It is difficult to predict the timing and amount of our sales, and as a result our sales forecasts are uncertain.

● If we do not adequately manage our inventory levels, our operating results could be adversely affected.

● Increases in costs or shortages of raw materials could harm our business and financial results.

● Increases in costs of energy and increased regulations may have an adverse impact on our gross margin.

● Disruption within our supply chain, contract manufacturing or distribution channels could have an adverse effect on our business, financial condition and results of operations.

● If we are unable to attract and retain key personnel, our efficiency and operations would be adversely affected; in addition, staff turnover causes uncertainties and could harm our business.

● If we lose the services of our Chief Executive Officer and/or Chief Financial Officer, our future operations could be impaired until such time as a qualified replacement can be found.

● If we fail to protect our trademarks and trade secrets, we may be unable to successfully market our products and compete effectively.

● Disruptions to our information technology systems due to cyber-attacks or our failure to upgrade and adjust our information technology systems, may materially impair our operations, hinder our growth and materially and adversely affect our business and results of operations.

● Our business is subject to many regulations and noncompliance is costly.

● Significant additional labeling or warning requirements may inhibit sales of affected products.

● Our industry may become subject to expanded regulation and increased enforcement by the Food and Drug Administration (FDA) and the Federal Trade Commission (FTC).

● Our business and operations would be adversely impacted in the event of a failure or interruption of our information technology infrastructure or as a result of a cybersecurity attack.

● Our results of operations may fluctuate from quarter to quarter for many reasons, including seasonality.

● Global economic, political, social and other conditions, including the COVID-19 pandemic, may continue to adversely impact our business and results of operations.

● We may not be able to satisfy listing requirements of NASDAQ or obtain or maintain a listing of our common stock on NASDAQ.

● Prior to this offering, we were majority-owned by HOC, and a small group of shareholders.

● The transition to a new presidential administration in the United States, including the potential use and effects of tariffs to address the administration's policy goals, could materially impact the macroeconomic framework in which we operate.

● Significant tariffs or other restrictions imposed on imports by the U.S. and related countermeasures taken by impacted countries could have a material adverse effect on our operations and financial results.

**Summary of Risks Related to Our Direct Listing and Volatility of Our Common Stock Following the Offering**

We cannot predict the prices at which our common stock may trade on Nasdaq following the listing of our common stock, and the market price of our common stock may fluctuate significantly in response to various factors, some of which are beyond our control. In particular, 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.

Our listing differs significantly from an initial public offering conducted on a firm commitment basis. There have been very few companies that have undertaken direct listings on a national securities exchange. Accordingly, there is insufficient historical data to predict what level of price and volume volatility may be incurred. Consequently, significant and swift negative price movement in our common stock is very possible. 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.

Finally, there can be no assurance that the Registered Stockholders and other existing stockholders will not sell all of their shares of common stock, resulting in an oversupply of our common stock on Nasdaq. In the case of a lack of supply of our common stock, the trading price of our common stock may rise to an unsustainable level. Further, institutional investors may be discouraged from purchasing our common stock if they are unable to purchase a block of our common stock in the open market due to a potential unwillingness of our existing stockholders to sell a sufficient amount of common stock at the price offered by such institutional investors and the greater influence individual investors have in setting the trading price. If institutional investors are unable to purchase our common stock, the market for our common stock may be more volatile without the influence of long-term institutional investors holding significant amounts of our common stock. In the case of a lack of market demand for our common stock, the trading price of our common stock could decline significantly and rapidly after our listing. Therefore, an active, liquid and orderly trading market for our common stock may not initially develop or be sustained, which could significantly depress the public price of our common stock and/or result in significant volatility, which could affect your ability to sell your shares of common stock.

**RISK FACTORS**

*Investing in our securities involves a high degree of risk. You should carefully consider the following risk factors, together with the other information contained in this prospectus, before purchasing our securities. We have listed below (not necessarily in order of importance or probability of occurrence) what we believe to be the most significant risk factors applicable to us, but they do not constitute all of the risks that may be applicable to us. Any of the following factors could harm our business, financial condition, results of operations or prospects, and could result in a partial or complete loss of your investment. Some statements in this prospectus, including statements in the following risk factors, constitute forward-looking statements. Please refer to the section titled "Cautionary Statement Regarding Forward-Looking Statements".*

 

*We may not be successful in preventing the material adverse effects that any of the following risks and uncertainties may cause. These potential risks and uncertainties may not be a complete list of the risks and uncertainties facing us. There may be additional risks and uncertainties that we are presently unaware of, or presently consider immaterial, that may become material in the future and have a material adverse effect on us. You could lose all or a significant portion of your investment due to any of these risks and uncertainties.*

**Risks Related to our Financial Condition and Capital Requirements**

***Our independent registered public accounting firm has expressed doubt about our ability to continue as a going concern.***

Our auditor's report on our 2024 audited financial statements expresses an opinion that doubt exists as to whether we can continue as an ongoing business. Our recurring losses, negative cash flows and accumulated deficit raise doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.

It is critical that we meet our sales goals and increase sales going forward as our operating plan already reflects prior significant cost containment measures and may make it difficult to achieve top-line growth if further significant reductions become necessary. If we do not meet our sales goals, our available cash and working capital will decrease and our financial condition and results of operation will be negatively impacted. These factors raise substantial doubt about our ability to continue as a going concern.

***We may be unable to effectively manage future growth.***

We may be subject to growth-related risks, including capacity constraints and pressure on our internal systems and controls. Our ability to manage growth effectively will require us to continue to implement and improve our operational and financial systems and to expand, train and manage our employee base. Rapid growth of our business may significantly strain our management, operations and technical resources. If we are successful in obtaining large orders for its products, we will be required to deliver large volumes of products to our customers on a timely basis and at a reasonable cost. We may not obtain large-scale orders for our products and if we do, we may not be able to satisfy large-scale production requirements on a timely and cost-effective basis. Our inability to deal with this growth may have a material adverse effect on our business, financial condition, results of operations and prospects.

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***We will need additional financing in the future, which may not be available when needed or may be costly and dilutive.***

We will require additional financing to support our working capital needs in the future. The amount of additional capital we may require, the timing of our capital needs and the availability of financing to fund those needs will depend on a number of factors, including our strategic initiatives and operating plans, the performance of our business and the market conditions for debt or equity financing. Additionally, the amount of capital required will depend on our ability to meet our sales goals and otherwise successfully execute our operating plan. We believe it is imperative that we meet these sales objectives in order to lessen our reliance on external financing in the future. We intend to continually monitor and adjust our operating plan as necessary to respond to developments in our business, our markets and the broader economy. Although we believe various debt and equity financing alternatives will be available to us to support our working capital needs, financing arrangements on acceptable terms may not be available to us when needed. Additionally, these alternatives may require significant cash payments for interest and other costs or could be highly dilutive to our existing shareholders. Any such financing alternatives may not provide us with sufficient funds to meet our long-term capital requirements. If necessary, we may explore strategic transactions that we consider to be in our best interest of our company and the best interest of our shareholders, which may include, without limitation, public or private offerings of debt or equity securities, a rights offering, and other strategic alternatives; however, these options may not ultimately be available or feasible when needed.

***Functional Brands Inc. has a limited operating history, and we may not be able to successfully operate our business or execute our business plan.***

We are a development stage company and are therefore subject to many of the risks common to early-stage enterprises, including under-capitalization, cash shortages, limitations with respect to personnel, financial, and other resources and lack of revenue. Given our limited operating history, it is hard to evaluate our proposed business and prospects. Our proposed business operations will be subject to numerous risks, uncertainties, expenses and difficulties associated with early- stage enterprises. There is no assurance that we will be successful in achieving a return on shareholders' investment, and the likelihood of success must be considered in light of the early stage of our hemp operations.

***We may incur significant debt to finance our operations.***

There is no assurance that we will not incur debt in the future, that we will have sufficient funds to repay our indebtedness, or that we will not default on our debt, jeopardizing our business viability. Furthermore, we may not be able to borrow or raise additional capital in the future to meet our needs or to otherwise provide the capital necessary to conduct our business.

***Existing events of default under the Asset Purchase Agreement could have a material adverse effect on our financial condition, results of operations and prospects.***

On June 28, 2019, HTO Holdings Inc. ("HTO Holdings") a wholly owned subsidiary of HOC and the owner of all issued and outstanding stock of HTO Nevada (as "Purchaser"), entered into an asset purchase agreement ("APA") for the net assets of Kirkman Group Inc. a Nevada corporation, Kirkman Laboratories Inc., an Oregon corporation and Kirkman Group International, Inc. a Nevada corporation (collectively "Kirkman" or the "Seller," and together with Purchaser, the "Parties") for a consideration equal to $5 million with payout in a business combination of cash and deferred consideration. The "Seller" is David Humphrey. Under the APA, Purchaser and HTO Holdings were to make certain additional payments toward the purchase price. The APA was amended on November 30, 2021 by the Parties, with the purpose of modifying the payment schedule of the deferred consideration; and in exchange for amending the payment schedule of the deferred consideration, the Purchaser and HTO Holdings agreed to enter into a security agreement, and amend the APA and other agreements attached to the APA (including, but not limited to, the non-competition agreement, the trademark assignment agreement, the domain names transfer agreement, the assignment of intangible assets, and the intellectual property security agreement (collectively, the "IP Collateral Agreements")) to, among other things, provide additional collateral as security to Seller. Upon payment in full in cash of the deferred consideration or set-off of the deferred consideration, as amended: (i) each of the Parties agreed that the security agreement and amended intellectual property security agreement would be automatically terminated and be of no further force and effect, and (ii) Seller would, at its sole cost and expense, release all liens in the IP Collateral, as defined in the respective security agreement and intellectual property security agreement, and all rights therein would forthwith revert to Purchaser. On May 16, 2022, the APA was amended again by the Parties, to reflect further modifications to the schedules and exhibits to the APA and IP Collateral Agreements. On May 31, 2022, Purchaser paid Seller certain amounts ("Immediate Payments"), and on July 23, 2022, Purchaser and Seller executed a forbearance agreement ("Forbearance Agreement") to extend the payments due under the APA to August 31, 2022. After Purchaser's default, and partial payment to Seller in September 2022, the Parties executed an amendment to the Forbearance Agreement on December 27, 2022, to extend certain payments due under the APA, at which time the remaining balance due was $3,032,000 . A Fourth Forbearance amendment was signed by Seller and Buyer dated September 24, 2024 where additional principal and interest payments began to accrue. On May 28, 2025 the Company executed a Sixth Amended Forbearance Agreement which extended forbearance on the exercise of available remedies against the Company to July 20 ,2025. On July 9, 2025 the Company executed a Seventh Amended Forbearance Agreement which extended the forbearance termination date to August 30, 2025. On August 27, 2025 the Company executed an Eighth Amended Forbearance Agreement which extended the forbearance termination date to September 30, 2025. As of August 27, 2025, the balance due to Seller is $2,227,366 (the "Existing Default"). We intend to use a portion of the proceeds of the private placement to cure the Existing Default.

**Risk Factors Relating to Our Business and Industry**

***We compete in an industry that is brand-conscious, so brand name recognition and acceptance of our products are critical to our success.***

Our business is substantially dependent upon awareness and market acceptance of our products and brands by our target market: trendy, young consumers looking for a distinctive product tonality and/or the perceived benefits of hemp, CBD and CBG in their smokables as compared to nicotine or tobacco-based smokables. In addition, our business depends on acceptance by our independent distributors and retailers of our brands that have the potential to provide incremental sales growth. If we are not successful in the growth of our brand and product offerings, we may not achieve and maintain satisfactory levels of acceptance by independent distributors and retail consumers. Any failure of our brands to maintain or increase acceptance or market penetration would likely have a material adverse effect on our revenues and financial results.

***Our brand and image are keys to our business and any inability to maintain a positive brand image could have a material adverse effect on our results of operations.***

Our success depends on our ability to maintain the brand image for our existing products and effectively build up a brand image for new products and brand extensions. We cannot predict whether our advertising, marketing and promotional programs will have the desired impact on our products' branding and on consumer preferences. In addition, negative public relations and product quality issues, including negative perceptions regarding the hemp industry, whether real or imagined, could tarnish our reputation and image of the affected brands and could cause consumers to choose other products. Our brand image can also be adversely affected by unfavorable reports, studies and articles, litigation, or regulatory or other governmental action, whether involving our products or those of our competitors.

***Competition from traditional and large, well-financed product manufacturers or distributors may adversely affect our distribution relationships and may hinder the development of our existing markets, as well as prevent us from expanding our markets.***

The hemp industry is highly competitive. We compete with other hemp companies, manufacturers and distributors, not only for consumer acceptance but also for shelf space in retail outlets and for marketing focus by our distributors, many of whom also distribute other brands. Our products compete with hemp derived products, many of which are marketed by companies with substantially greater financial resources than ours. Some of these competitors are placing severe pressure on independent distributors not to carry competitive hemp brands such as ours. We also compete with regional hemp derived producers and "private label" suppliers.

Our direct competitors in the hemp industry include large domestic and international traditional hemp companies and distributors as well as regional or niche companies. These national and international competitors have advantages such as lower production costs, larger marketing budgets, greater financial and other resources and more developed and extensive distribution networks than ours. We may not be able to increase our volumes or maintain our selling prices, whether in existing markets or as we enter new markets.

Increased competitor consolidations, market-place competition, particularly among branded hemp smokables products, and competitive product and pricing pressures could impact our earnings, market share and volume growth. If, due to such pressure or other competitive threats, we are unable to sufficiently maintain or develop our distribution channels, we may be unable to achieve our current revenue and financial targets. As a means of maintaining and expanding our distribution network, we intend to introduce additional brands. We may not be successful in doing this, or it may take us longer than anticipated to achieve market acceptance of these new products and brands, if at all. Other companies may be more successful in this regard over the long term. Competition, particularly from companies with greater financial and marketing resources than ours, could have a material adverse effect on our existing markets, as well as on our ability to expand the market for our products.

The supplements industry is highly competitive. We compete with other supplement companies, manufacturers, and distributors, not only for consumer acceptance, but also for shelf space in retail outlets and for marketing focus by our wholesalers and professional accounts. Our products are sold over the counter and do not require a doctor's prescription since they are not FDA approved. Our products compete with other nutraceutical products, many of which are marketed by companies with substantially greater financial resources than ours. Our direct competition in the supplement industry includes domestic and international traditional nutraceutical companies and distributors as well as regional or niche companies. These national and international competitors have advantages such as lower production costs, larger marketing budgets, greater financial and other resources and more developed and extensive distribution networks than ours. We may not be able to increase our volumes or maintain our selling prices, whether in existing markets or as we enter new markets.

***We compete in an industry characterized by rapid changes in consumer preferences and public perception, so our ability to continue developing new products to satisfy our consumers' changing preferences will determine our long-term success.***

Failure to introduce new brands, products or product extensions into the marketplace as current ones mature and to meet our consumers' changing preferences could prevent us from gaining market share and achieving long-term profitability. Product lifecycles can vary, and consumers' preferences and loyalties change over time. We may not succeed at innovating new products to introduce to our consumers. Customer preferences also are affected by factors other than taste, such as health and nutrition considerations, shifting consumer needs, changes in consumer lifestyles, increased consumer information and competitive product and pricing pressures. Sales of our products may be adversely affected by the negative publicity associated with these issues. If we do not adequately anticipate or adjust to respond to these and other changes in customer preferences, we may not be able to maintain and grow our brand image and our sales may be adversely affected.

***We may be unable to respond effectively to technological changes in our industry, which could reduce the demand for our products.***

Our future business success will depend upon our ability to maintain and enhance our product portfolio with respect to advances in technological improvements for certain products and market products that meet customer needs and market conditions in a cost-effective and timely manner. Maintaining and enhancing our product portfolio may require significant investments in licensing fees and royalties. We may not be successful in gaining access to new products that successfully compete or are able to anticipate customer needs and preferences, and our customers may not accept one or more of our products. If we fail to keep pace with evolving technological innovations or fail to modify our products and services in response to customers' needs or preferences, then our business, financial condition and results of operations could be adversely affected.

***We may experience a reduced demand for some of our products due to health concerns and legislative initiatives against smokables products.***

Consumers are concerned about health and wellness; public health officials and government officials are increasingly vocal about smoking, vaping, and their adverse consequences. There has been a trend among many public health advocates to pursue generalized reduction in consumption of smokables products, as well as increased public scrutiny, new taxes on smokables products, and additional governmental regulations concerning the marketing and labeling/packing of smokable products. Additional or revised regulatory requirements, whether labeling, tax or otherwise, could have a material adverse effect on our financial condition and results of operations. Further, increasing public concern with respect to smokables could reduce demand for our hemp smokables products.

***Legislative or regulatory changes that affect our products, including new taxes, could reduce demand for products or increase our costs.***

Taxes imposed on the sale of certain of our products by federal, state, and local governments in the United States, or other countries in which we operate could cause consumers to shift away from purchasing our hemp smokables products. These taxes could materially affect our business and financial results.

***Some products we sell are subject to developing and unpredictable regulations.***

Some of our products may be subject to uncertain and evolving federal, state and local regulations concerning hemp, CBD, CBG, Hemp Derived Delta 9 and other non-tobacco consumable products. Regulatory and related enforcement initiatives by authorities related to such products are unpredictable and impossible to anticipate. We anticipate that all levels of government that have not already done so, are likely to seek in some way to regulate these products, but the type, timing, and impact of such regulations remains uncertain. These regulations include, or could include, restrictions prohibiting certain form factors, such as smokable hemp products, or age restrictions. Accordingly, we cannot give any assurance that such actions will not have a material adverse effect on this emerging business and our strategy.

***Possible yet unanticipated changes in federal and state law could cause any of our current products containing hemp-derived CBD to be illegal, or could otherwise prohibit, limit or restrict any of our products containing CBD.***

We have certain products containing hemp-derived CBD, and we may develop and launch additional products containing hemp-derived CBD in the future. Until 2014, when 7 U.S. Code §5940 became federal law as part of the Agricultural Act of 2014 (the "*2014 Farm Ac*t"), products containing oils derived from hemp, notwithstanding a minimal or non-existing THC content, were classified as Schedule I illegal drugs. The 2014 Farm Act expired on September 30, 2018, and was thereafter replaced by the Agricultural Improvement Act of 2018 on December 20, 2018 (the "*2018 Farm Act*"), which amended various sections of the U.S. Code, thereby removing hemp, defined as cannabis with less than 0.3% THC, from Schedule 1 status under the Controlled Substances Act, and legalizing the cultivation and sale of industrial-hemp at the federal level, subject to compliance with certain federal requirements and state law, amongst other things. More specifically, industrial hemp is defined as "the plant Cannabis sativa L. and any part of such plant, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis." THC is the psychoactive component of plants in the cannabis family generally identified as marihuana or marijuana. There is no assurance that the 2018 Farm Act will not be repealed or amended such that our products containing hemp-derived CBD would once again be deemed illegal under federal law.

***The psychedelic therapy industry and market are relatively new and this industry and market may not continue to exist or grow as anticipated***

We operate our business in a relatively new industry and market. In addition to being subject to general business risks, we must continue to build brand awareness in this industry and market through significant investments in our strategy, our operational capacity, quality assurance and compliance with regulations. In addition, there is no assurance that the industry and market will continue to exist and grow as currently estimated or anticipated or function and evolve in the manner consistent with management's expectations and assumptions. Any event or circumstance that adversely affects the psychedelic therapy industry and market could have a material adverse effect on our business, financial conditions and results of operations. The psychedelic medicine market will face specific marketing challenges given the products' status as a controlled substance which resulted in past and current public perception that the products have negative health and lifestyle effects and have the potential to cause physical and social harm due to psychoactive and potentially addictive effects. Any marketing efforts by us would need to overcome this perception to build consumer confidence, brand recognition and goodwill.

***The expansion of the use of psychedelics in the medical industry may require new clinical research into effective medical therapies***

Research in United States and internationally regarding the medical benefits, viability, safety, efficacy, addictiveness, dosing and social acceptance of psychedelic and psychoactive products remains in early stages. There have been relatively few clinical trials on the benefits of such products. Although we believe that the articles, reports and studies support our beliefs regarding the medical benefits, viability, safety, efficacy, dosing and social acceptance of psychedelic and psychoactive products, future research and clinical trials may prove such statements to be incorrect, or could raise concerns regarding, and perceptions relating to, psychedelic and psychoactive products. Given these risks, uncertainties and assumptions, readers should not place undue reliance on such articles and reports. Future research studies and clinical trials may draw opposing conclusions to those stated in this prospectus or reach negative conclusions regarding the medical benefits, viability, safety, efficacy, dosing, social acceptance or other facts and perceptions related to psychoactive products, which could have a material adverse effect on the demand for some of our products with the potential to lead to a material adverse effect on the Company's business, financial condition and results of operations.

***The Company may become subject to increasing regulation as a result of its hemp development activities, which could require it to incur additional costs associated with compliance requirements.***

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The Company develops hemp products. Hemp is legally distinct from marijuana and recognized as an agricultural crop by the United States government. There are federal and state laws and regulations on hemp that address hemp production, monitoring, manufacturing, distribution, and laboratory testing to ensure that that the hemp has a THC concentration of not more than 0.3% on a dry weight basis. Federal laws and regulations may also address the transportation or shipment of hemp or hemp products. It is difficult to predict whether regulators, such as the USDA or the MDA, will alter the manner in which they interpret existing federal and state laws and regulations on hemp or institute new regulations, or otherwise modify regulations in a way that will render compliance more burdensome. As the Company continues to pursue hemp, it may become subject to increasing regulation particular to hemp, which could require the Company to incur additional costs associated with compliance requirements.

***Our ability to develop, commercialize and distribute hemp derived products and comply with laws and regulations governing cannabis, hemp or related products may affect our operational results.***

As of September 1, 2024, 42 states have USDA approved state hemp farming plans while in eight states the USDA issues producer licenses directly to farmers under USDA's hemp farming plan. These eight states include Hawaii, Mississippi, Missouri, New Hampshire, North Carolina, Utah, Vermont, Wisconsin. The 2018 Farm Bill was signed into law on December 20, 2018. The 2018 Farm Bill removed hemp from the U.S. Controlled Substances Act (the "CSA") and established a federal regulatory framework for hemp production in the United States. Among other provisions, the 2018 Farm Bill: (a) explicitly amends the CSA to exclude all parts of the cannabis plant (including its cannabinoids, derivatives, and extracts) containing a THC concentration of not more than 0.3% on a dry weight basis from the CSA's definition of "marihuana"; (b) permits the commercial production and sale of hemp; (c) precludes states, territories, and Indian tribes from prohibiting the interstate transport of lawfully-produced hemp through their borders; and (d) establishes the USDA as the primary federal agency regulating the cultivation of hemp in the United States, while allowing states, territories, and Indian tribes to obtain (or retain) primary regulatory authority over hemp activities within their borders after receiving approval of their proposed hemp production plan from the USDA. Any such plan submitted by a state, territory, or Indian tribe to the USDA must meet or exceed minimum federal standards and receive USDA approval. Any state, territory, or Indian tribe that does not submit a plan to the USDA, or whose plan is not approved by the USDA, will be regulated by the USDA; provided that, states retain the ability to prohibit hemp production within their borders.

Marijuana continues to be classified as a Schedule I substance under the CSA. As a result, any cannabinoids (including CBD) derived from marijuana, as opposed to hemp, or any products derived from hemp containing in excess of 0.3% THC on a dry-weight basis, remain Schedule I substances under U.S. federal law. Cannabinoids derived from hemp are indistinguishable from those derived from marijuana, and confusion surrounding the nature of our smokable products containing hemp or CBD, inconsistent interpretations of the definition of "hemp", inaccurate or incomplete testing, farming practices and law enforcement vigilance or lack of education could result in our products being intercepted by federal and state law enforcement as marijuana and could interrupt and/or have a material adverse impact on our business. We could be required to undertake processes that could delay shipments, impede sales or result in seizures, proper or improper, that would be costly to rectify or remove and which could have a material adverse effect on our business, prospects, results of operations or financial condition. If we make mistakes in processing or labeling, and THC in excess of 0.3% on a dry-weight basis is found in our products, we could be subject to enforcement and prosecution under local, state, and federal laws which would have a negative impact on our business and operations.

Under the 2018 Farm Bill, states have authority to adopt their own regulatory regimes, and as such, regulations will likely continue to vary on a state-by-state basis. States take varying approaches to regulating the production and sale of hemp and hemp-derived products under state food and drug laws. The variance in state law and that state laws governing hemp production are rapidly changing may increase the chance of unfavorable law enforcement interpretation of the legality of the Company's operations as they relate to the cultivation of hemp. Further, such variance in state laws that may frequently change increases our compliance costs and risk of error.

While some states explicitly authorize and regulate the production and sale of hemp products or otherwise provide legal protection for authorized individuals to engage in commercial hemp activities, other states maintain outdated drug laws that do not distinguish between marijuana, hemp and/or hemp-derived CBD, hemp-derived Delta 9 resulting in hemp being classified as a controlled substance under state law. In these states, sale of CBD and hemp-derived Delta 9, notwithstanding origin, is either restricted to state medical or adult-use marijuana program licensees or remains otherwise unlawful under state criminal laws. Variance in hemp regulation across jurisdictions is likely to persist. This patchwork of state laws may, for the foreseeable future, materially impact our business and financial condition, limit the accessibility of certain state markets, cause confusion amongst regulators, and increase legal and compliance costs.

There are no express protections in the United States under applicable federal or state law for possessing or processing hemp biomass derived from lawful hemp not exceeding 0.3% THC on a dry weight basis and intended for use in finished product, but that may temporarily exceed 0.3% THC during the interim processing stages. While it is a common occurrence for hemp biomass to have variance in THC content during interim processing stages after cultivation but prior to use in finished products, there is risk that state or federal regulators or law enforcement could take the position that such hemp biomass is a Schedule I controlled substance in violation of the CSA and similar state laws. Further, there is a risk that state regulators and/or law enforcement may interpret provisions of state law prohibiting unlawful marijuana activity to apply to in-process hemp at any facility where we manufacture our hemp smokables products so that such activity is considered unlawful under state law.

In the event that our operations are deemed to violate any laws or if we are deemed to be assisting others to violate a state or federal law, we could be subject to enforcement actions and penalties, and any resulting liability could cause us to modify or cease its operations.

Continued development of the industrial hemp and cannabis industries will be dependent upon new legislative authorization of industrial hemp and cannabis at the state level, and further amendment or supplementation of legislation at the federal level. Any number of events or occurrences could slow or halt progress all together in this space. While progress within the industrial hemp and cannabis industries is currently encouraging, growth is not assured. While there appears to be ample public support for favorable legislative action, numerous factors may impact or negatively affect the legislative process(es) within the various states where we have business interests. Any one of these factors could slow or halt use of industrial hemp and cannabis, which could negatively impact our business and financial results.

In addition, the general manufacture, labeling and distribution of our hemp smokables products is regulated by various federal, state, and local agencies. These governmental authorities may commence regulatory or legal proceedings, which could restrict the permissible scope of our product claims or the ability to sell products in the future.

The shifting compliance environment and the need to build and maintain robust systems to comply with different compliance in multiple jurisdictions increases the possibility that we may violate one or more of the requirements. If our operations are found to be in violation of any of such laws or any other governmental regulations that apply to our business, we may be subject to penalties, including, without limitation, civil and criminal penalties, damages, fines, the curtailment or restructuring of our operations, any of which could adversely affect the ability to operate our business and its financial results.

***International expansion efforts would likely significantly increase our operational expenses.***

We may in the future expand into other geographic areas, which could increase our operational, regulatory, compliance, reputational and foreign exchange rate risks. The failure of our operating infrastructure to support such expansion could result in operational failures and regulatory fines or sanctions. Future international expansion could require us to incur a number of up-front expenses, including those associated with obtaining regulatory approvals, as well as additional ongoing expenses, including those associated with infrastructure, staff and regulatory compliance. We may not be able to successfully identify suitable acquisition and expansion opportunities or integrate such operations successfully with our existing operations.

***Our reliance on distributors, retailers and brokers could affect our ability to efficiently and profitably distribute and market our products, maintain our existing markets and expand our business into other geographic markets.***

Our ability to maintain and expand our existing markets for our products, and to establish markets in new geographic distribution areas, is dependent on our ability to establish and maintain successful relationships with reliable distributors, retailers and brokers strategically positioned to serve those areas. Most of our distributors, retailers and brokers sell and distribute competing products, including smokables products, and our products may represent a small portion of their business. The success of our distribution network will depend on the performance of the distributors, retailers, and brokers in our network. There is a risk they may not adequately perform their functions within the network by, without limitation, failing to distribute to sufficient retailers or positioning our products in localities that may not be receptive to our product. Our ability to incentivize and motivate distributors to manage and sell our products is affected by competition from other hemp smokables companies who have greater resources than we do. To the extent that our distributors, retailers and brokers are distracted from selling our products or do not employ sufficient efforts in managing and selling our products, including re-stocking the retail shelves with our products, our sales and results of operations could be adversely affected. Furthermore, such third parties' financial position or market share may deteriorate, which could adversely affect our distribution, marketing and sales activities.

Our ability to maintain and expand our distribution network and attract additional distributors, retailers and brokers will depend on a number of factors, some of which are outside our control. Some of these factors include:

● the level of demand for our brands and products in a particular distribution area;

● our ability to price our products at levels competitive with those of competing products; and

● our ability to deliver products in the quantity and at the time ordered by distributors, retailers and brokers.

We may not be able to successfully manage all or any of these factors in any of our current or prospective geographic areas of distribution. Our inability to achieve success with regards to any of these factors in a geographic distribution area will have a material adverse effect on our relationships in that particular geographic area, thus limiting our ability to maintain or expand our market, which will likely adversely affect our revenues and financial results.

***We incur significant time and expense in attracting and maintaining key distributors, and a loss of distributors or retails accounts would harm our business.***

Our marketing and sales strategy depends in large part on the availability and performance of our independent distributors. We currently do not have, nor do we anticipate in the future that we will be able to establish, long-term contractual commitments from some of our distributors. We may not be able to maintain our current distribution relationships or establish and maintain successful relationships with distributors in new geographic distribution areas. Moreover, there is the additional possibility that we may have to incur additional expenditures to attract and maintain key distributors in one or more of our geographic distribution areas in order to profitably exploit our geographic markets.

We currently have approximately ten distributors who service numerous retail accounts. If we were to lose any of our distributors, or if they were to lose national, regional or larger retail accounts, our financial condition and results of operations could be adversely affected. While we continually seek to expand and upgrade our distributor network, we may not be able to maintain our distributor or retailer base. The loss of any of our distributors, or their significant retail accounts, could have adverse effects on our revenues, liquidity and financial results, could negatively impact our ability to retain our relationships with our other distributors and our ability to expand our market, and would place increased dependence on our other independent distributors and national accounts.

***Any pandemic, such as the COVID-19 pandemic, has and could continue to negatively affect various aspects of our business, make it more difficult for us to meet our obligations to our customers, and result in reduced demand for our products and services, which could have a material adverse effect on our business, financial condition, results of operations, or cash flows.***

In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, and it has since spread throughout other parts of the world, including the United States. Any outbreak of contagious diseases or other adverse public health developments could have a material adverse effect on our business operations. These impacts to our operations have included and could again in the future include disruptions or restrictions on the ability of our employees and customers to travel or our ability to pursue collaborations and other business transactions, travel to customers and/or promote our products at conferences or other live events, oversee the activities of our third-party manufacturers and suppliers. We may also be impacted by the temporary closure of the facilities of suppliers, manufacturers or customers.

In an effort to halt the outbreak of COVID-19, a number of countries, including the United States, placed significant restrictions on travel and many businesses announced extended closures. These travel restrictions and business closures adversely impacted our operations locally and worldwide, including our ability to manufacture, market, sell or distribute our products. Such restrictions and closure have caused or may cause temporary closures of the facilities of our suppliers, manufacturers or customers. A disruption in the operations of our employees, suppliers, customers, manufacturers or access to customers would likely impact our sales and operating results. In addition, a significant outbreak of contagious diseases in the human population could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could affect demand for our products and likely impact our operating results.

***We rely on suppliers, manufacturers and contractors, and events adversely affecting them would adversely affect us.***

We intend to maintain a full supply chain for the provision of our hemp-based smokables products. Due to the novel and variable regulatory landscape for hemp and CBD/CBG/Delta 9 production in the United States, our third-party hemp and hemp smokables suppliers, manufacturers and contractors may elect, at any time, to decline or withdraw services necessary for our operations. Loss of these suppliers, manufacturers and contractors, including for non-hemp-based ingredients in our hemp smokables products, may have a material adverse effect on our business, financial condition, results of operations and prospects.

In addition, any significant interruption, negative change in the availability or economics of the supply chain or increase in the prices for the ingredients in our products provided by any such third-party suppliers, manufacturers and contractors could materially impact our business, financial condition, results of operations and prospects. Any inability to secure required supplies or to do so on appropriate terms could have a materially adverse impact on our business, financial condition, results of operations and prospects.

***We have two customers that account for a substantial portion of our revenues, and our business would be harmed were we to lose these customers.***

We have a purchase agreement in place with our largest customer, iHerb, since June 28, 2011. This agreement provides us with a license to commercialize and re-sell Kirkman products with set minimum order requirements. Our customer iHerb accounts for approximately 27% of the Company's total revenue for the year ended December 31, 2024, and approximately 22% for the year ended December 31, 2023. If we lose this customer, the company will lose a significant portion of our total revenues*.*

 

We have a reseller agreement in place with our second largest customer, OceanSide Health since April 18, 2022. This agreement provides OceanSide the ability to sell our Kirkman branded products on the Amazon platform. Oceanside represents approximately 26% of the Company's total revenue for the year ended December 31, 2024, and approximately 19% for the year ended December 31, 2023. We do have the ability to convert this business to a traditional Amazon account through another partner, so the risk of lost business is minimal.

***Wholesale price volatility may adversely affect operations.***

The hemp smokables industry is margin-based with gross profits typically dependent on the excess of sales prices over costs. Consequently, profitability is sensitive to fluctuations in wholesale and retail prices caused by changes in supply (which itself depends on other factors such as weather, fuel, equipment and labor costs, shipping costs, economic situation and demand), taxes, government programs and policies for the hemp smokables and hemp industries (including price controls and wholesale price restrictions that may be imposed by government agencies responsible for the regulation of hemp and/or smokables products), and other market conditions, all of which are factors beyond our control. Our operating income will be sensitive to changes in the price of hemp and other product ingredients, and the overall condition of the hemp and smokables industries, as our profitability is directly related to the price of hemp and our other smokables ingredients. There is currently no established market price for hemp, and the price of hemp is affected by numerous factors beyond our control. Ingredient price volatility may have a material adverse effect on our business, financial condition, and results of operations.

***We may sustain losses that cannot be recovered through insurance or other preventative measures.***

There is no assurance that we will not incur uninsured liabilities and losses as a result of the conduct of its business. While we currently have some liability insurance coverage, but the policy does not provide a high level of coverage. We plan to continue to review our liability coverage in the light of our expanding operations in order to insure against potential major insurable liabilities. Should uninsured losses occur, shareholders could lose their invested capital.

***We may be subject to product liability claims and other claims of our customers and partners.***

The sale of hemp smokables products to consumers involves a certain level of risk of product liability claims and the associated adverse publicity. Because use of our hemp smokables products could cause injury to consumers if packaging or ingredients are defective, we are subject to a risk of claims for such injuries and damages. We could also be named as co-parties in product liability suits that are brought against manufacturing partners that produce our hemp smokables products, packaging for those products, or the ingredients in those products.

In addition, our customers and partners may bring suits against us alleging damages for the failure of our products to meet stated specifications or other requirements. Any such suit, even if not successful, could be costly, disrupt the attention of our management and damage our negotiations with distributors and/or customers. Any attempt by us to limit our product liability in our contracts may not be enforceable or may be subject to exceptions. While we do have product liability insurance, our amounts of coverage may be inadequate to cover all potential liability claims. Insurance coverage, particularly as it relates to products relating to the hemp industry, is expensive, and additional coverage may be difficult to obtain. Also, additional insurance coverage may not be available in the future on acceptable terms and may not be sufficient to cover potential claims. We cannot be sure that our contract manufacturers or manufacturing partners who produce our hemp smokables products, packaging and ingredients will have adequate insurance coverage themselves to cover against potential claims. If we experience a large insured loss, it may exceed any insurance coverage limits we have at that time, or our insurance carrier may decline to cover us or may raise our insurance rates to unacceptable levels, any of which could impair our financial position and potentially cause us to go out of business.

***If we encounter product recalls or other product quality issues, our business may suffer.***

Product quality issues, real or imagined, or allegations of product contamination, even when false or unfounded, could tarnish our image and could cause consumers to choose other products. In addition, because of changing government regulations or implementation thereof, or allegations of product contamination, we may be required from time to time to recall products entirely or from specific markets. Product recalls could affect our profitability and could negatively affect brand image.

***It is difficult to predict the timing and amount of our sales, and as a result our sales forecasts are uncertain.***

Many of our white label clients (clients who we manufacture product for, and which product is labeled with the clients' own branding and then sold by the clients) are required to place minimum orders with us, but we cannot accurately predict what our sales will be.

Our independent distributors and national accounts are not generally required to place minimum monthly orders for our products. In order to reduce their inventory costs, independent distributors typically order products from us on a "just in time" basis in quantities and at such times based on the demand for the products in a particular distribution area. Accordingly, we cannot accurately predict the timing or quantity of purchases by any of our independent distributors or whether any of our distributors will continue to purchase products from us in the same frequencies and volumes as they may have done in the past. Additionally, our larger distributors and regional partners may make orders that are larger than we have historically been required to fill. Shortages in inventory levels, supply of raw materials or other key supplies could also negatively affect us.

***If we do not adequately manage our inventory levels, our operating results could be adversely affected.***

We need to maintain adequate inventory levels to be able to deliver products to distributors on a timely basis. Our inventory supply depends on our ability to correctly estimate demand for our products. Our ability to estimate demand for our products is imprecise, particularly for new products, seasonal promotions and new markets. If we materially underestimate demand for our products or are unable to maintain sufficient inventory of raw materials, we might not be able to satisfy demand on a short-term basis. If we overestimate distributor or retailer demand for our products, we may end up with too much inventory, resulting in higher storage costs, increased trade spend and the risk of inventory spoilage. If we fail to manage our inventory to meet demand, we could damage our relationships with our distributors and retailers and could delay or lose sales opportunities, which would unfavorably impact our future sales and adversely affect our operating results. In addition, if the inventory of our products held by our distributors and retailers is too high, they will not place orders for additional products, which would also unfavorably impact our sales and adversely affect our operating results.

***Increases in costs or shortages of raw materials could harm our business and financial results.***

In addition to the primary ingredient, the hemp blend, we use other principal ingredients, which manufacturing costs are subject to fluctuation. Substantial increases in the prices of ingredients, raw materials and packaging materials, used to produce our products, to the extent that they cannot be recouped through increases in the prices of finished hemp smokables products, would increase our operating costs and could reduce our profitability. If the supply of these raw materials is impaired or if prices increase significantly, it could affect the affordability of our products and reduce sales.

If we or any contract manufacturers we may use are unable to secure sufficient ingredients or raw materials including hemp, the various paper products and filters, and other key supplies, we might not be able to satisfy demand for our hemp smokables products on a short-term basis. Moreover, in the past there have been industry-wide shortages of hemp, papers and other ingredients in our products, and these shortages could occur again from time to time in the future, which could interfere with and delay production of our products and could have a material adverse effect on our business and financial results.

In addition, suppliers could fail to provide ingredients or raw materials on a timely basis, or fail to meet our performance expectations, for a number of reasons, including, for example, disruption to the global supply chain as a result of the COVID-19 pandemic, which caused serious disruption to our business, increased our costs, decreased our operating efficiencies and had a material adverse effect on our business, results of operations and financial condition.

***Increases in costs of energy and increased regulations may have an adverse impact on our gross margin.***

Over the past few years, volatility in the global oil markets has resulted in high fuel prices, which many shipping companies have passed on to their customers by way of higher base pricing and increased fuel surcharges. If fuel prices increase, we expect to experience higher shipping rates and fuel surcharges, as well as energy surcharges on our raw materials. It is hard to predict what will happen in the fuel markets and beyond. Due to the price sensitivity of our products, we may not be able to pass such increases on to our customers.

***Disruption within our supply chain, contract manufacturing or distribution channels could have an adverse effect on our business, financial condition and results of operations.***

Our ability, through our suppliers, business partners, contract manufacturers, independent distributors and retailers, to make, move and sell products is critical to our success. Damage or disruption to our suppliers or to manufacturing or distribution capabilities due to weather, natural disaster, fire or explosion, terrorism, pandemics such as COVID-19, influenza, and other viruses, labor strikes or other reasons, could impair the manufacture, distribution and sale of our products. Many of these events are outside of our control. Failure to take adequate steps to protect against or mitigate the likelihood or potential impact of such events, or to effectively manage such events if they occur, could adversely affect our business, financial condition and results of operations.

***If we are unable to attract and retain key personnel, our efficiency and operations would be adversely affected; in addition, staff turnover causes uncertainties and could harm our business.***

Our success depends on our ability to attract and retain highly qualified employees in such areas as finance, sales, marketing and product development and distribution. We compete to hire new employees, and, in some cases, must train them and develop their skills and competencies. We may not be able to provide our employees with competitive salaries, and our operating results could be adversely affected by increased costs due to increased competition for employees, higher employee turnover or increased employee benefit costs.

***If we lose the services of our executive officers, our future operations could be impaired until such time as a qualified replacement can be found.***

Our business plan relies significantly on the continued services of Eric Gripentrog, our Chief Executive Officer and Tariq Rahim, our Chief Financial Officer. If we were to lose the services of Mr. Gripentrog and/or Mr. Rahim, our ability to obtain new business and new strategic partners, as well as our ability to manage our operations and finances, could be materially impaired.

***We are required to indemnify our directors and officers.***

Our Articles of Incorporation and Bylaws provide that we will indemnify our officers and directors to the maximum extent permitted by Delaware law, provided that the officer or director did not act in bad faith or breach his or her duty to us or our stockholders, or that it is more likely than not that it will ultimately be determined that the officer or director has met the standards of conduct which make it permissible for under Delaware law for us to indemnify the officer or director. If we were called upon to indemnify an officer or director, then the portion of its assets expended for such purpose would reduce the amount otherwise available for our business.

***If we fail to protect our trademarks and trade secrets, we may be unable to successfully market our products and compete effectively.***

We rely on a combination of trademark and trade secrecy laws, confidentiality procedures and contractual provisions to protect our intellectual property rights. Failure to protect our intellectual property could harm our brand and our reputation, and adversely affect our ability to compete effectively. Further, enforcing or defending our intellectual property rights, including our trademarks and trade secrets, could result in the expenditure of significant financial and managerial resources. We regard our intellectual property, particularly our trademarks and trade secrets, as crucial to our business and our success. However, the steps taken by us to protect these proprietary rights may not be adequate and may not prevent third parties from infringing or misappropriating our trademarks, trade secrets or similar proprietary rights. In addition, other parties may seek to assert infringement claims against us, and we may have to pursue litigation against other parties to assert our rights. Any such claim or litigation could be costly. In addition, any event that would jeopardize our proprietary rights or any claims of infringement by third parties could have a material adverse effect on our ability to market or sell our brands, profitably exploit our products or recoup our associated research and development costs.

***Disruptions to our information technology systems due to cyber-attacks or our failure to upgrade and adjust our information technology systems, may materially impair our operations, hinder our growth and materially and adversely affect our business and results of operations.***

We believe that appropriate information technology, or IT, infrastructure is important in order to support our daily operations and the growth of our business. If we experience difficulties in implementing new or upgraded information systems or experience significant system failures, or if we are unable to successfully modify our management information systems or respond to changes in our business needs, we may not be able to effectively manage our business, and we may fail to meet our reporting obligations. Additionally, if our current arrangements and plans are not operated as planned, we may not be able to effectively recover our information system in the event of a crisis, which may materially and adversely affect our business and results of operations.

In the current environment, there are numerous and evolving risks to cybersecurity and privacy, including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, employee malfeasance and human or technological error. High-profile security breaches at other companies and in government agencies have increased in recent years, and security industry experts and government officials have warned about the risks of hackers and cyber-attacks targeting businesses such as ours. Computer hackers and others routinely attempt to breach the security of technology products, services and systems, and to fraudulently induce employees, customers, or others to disclose information or unwittingly provide access to systems or data. We can provide no assurance that our current IT system or any updates or upgrades thereto and the current or future IT systems of our potential distributors use or may use in the future, are fully protected against third-party intrusions, viruses, hacker attacks, information or data theft or other similar threats. Legislative or regulatory action in these areas is also evolving, and we may be unable to adapt our IT systems or to manage the IT systems of third parties to accommodate these changes. We have experienced and expect to continue to experience actual or attempted cyber-attacks of our IT networks. Although none of these actual or attempted cyber-attacks has had a material adverse impact on our operations or financial condition, we cannot guarantee that any such incidents will not have such an impact in the future.

***Our business is subject to many regulations and noncompliance is costly.***

The production, marketing and sale of our hemp and nutraceutical products, including contents, labels, and containers, are subject to the rules and regulations of various federal, provincial, state and local health agencies. If a regulatory authority finds that a current or future product or production batch or "run" is not in compliance with any of these regulations, we may be fined, or production may be stopped, which would adversely affect our financial condition and results of operations. Similarly, any adverse publicity associated with any noncompliance may damage our reputation and our ability to successfully market our products. Furthermore, the rules and regulations are subject to change from time to time and while we closely monitor developments in this area, we cannot anticipate whether changes in these rules and regulations will impact our business adversely. Additional or revised regulatory requirements, whether labeling, environmental, tax or otherwise, could have a material adverse effect on our financial condition and results of operations.

***Significant additional labeling or warning requirements may inhibit sales of affected products.***

Various jurisdictions may seek to adopt significant additional product labeling or warning requirements relating to the chemical content or perceived adverse health consequences of our hemp products. These types of requirements, if they become applicable to one or more of our products under current or future environmental or health laws or regulations, may inhibit sales of such products.

***Our industry may become subject to expanded regulation and increased enforcement by the Food and Drug Administration ("FDA") and the Federal Trade Commission ("FTC").***

The FDA under the Federal Food, Drug, and Cosmetic Act regulates the formulation, manufacturing, packaging, labeling, and distribution of food, dietary supplements, drugs, cosmetics, medical devices, biologics, and tobacco products. Our products are subject to law and regulation by the FDA. Moreover, the regulatory status of our products is currently in a state of flux as the FDA attempts to determine the appropriate manner in which to regulate these products. Thus, the regulatory approach is still evolving, and we may be required to seek the FDA's approval to market our products. It is also possible that the FDA may simply issue a regulation setting forth the conditions in which such products may be marketed, or it may simply prohibit these products.

Given the growing cannabidiol (CBD) products market, the U.S. Food and Drug Administration has convened a high-level internal working group to explore potential regulatory pathways for CBD products. After careful review, the FDA has concluded that a new regulatory pathway for CBD is needed that balances individuals' desire for access to CBD products with the regulatory oversight needed to manage risks. The agency is prepared to work with Congress on this matter.<sup>6</sup> Once the FDA makes a decision in relation to hemp-based products, we will follow the rules the FDA adopts.

<sup>6</sup> www.FDA.gov.

Because the FDA's regulatory process is subject to change, we cannot predict the likely outcome. In addition, the FTC under the Federal Trade Commission Act ("FTC Act") requires that product advertising be truthful, substantiated and not misleading. We believe that our advertising meets these requirements. However, the FTC may bring a challenge at any time in evaluating our compliance with the FTC Act. In addition, most states where our products are legal provide their own regulatory guidelines and regulations in connection with cigarette or other smokable product sales. Any failure by us to remain current on state regulatory changes could negatively affect our ability to operate our business.

At the moment, our hemp manufactured dietary supplement products are produced in an FDA registered and cGMP facility strictly following SOPs to ensure consumer safety and consistency and reliability batch to batch. Our supplement product packaging, labeling, and marketing collateral make no disease claims that would run afoul of the Dietary Supplement Heath and Education Act (DSHEA). Additionally, we design our product packaging to appeal to adults, not children. By taking these actions, we are substantially reducing the risk of any FDA enforcement because these are two primary areas of FDA enforcement.

Quality Control reviews production at specified check points. Raw materials are tested for ID, potency, and contamination using ISO 17025 certified labs. Finished products are tested for strength, composition, and contamination using ISO 17025 certified labs. All products are produced in isolated rooms, with cleaning and ATP testing performed prior to use. Rooms are thoroughly cleaned after use, and retested before new products are introduced. All hemp products are tested to ensure < 0.3% THC. They are also tested for solvents, pesticides, and mycotoxins (where relevant). QC oversight occurs from incoming of the raw material and components, through the entire manufacturing, packaging, labeling, and boxing processes. All hemp derived raw materials and finished products are stored under lock and key. Only authorized persons are allowed access.

FDA regulates both finished dietary supplement products and dietary ingredients. FDA regulates dietary supplements under a different set of regulations than those covering "conventional" foods and drug products. Under the Dietary Supplement Health and Education Act of 1994 (DSHEA):

● Manufacturers and distributors of dietary supplements and dietary ingredients are prohibited from marketing products that are adulterated or misbranded. That means that these firms are responsible for evaluating the safety and labeling of their products before marketing to ensure that they meet all the requirements of the Federal Food, Drug, and Cosmetic Act as amended by DSHEA and FDA regulations.

● FDA has the authority to take action against any adulterated or misbranded dietary supplement product after it reaches the market.<sup>7</sup>

Our manufactured dietary supplement products are produced following SOPs, to ensure there is consistency and reliability batch to batch. Quality Control reviews production at specified check points. Raw materials are tested for ID, potency, and contamination using ISO 17025 certified labs. Finished products are tested for strength, composition, and contamination using ISO 17025 certified labs. All products are produced in isolated rooms, with cleaning and ATP testing performed prior to use. Rooms are thoroughly cleaned after use, and retested before new products are introduced. QC oversight occurs from incoming of the raw material and components, through the entire manufacturing, packaging, labeling, and boxing processes.

<sup>7</sup> www.fda.gov/food/dietary-supplements.

***Litigation or legal proceedings could expose us to significant liabilities and damage our reputation.***

We may become party to litigation claims and legal proceedings. Litigation involves significant risks, uncertainties and costs, including distraction of management attention away from our business operations. We evaluate litigation claims and legal proceedings to assess the likelihood of unfavorable outcomes and to estimate, if possible, the amount of potential losses. Based on these assessments and estimates, we establish reserves and disclose the relevant litigation claims or legal proceedings, as appropriate. These assessments and estimates are based on the information available to management at the time and involve a significant amount of management judgment. Actual outcomes or losses may differ materially from those envisioned by our current assessments and estimates. Our policies and procedures require strict compliance by our employees and agents with all U.S. and local laws and regulations applicable to our business operations, including those prohibiting improper payments to government officials. Nonetheless, our policies and procedures may not ensure full compliance by our employees and agents with all applicable legal requirements. Improper conduct by our employees or agents could damage our reputation or lead to litigation or legal proceedings that could result in civil or criminal penalties, including substantial monetary fines, as well as disgorgement of profits.

***Climate change may negatively affect our business.***

There is growing concern that a gradual increase in global average temperatures may cause an adverse change in weather patterns around the globe resulting in an increase in the frequency and severity of natural disasters. Changing weather patterns could have a negative impact on agricultural productivity, which may limit availability or increase the cost of certain key ingredients such as hemp, natural flavors and other ingredients used in our products. Also, increased frequency or duration of extreme weather conditions may disrupt the productivity of our facilities, the operation of our supply chain or impact demand for our products. In addition, the increasing concern over climate change may result in more regional, federal and global legal and regulatory requirements and could result in increased production, transportation and raw material costs. As a result, the effects of climate change could have a long-term adverse impact on our business and results of operations.

***Our business and operations would be adversely impacted in the event of a failure or interruption of our information technology infrastructure or as a result of a cybersecurity attack.***

The proper functioning of our own information technology (IT) infrastructure is critical to the efficient operation and management of our business. We may not have the necessary financial resources to update and maintain our IT infrastructure, and any failure or interruption of our IT system could adversely impact our operations. In addition, our IT is vulnerable to cyberattacks, computer viruses, worms and other malicious software programs, physical and electronic break-ins, sabotage and similar disruptions from unauthorized tampering with our computer systems. We believe that we have adopted appropriate measures to mitigate potential risks to our technology infrastructure and our operations from these IT-related and other potential disruptions. However, given the unpredictability of the timing, nature and scope of any such IT failures or disruptions, we could potentially be subject to downtimes, transactional errors, processing inefficiencies, operational delays, other detrimental impacts on our operations or ability to provide products to our customers, the compromising of confidential or personal information, destruction or corruption of data, security breaches, other manipulation or improper use of our systems and networks, financial losses from remedial actions, loss of business or potential liability, and/or damage to our reputation, any of which could have a material adverse effect on our cash flows, competitive position, financial condition or results of operations.

***Our results of operations may fluctuate from quarter to quarter for many reasons, including seasonality.***

Our sales may be seasonal, and we experience fluctuations in quarterly results as a result of many factors. We expect to generate a greater percentage of our revenues during the warm weather months of April through September. The timing of customer purchases will vary each year, and sales can be expected to shift from one quarter to another. As a result, management believes that period-to-period comparisons of results of operations are not necessarily meaningful and should not be relied upon as any indication of future performance period comparisons or results expected for the fiscal year.

In addition, our operating results may fluctuate due to a number of other factors including, but not limited to:

● Our ability to maintain, develop and expand distribution channels for current and new products, develop favorable arrangements with third party distributors of our products and minimize or reduce issues associated with engaging new distributors and retailers, including, but not limited to, transition costs and expenses and down time resulting from the initial deployment of our products in each new distributor's network;

● Unilateral decisions by distributors, grocery store chains, specialty chain stores, club stores, mass merchandisers and other customers to discontinue carrying all or any of our products that they are carrying at any time;

● Our ability to manage our resources to sufficiently support general operating activities, promotion allowances and slotting fees, promotion and selling activities, and capital expansion, and our ability to sustain profitability;

● Our ability to meet the competitive response by much larger, well-funded and established companies currently operating in the hemp smokables industry, as we introduce new competitive products, and our hemp smokables products; and

● Competitive products and pricing pressures and our ability to gain or maintain share of sales in the marketplace as a result of actions by competitors.

Due to these and other factors, our results of operations have fluctuated from period to period and may continue to do so in the future, which could cause our operating results in a particular quarter to fail to meet market expectations.

***Changes in our effective tax rate may impact our results of operations.***

We are subject to taxes in the U.S. and other jurisdictions. Tax rates in these jurisdictions may be subject to significant change due to economic and/or political conditions. A number of other factors may also impact our future effective tax rate including:

● the jurisdictions in which profits are determined to be earned and taxed;

● the resolution of issues arising from tax audits with various tax authorities;

● changes in valuation of our deferred tax assets and liabilities;

● increases in expenses not deductible for tax purposes, including write-offs of acquired intangibles and impairment of goodwill in connection with acquisitions;

● changes in availability of tax credits, tax holidays, and tax deductions;

● changes in share-based compensation; and

● changes in tax laws or the interpretation of such tax laws and changes in generally accepted accounting principles.

Although we believe our income tax liabilities are reasonably estimated and accounted for in accordance with applicable laws and principles, an adverse resolution by one or more taxing authorities could have a material impact on the results of our operations. Further, we may be unable to utilize our net operating losses in the event a change in control is determined to have occurred.

***Global economic, political, social and other conditions, may continue to adversely impact our business and results of operations.***

The hemp industry can be affected by macro-economic factors, including changes in national, regional, and local economic conditions, unemployment levels and consumer spending patterns, which together may impact the willingness of consumers to purchase our products as they adjust their discretionary spending. Adverse economic conditions may adversely affect the ability of our distributors to obtain the credit necessary to fund their working capital needs, which could negatively impact their ability or desire to continue to purchase products from us in the same frequencies and volumes as they have done in the past. If we experience similar adverse economic conditions in the future, sales of our products could be adversely affected, collectability of accounts receivable may be compromised, and we may face obsolescence issues with our inventory, any of which could have a material adverse impact on our operating results and financial condition.

***We are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability due to the ongoing military conflict between Russia and Ukraine and the continuing hostilities involving the State of Israel. Our business may be materially adversely affected by any negative impact on the global economy and capital markets resulting from such conflicts or any other geopolitical tensions.***

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U.S. and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the start of the military conflict between Russia and Ukraine. On February 24, 2022, a full-scale military invasion of Ukraine by Russian troops was reported. Although the length and impact of the ongoing military conflict is highly unpredictable, the conflict in Ukraine could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions. We are continuing to monitor the situation in Ukraine and globally and assessing its potential impact on our business.

Additionally, Russia's prior annexation of Crimea, recent recognition of two separatist republics in the Donetsk and Luhansk regions of Ukraine and subsequent military interventions in Ukraine have led to sanctions and other penalties being levied by the United States, European Union and other countries against Russia, Belarus, the Crimea Region of Ukraine, the so-called Donetsk People's Republic, and the so-called Luhansk People's Republic, including agreement to remove certain Russian financial institutions from the Society for Worldwide Interbank Financial Telecommunication ("SWIFT") payment system, expansive ban on imports and exports of products to and from Russia and ban on exportation of U.S denominated banknotes to Russia or persons located there. Additional potential sanctions and penalties have also been proposed and/or threatened. Russian military actions and the resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets, potentially making it more difficult for us to obtain additional funds and sell the shares we are offering. The extent and duration of the military action, sanctions and resulting market disruptions are impossible to predict, but could be substantial. Any such disruptions may also magnify the impact of other risks described in this prospectus.

Further, the continued hostilities between the State of Israel and Hamas and the potential for additional hostilities among Israel, Iran and the United States all contribute to geopolitical instability and economic uncertainty and may negatively affect the credit and capital markets.

***Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters could significantly affect our financial results.***

The United States generally accepted accounting principles and related pronouncements, implementation guidelines and interpretations with regard to a wide variety of matters that are relevant to our business, such as, but not limited to, stock-based compensation, inventory, revenue recognition, trade spend and promotions, and income taxes are highly complex and involve many subjective assumptions, estimates and judgments by our management. Changes to these rules or their interpretation or changes in underlying assumptions, estimates or judgments by our management could adversely affect our reported financial results.

***The transition to a new presidential administration in the United States, including the potential use and effects of tariffs to address the administration's policy goals, could materially impact the macroeconomic framework in which we operate.***

The transition to a new presidential administration in the United States could impact our business and operations, including the macroeconomic framework in which we operate. We are unable to precisely predict what actions the new administration will take. For example, the Trump administration has expressed various intentions to impose tariffs on certain goods or other countries to the United States, and has indicated that his administration will treat national security much differently than the current and previous presidential administrations. Since taking office in January 2025, the Trump administration has already issued numerous executive orders, and has utilized the threat of tariffs and has imposed specific tariffs on products imported to the United States by various countries, including Canada, in connection with the implementation of its domestic policies. Any trade wars, through the implementation of tariffs or otherwise, could materially and adversely affect us, directly and indirectly, including by adversely impacting the supply chains for our operations, and increasing the costs of services we provide and utilize. Moreover, the change in presidential administration, as well as a transition of control in the House of Representatives and United States Senate, creates regulatory uncertainty and it remains unclear as to what specifically the President would or would not do with respect to certain programs and initiatives.

For the fiscal year ended December 31, 2024, The Company incurred supplier costs of approximately $2.960 million. During that period the Company sourced approximately one third of its raw materials from the United States, approximately one third from the People's Republic of China and the remaining third from a variety of other global jurisdictions. The status of current trade negotiations with China and other nations is uncertain and, therefore, the tariff level on imports from China and such nations is extremely volatile and unpredictable.

As of September 3, 2025, the Company has not incurred increased costs or disruptions to our supply chain due to changes in tariff levels. The Company intends to offset increased costs attributable to tariffs, to the full extent reasonably practicable, by increasing prices or by instituting cost cutting measures such that Company margins are protected and maintained.

***Significant tariffs or other restrictions imposed on imports by the U.S. and related countermeasures taken by impacted countries could have a material adverse effect on our operations and financial results.***

If significant tariffs or other restrictions are imposed on imports by the U.S. and related countermeasures are taken by foreign countries, our business, including results of operations, cash flows and financial condition, may be adversely affected. In January 2025, during the initial days of U.S. President Trump's second term, the U.S. announced the imposition of additional substantial tariffs on imports from various countries, including China, Canada and Mexico, and the subject countries have imposed or indicated their intention to impose retaliatory counter measures .. These and other tariffs and countermeasures could increase the costs for our operations, disrupt global supply chains and create additional operational challenges. Additionally, ongoing trade tensions and uncertainty regarding future trade policies could negatively impact global economic conditions and consumer confidence, further affecting our business performance.

**Risks Related to This Offering and Ownership of Our Common Stock**

***The direct listing process differs from an initial public offering underwritten on a firm-commitment basis.***

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This is not an underwritten initial public offering of common stock. This listing of our common stock on Nasdaq differs from an 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. See also "Our shares of common stock have no prior 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."

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

● None of our Registered Stockholders (except our executive officers, directors and holders of 5% or more of our common stock (the " Lock-Up Parties") who entered into lock-ups in connection with the private placement) or other existing stockholders have entered into contractual lock-up agreements or other contractual restrictions on transfer. In a firm-commitment underwritten initial public offering, it is customary for an issuer's officers, directors, and many of its other stockholders to enter into a 180-day contractual lock-up arrangement with the underwriters to help promote orderly trading immediately after such initial public offering. Consequently, any of our stockholders, other than the Lock-Up Parties, may sell any or all of their common stock at any time (subject to any restrictions under applicable law), including immediately upon listing. If such sales were to occur in a significant volume in a short period of time following our listing, it may result in an oversupply of our common stock in the market, which could adversely impact the public price of our common stock.

● We will not conduct a traditional "roadshow" with underwriters prior to the opening of trading on Nasdaq. Instead, we intend to 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.

There have been very few companies that have undertaken direct listings on a national securities exchange. Accordingly, there is insufficient historical data to predict what level of price and volume volatility may be incurred. Consequently, significant and swift negative price movement in our common stock is very possible.

Further the price of our securities sold in the private placement transaction may bear little or no relation to the trading price of our common stock at or subsequent to the opening of trading on Nasdaq.

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

 ***The Company's retention of Joseph Gunnar & Co. LLC as its Advisor may create potential conflicts of interest.***

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The Company has engaged Joseph Gunnar & Co. LLC ("Gunnar") as its Advisor in connection with the Direct Listing. In such capacity, Gunnar may be called upon to assist in determining the Current Reference Price for the Company's common stock. In such case there is the potential for Gunnar to have a conflict of interest between its obligations to the Company and obligations owed to, or relationships that it may have developed with, the purchasers of the privately placed preferred stock for which Gunnar acted as placement agent.

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

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We expect our common stock to be listed and traded on Nasdaq. Prior to the listing on Nasdaq, there has not been a public market for any of our securities, and an active market for our common stock may not develop or be sustained after the listing, which could depress the market price of shares of our common stock and could affect the ability of our stockholders to sell our common stock. In the absence of an active public trading market, investors may not be able to liquidate their investments in our common stock. An inactive market may also impair our ability to raise capital by selling shares of our common stock, our ability to motivate our employees through equity incentive awards and our ability to acquire other companies, products or technologies by using shares of our common stock as consideration.

In addition, we cannot predict the prices at which our common stock may trade on Nasdaq following the listing of our common stock. The opening trading price of our common stock may be unrelated to historical sales prices of our common stock and the market price of our 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 on the basis of such accepted orders. The Current Reference Price is calculated each second and, during a 10-minute "Display Only" period, is disseminated, along with other indicative imbalance information, to market participants by Nasdaq on its NOII and BookViewer tools. Following the "Display Only" period, a "Pre-Launch" period begins, during which the Advisor, in its capacity as our financial advisor, must notify Nasdaq that our shares are "ready to trade." Once the Advisor has notified Nasdaq that our shares of common stock are ready to trade, Nasdaq will confirm the Current Reference Price for our shares of common stock, in accordance with Nasdaq rules. If the Advisor then approves proceeding at the Current Reference Price, the applicable orders that have been entered will be executed at such price and regular trading of shares of our common stock on Nasdaq will commence, subject to Nasdaq conducting validation checks in accordance with Nasdaq rules. The Advisor will determine when our shares of common stock are ready to trade and approve proceeding at the Current Reference Price primarily based on considerations of volume, timing and price. In particular, the Advisor will determine, based primarily on pre-opening buy and sell orders, when a reasonable amount of volume will cross on the opening trade such that sufficient price discovery has been made to open trading at the Current Reference Price. If the Advisor does not approve proceeding at the Current Reference Price (for example, due to the absence of adequate preopening buy and sell interest), the Advisor will request that Nasdaq delay the open until such a time that sufficient price discovery has been made to ensure a reasonable amount of volume crosses on the opening trade. For more information, see "*Plan of Distribution*."

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

Furthermore, because of our novel listing process on Nasdaq, 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. In addition, demand for our common stock may be adversely affected by any actual or perceived damage to our public reputation or brand recognition. As a consequence, significant and swift declines in the price of our common stock are possible.

A direct listing, such as our Direct Listing, complicates the ability for a plaintiff to make a claim under Section 11 of the Securities Act. In order to bring such a claim a plaintiff must be able to trace their purchased shares to a specific registration statement that allegedly contains false or misleading information. In a firm commitment underwritten initial public offering it is fairly straightforward to tie shares to a specific registration statement. With a direct listing, and in light of today's vast electronic and fungible markets, it can be very difficult for a plaintiff to practically trace their specific shares to a particular registration statement. Notwithstanding this level of difficulty, in 2023 the Supreme Court affirmed the traceability requirement for all Section 11 claims. In a subsequent decision, the Ninth Circuit Court of Appeals also extended the traceability requirement to claims under Section 12(a)(2) of the Securities Act for an allegedly untrue statement of a material fact or omission of a material fact in a registration statement.

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:

● changes in the industries in which we operate;

● variations in our operating performance and the performance of our competitors in general;

● actual or anticipated fluctuations in our quarterly or annual operating results;

● publication of research reports by securities analysts about us or our competitors or our industry;

● the public's reaction to our press releases, our other public announcements and our filings with the SEC;

● our failure or the failure of our competitors to meet analysts' projections or guidance that we or our competitors may give to the market;

● additions and departures of key personnel;

● changes in laws and regulations affecting our business;

● commencement of, or involvement in, litigation involving us;

● changes in our capital structure, such as future issuances of securities or the incurrence of additional debt;

● the volume of shares of our common stock available for public sale; and

● general economic and political conditions such as recessions, interest rates, fuel prices, foreign currency fluctuations, international tariffs, social, political and economic risks and acts of war or terrorism.

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

***We may not be able to satisfy listing requirements of NASDAQ or obtain or maintain a listing of our common stock on NASDAQ.***

If our common stock is listed on NASDAQ, we must meet certain financial and liquidity criteria to maintain such listing. If we violate NASDAQ's listing requirements, or if we fail to meet any of NASDAQ's listing standards, our common stock may be delisted. In addition, our board of directors may determine that the cost of maintaining our listing on a national securities exchange outweighs the benefits of such listing. A delisting of our common stock from NASDAQ may materially impair our shareholders' ability to buy and sell our common stock and could have an adverse effect on the market price of, and the efficiency of the trading market for, our common stock. The delisting of our common stock could significantly impair our ability to raise capital and the value of your investment.

***Listing our common stock on a securities exchange will increase our regulatory burden.***

We intend to apply for the listing of our common stock under the symbol "MEHA" on the NASDAQ. There is no guarantee that our application will be approved in connection with this offering. Although to date we have not been subject to the continuous and timely disclosure requirements of exchange rules, regulations and policies of NASDAQ, we are working with our legal, accounting and financial advisors to identify those areas in which changes should be made to our financial management control systems to manage our obligations as a public company listed on NASDAQ. These areas include corporate governance, corporate controls, disclosure controls and procedures and financial reporting and accounting systems. We have made, and will continue to make, changes in these and other areas, including our internal controls over financial reporting. However, we cannot assure holders of our shares that these and other measures that we might take will be sufficient to allow us to satisfy our obligations as a public company listed on NASDAQ on a timely basis and that we will be able to achieve and maintain compliance with applicable listing requirements. In addition, compliance with reporting and other requirements applicable to public companies listed on NASDAQ will create additional costs for us and will require the time and attention of management. We cannot predict the amount of the additional costs that we might incur, the timing of such costs or the effects that management's attention to these matters will have on our business.

***The market price of our common stock may fluctuate, and you could lose all or part of your investment.***

After this offering, the market price for our common stock is likely to be volatile, in part because our shares have not been traded publicly and in part as a result of the Direct listing as opposed to an underwritten initial public offering. In addition, the market price of our common stock may fluctuate significantly in response to several factors, most of which we cannot control, including:

● actual or anticipated variations in our periodic operating results;

● increases in market interest rates that lead investors of our common stock to demand a higher investment return;

● changes in earnings estimates;

● changes in market valuations of similar companies;

● actions or announcements by our competitors;

● adverse market reaction to any increased indebtedness we may incur in the future;

● additions or departures of key personnel;

● actions by shareholders;

● speculation in the media, online forums, or investment community; and

● our intentions and ability to list our common stock on NASDAQ and our subsequent ability to maintain such listing.

Volatility in the market price of our common stock may prevent investors from being able to sell their common stock at or above the initial public offering price. As a result, you may suffer a loss on your investment.

***Future sales of common stock by our Registered Stockholders and other existing stockholders could cause our share price to decline.***

We currently expect our common stock to be listed and traded on Nasdaq. Prior to listing on Nasdaq, there has been no public market for our common stock and there has not been a sustained history of trading in our common stock in "over-the-counter" markets. While our common stock may be sold after our listing on Nasdaq by the Registered Stockholders pursuant to this prospectus or by our other existing stockholders in accordance with Rule 144 under the Securities Act, unlike a firm-commitment underwritten initial public offering, there can be no assurance that any Registered Stockholders or other existing stockholders will sell any of their shares of common stock and there may initially be a lack of supply of, or demand for, common stock on Nasdaq. As described herein, certain shares of our common stock outstanding as of the date hereof will be registered under this registration statement. There can be no assurance that the Registered Stockholders and other existing stockholders will not sell all of their shares of common stock, resulting in an oversupply of our common stock on Nasdaq. In the case of a lack of supply of our common stock, the trading price of our common stock may rise to an unsustainable level. Further, institutional investors may be discouraged from purchasing our common stock if they are unable to purchase a block of our common stock in the open market due to a potential unwillingness of our existing stockholders to sell a sufficient amount of common stock at the price offered by such institutional investors and the greater influence individual investors have in setting the trading price. If institutional investors are unable to purchase our common stock, the market for our common stock may be more volatile without the influence of long-term institutional investors holding significant amounts of our common stock. In the case of a lack of market demand for our common stock, the trading price of our common stock could decline significantly and rapidly after our listing. Therefore, an active, liquid and orderly trading market for our common stock may not initially develop or be sustained, which could significantly depress the public price of our common stock and/or result in significant volatility, which could affect your ability to sell your shares of common stock.

***You may be diluted by future issuances of preferred stock or additional common stock in connection with our incentive plans, acquisitions or otherwise; future sales of such shares in the public market, or the expectations that such sales may occur, could lower our stock price.***

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Prior to the effectiveness of the registration statement of which this prospectus forms a part, we may adopt an amended and restated certificate of incorporation which will authorize us to issue shares of common stock and options, rights, warrants and appreciation rights relating to our common stock for the consideration and on the terms and conditions established by our board of directors in its sole discretion. We could issue a significant number of shares of common stock in the future in connection with investments or acquisitions. Any of these issuances could dilute our existing stockholders, and such dilution could be significant. Moreover, such dilution could have a material adverse effect on the market price for the shares of our common stock.

The future issuance of shares of preferred stock with voting rights may adversely affect the voting power of the holders of shares of our common stock, either by diluting the voting power of our common stock if the preferred stock votes together with the common stock as a single class, or by giving the holders of any such preferred stock the right to block an action on which they have a separate class vote, even if the action were approved by the holders of our shares of our common stock.

The future issuance of shares of preferred stock with dividend or conversion rights, liquidation preferences or other economic terms favorable to the holders of preferred stock could adversely affect the market price for our common stock by making an investment in the common stock less attractive. For example, investors in the common stock may not wish to purchase common stock at a price above the conversion price of a series of convertible preferred stock because the holders of the preferred stock would effectively be entitled to purchase common stock at the lower conversion price, causing economic dilution to the holders of common stock.

***Because we have no current plans to pay cash dividends on our common stock, you may not receive any return on investment unless you sell your common stock for a price greater than that which you paid for it.***

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We currently intend to retain all available funds and any future earnings to fund the development, commercialization and growth of our business, and therefore we do not anticipate declaring or paying any cash dividends on our common stock in the foreseeable future. Any future determination to declare dividends will be made at the discretion of our board of directors and will depend on our financial condition, operating results, capital requirements, general business conditions and other factors that our board of directors may deem relevant. Our future ability to pay cash dividends on our common stock may also be limited by the terms of any future debt securities or credit facility*.*** As a result, capital appreciation, if any, of the common stock you purchase in this offering will be your sole source of gain for the foreseeable future.

***We are an emerging growth company and a smaller reporting company, and the reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies may make our common stock less attractive to investors.***

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We are an "emerging growth company," as defined in the JOBS Act. For as long as we continue to be an emerging growth company, we may take advantage of certain exemptions and relief from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including (i) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, (ii) having the option of delaying the adoption of certain new or revised financial accounting standards, (iii) reduced disclosure obligations regarding executive compensation in this prospectus and our periodic reports and proxy statements and (iv) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We may take advantage of these exemptions until such time that we are no longer an emerging growth company. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock. Further, pursuant to Section 107 of the JOBS Act, we have elected to take advantage of the extended transition period for complying with new or revised accounting standards until those standards would otherwise apply to private companies. 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 will remain an emerging growth company until the earliest of (i) December 31, 2028, (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion, (iii) the last day of the fiscal year in which we are deemed to be a "large accelerated filer" as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock held by non-affiliates was $700.0 million or more as of the last business day of the second fiscal quarter of such year or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

We are also a "smaller reporting company" as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies until the fiscal year following the determination that our voting and non-voting common stock held by non-affiliates is $250 million or more measured on the last business day of our second fiscal quarter, or our annual revenues are less than $100 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is $700 million or more measured on the last business day of our second fiscal quarter.

It is possible that some investors will find our common stock less attractive as a result of the foregoing, which may result in a less active trading market for our common stock and higher volatility in our stock price.

***We will not receive any proceeds of this offering.***

Any proceeds derived from the sale of shares of our common stock pursuant to this offering shall solely be for the account of the respective selling Registered Stockholder. The Company will receive no proceeds from sale of any shares covered by this prospectus.

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***We do not intend to pay any cash dividends on our shares of common stock in the near future, so our shareholders will not be able to receive a return on their shares unless they sell their shares.***

We intend to retain any future earnings to finance the development and expansion of our business. We do not anticipate paying any cash dividends on our common stock in the foreseeable future. There is no assurance that future dividends will ever be paid, and if dividends are paid, there is no assurance with respect to the amount of any such dividend. Unless we pay dividends, our shareholders will not be able to receive a return on their shares unless they sell their shares, and they may be unable to sell their shares on favorable terms or at all.

***If securities industry analysts do not publish research reports on us, or publish unfavorable reports on us, then the market price and market trading volume of our common stock could be negatively affected.***

Any trading market for our common stock may be influenced in part by any research reports that securities industry analysts publish about us. We do not currently have and may never obtain research coverage by securities industry analysts. If no securities industry analysts commence coverage of us, the market price and market trading volume of our common stock could be negatively affected. In the event we are covered by analysts, and one or more of such analysts downgrade our securities, or otherwise reports on us unfavorably, or discontinues coverage of us, the market price and market trading volume of our common stock could be negatively affected.

***Future issuances of our common stock or securities convertible into, or exercisable or exchangeable for, our common stock, or the expiration of lock-up agreements that restrict the issuance of new common stock or the trading of outstanding common stock, could cause the market price of our common stock to decline and would result in the dilution of your holdings.***

Future issuances of our common stock or securities convertible into, or exercisable or exchangeable for, our common stock, or the expiration of lock-up agreements that restrict the issuance of new common stock or the trading of outstanding common stock, could cause the market price of our common stock to decline. We cannot predict the effect, if any, of future issuances of our securities, or the future expirations of lock-up agreements, on the price of our common stock. In all events, future issuances of our common stock would result in the dilution of your holdings. In addition, the perception that new issuances of our securities could occur, or the perception that locked-up parties will sell their securities when the lockups expire, could adversely affect the market price of our common stock.

***Future issuances of debt securities, which would rank senior to our common stock upon our bankruptcy or liquidation, and future issuances of preferred stock, which could rank senior to our common stock for the purposes of dividends and liquidating distributions, may adversely affect the level of return you may be able to achieve from an investment in our common stock.***

In the future, we may attempt to increase our capital resources by offering debt securities. Upon bankruptcy or liquidation, holders of our debt securities, and lenders with respect to other borrowings we may make, would receive distributions of our available assets prior to any distributions being made to holders of our common stock. Moreover, if we issue preferred stock, the holders of such preferred stock could be entitled to preferences over holders of common stock in respect of the payment of dividends and the payment of liquidating distributions. Because our decision to issue debt or preferred stock in any future offering, or borrow money from lenders, will depend in part on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of any such future offerings or borrowings. Holders of our common stock must bear the risk that any future offerings we conduct or borrowings we make may adversely affect the level of return, if any, they may be able to achieve from an investment in our common stock.

***We are authorized to issue "blank check" preferred stock without stockholder approval, which could adversely impact the rights of holders of our common stock.***

Our articles of incorporation authorize us to issue shares of "blank check" preferred stock, meaning our board of directors can designate the rights and preferences of classes or series of such preferred stock without shareholder approval. Any preferred stock that we issue in the future may rank ahead of our common stock in terms of dividend priority or liquidation premiums and may have greater voting rights than our common stock. In addition, such preferred stock may contain provisions allowing those shares to be converted into shares of common stock, which could dilute the value of common stock to current stockholders and could adversely affect the market price, if any, of our common stock. In addition, the preferred stock could be utilized, under certain circumstances, as a method of discouraging, delaying or preventing a change in control of our company. Although we have no present intention to issue any shares of authorized preferred stock, there can be no assurance that we will not do so in the future.

***If our shares of common stock become subject to the penny stock rules, it would become more difficult to trade our shares.***

The Securities and Exchange Commission, or the SEC, has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or authorized for quotation on certain automated quotation systems, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. If we do not retain a listing on NASDAQ or another national securities exchange and if the price of our common stock is less than $5.00, our common stock could be deemed a penny stock. The penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document containing specified information. In addition, the penny stock rules require that before effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive (i) the purchaser's written acknowledgment of the receipt of a risk disclosure statement; (ii) a written agreement to transactions involving penny stocks; and (iii) a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock, and therefore shareholders may have difficulty selling their shares.

***We will be subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not emerging growth companies and our shareholders could receive less information than they might expect to receive from more mature public companies.***

As a company with less than $1.235 billion in revenue during our last fiscal year, we qualify as an "emerging growth company" as defined in Section 2(a) of the Securities Act of 1933, as amended (the "Securities Act"). An emerging growth company may take advantage of reduced disclosure and reporting requirements that are otherwise applicable to public companies. These provisions include, but are not limited to:

● being permitted to present only two years of audited financial statements and only two years of related "Management's Discussion and Analysis of Financial Condition and Results of Operations" disclosure in our periodic reports and registration statements, including this prospectus;

● not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act") on the effectiveness of our internal controls over financial reporting;

● reduced disclosure obligations regarding executive compensation arrangements in our periodic reports, proxy statements and registration statements, including this prospectus; and

● exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

We will remain an emerging growth company until the earliest to occur of: (i) the last day of the fiscal year in which we have more than $1.235 billion in annual revenue; (ii) the date we qualify as a "large accelerated filer," with at least $700 million of equity securities held by non-affiliates; (iii) the date on which we have issued, in any three-year period, more than $1.0 billion in non-convertible debt securities; and (iv) the last day of the fiscal year ending after the fifth anniversary of the completion of this offering.

We have taken advantage of the reduced disclosure obligations in the registration statement of which this prospectus is a part and intend to elect to take advantage of other reduced disclosure and reporting requirements in future filings. As a result, the information that we provide to our stockholders may be different than you might receive from other public reporting companies in which you hold equity interests.

We are also a "smaller reporting company," meaning that the market value of our stock held by non-affiliates plus the proposed aggregate amount of gross proceeds to us as a result of this offering is less than $700 million and our annual revenue is less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company after this offering if either (i) the market value of our stock held by non-affiliates is less than $250 million 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. If we are a smaller reporting company when 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. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Reports on Form 10-K and, like emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

**CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS**

This prospectus contains forward-looking statements that are based on our management's beliefs, expectations, and assumptions and on information currently available to us. All statements other than statements of historical facts are forward-looking statements. The forward-looking statements are contained principally in, but not limited to, the sections entitled "*Prospectus Summary*," "*Risk Factors*," "*Management's Discussion and Analysis of Financial Condition and Results of Operations*" and "*Business*." These statements relate to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements include, but are not limited to, statements about:

● our goal and strategies;

● our future business development, financial condition and results of operations;

● expected changes in our revenue, costs or expenditures;

● growth of and competition trends in our industry;

● our expectations regarding demand for, and market acceptance of, our products;

● our expectations regarding our relationships with investors, institutional funding partners and other parties with whom we collaborate;

● our expectation regarding the use of proceeds from this offering;

● fluctuations in general economic and business conditions in the markets in which we operate; and

● relevant government policies and regulations relating to our industry.

In some cases, you can identify forward-looking statements by terms such as "may," "could," "will," "should," "would," "expect," "plan," "intend," "anticipate," "believe," "estimate," "predict," "potential," "project" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under the heading "*Risk Factors*" and elsewhere in this prospectus. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance.

The forward-looking statements made in this prospectus relate only to events or information as of the date on which the statements are made in this prospectus. Although we will become a public company after this offering and have ongoing disclosure obligations under United States federal securities laws, except as required by applicable law, we do not intend to update or otherwise revise the forward-looking statements in this prospectus, whether as a result of new information, future events or otherwise.

**USE OF PROCEEDS**

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

**DIVIDEND POLICY**

We have never declared or paid cash dividends on our common stock. We currently intend to retain all available funds and any future earnings for use in the operation of our business and do not anticipate paying any cash dividends on our common stock in the near future. We may also enter into credit agreements or other borrowing arrangements in the future that will restrict our ability to declare or pay cash dividends on our common stock. Any future determination to declare dividends will be made at the discretion of our board of directors and will depend on our financial condition, operating results, capital requirements, contractual restrictions, general business conditions and other factors that our board of directors may deem relevant. See also "*Risk Factors—Risks Related to This Offering and Ownership of Our Common Stock—We do not intend to pay any cash dividends on our shares of common stock in the near future, so our shareholders will not be able to receive a return on their shares unless they sell their shares*."

**CAPITALIZATION**

The following table sets forth our capitalization as of June 30, 2025 (after giving effect to the Reverse Stock Split retroactively for all periods presented):

This table should be read in conjunction with, and is qualified in its entirety by reference to, our financial statements and related notes appearing elsewhere in this prospectus.

---

| | | | |
|:---|:---|:---|:---|
|  |<br> **Actual as of**<br> **June 30,**<br> **2025** |<br> **Post**<br> **Offering**<br> **June 30,**<br> **2025(1)** | **Post-Offering**<br> **Pro Forma<br> Assuming**<br> **Conversion**<br> **June 30,**<br> **2025(2)** |
| **Cash and cash equivalents** | $257683 | $6889789 | $6889789 |
| **Long-term debt** | $2038163 | $2038163 | $2038163 |
| **Total long-term debt** | $2038163 | $2038163 | $2038163 |
| **Stockholders' equity:** |  |  |  |
| Preferred Stock Series A $0.001 par value |  | 10 |  |
| Preferred Stock Series B $0.001 par value |  | 8 |  |
|  Common stock, $0.00001 par value, 220,000,000 shares authorized; authorized and 7,027,255 shares issued and outstanding, actual | 70 | 70 | 93 |
| Additional paid-in capital | 8270862 | 14902950 | 14902946 |
| Accumulated deficit | (8013768) | (8013768) | (8013768) |
| Total stockholders' equity (deficit) | $257164 | $6889270 | $6889270 |

---

(1) Assumes private
 placement transaction for the sale of our Series A Convertible Preferred Stock, together
 with a bonus Series B Convertible Preferred Stock, with a stated value of $18,000,000 for
 net proceeds of $6,464,106.

(2) Assumed conversion
 of $10,000,000 of Series A Preferred Stock and $8,000,000 of Series B preferred stock at
 $8 per share in 2,250,000 shares of common stock

As of June 30, 2025, current assets increased to $3,556,145 from $2,858,324 as of December 31, 2024. This increase was primarily due to an increase of the deferred offering costs incurred as part of preparation of this Registration Statement and an increase of Cash and Accounts Receivable. As of June 30, 2025, current liabilities increased to $5,375,529 from $5,202,950 as of December 31, 2024, primarily due to loan agreements executed between the company and a third party during the period.

At June 30, 2025, the Company had cash funds of $257,683.

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

*The following discussion and analysis summarize the significant factors affecting our operating results, financial condition, liquidity and cash flows of our company as of and for the periods presented below. The following discussion and analysis should be read in conjunction with our financial statements and the related notes thereto included elsewhere in this prospectus. The discussion contains forward-looking statements that are based on the beliefs of management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed below and elsewhere in this prospectus, particularly in the sections titled "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements".*

**OUR COMPANY**

**Overview**

Our company operates in the nutraceutical supplement industry. We are a manufacturer and distributor of supplements in categories such as pain, energy, prenatal, general health, bone and joint, gastro, immunity, cardiac, detox, mental clarity & focus, sleep, prenatal and urinary. Our end markets focus on end-consumers through different channels that include pharmacies, US wholesalers, international distributors and direct-to-consumers sales. Our products are sold over the counter, and consumers do not need a prescription to purchase our products. Our products are not approved by the FDA. Our company also operates in the hemp industry as a retailer of hemp derived products in categories such as capsules, cigarettes, gummies, and tinctures with a commercial end market, and end-consumers.

**Our Products**

 

*Kirkman Brand*

Our "Kirkman" brand products are manufactured in our FDA registered, cGMP certified facility in Lake Oswego, Oregon. Established in 1949, Kirkman specializes in manufacturing nutritional supplements and is one of the oldest companies dedicated to serving the special needs community.

Our Kirkman brand offers more than 150 products including probiotics, enzymes, vitamins, multivitamins, amino acids, antioxidants, immune support, essential fatty acids, preconception, prenatal supplements, personal care products and other specialty products. Kirkman treats patients with autism spectrum disorders and special dietary needs through an established network of over 2,000 doctors in over 40 countries. Our Kirkman brand operates in 95% of the major subsegments in the supplement industry. Kirkman has a long-standing loyal customer and consumer base due to the rigorous testing of products in compliance with FDA requirements. Kirkman has been endorsed by various businesses and celebrities, including the famous and original Shark Tank member, Kevin Harrington.

<u>Digestive enzymes</u>: Over the counter oral digestive enzyme supplements are a combination of proteases, which aid protein digestion; lipases, which aid in fat digestion; and amylases, which aid in carbohydrate digestion. These may be prescribed by a doctor in some cases, when the pancreas does not make enough digestive enzymes on its own. People are increasingly taking over the counter ("OTC") digestive enzymes in lower doses to support general gut health.

<u>Essential fatty acids</u>: Also called omega-3 fatty acids, essential fatty acids are important digestive chemicals that the body cannot make on its own.

Our products under the Kirkman Brand include, but are not limited to, the following:

&nbsp;&nbsp;&nbsp;&nbsp;● Supplements for Autism; ● Essential Fatty Acids;

● Oxytocin; ● Vitamin B12;

● Vitamin B6 and Magnesium; ● Glutathione;

● Melatonin; ● Functional Mushrooms;

● Probiotics; ● Multivitamins and Minerals; and

● Digestive Enzymes; ● Antioxidants.

● Amino Acids;

 

*P2i (prenatal) Brand*

In April 2024, we launched a certified prenatal vitamin for expectant mothers under the P2i by Kirkman brand. These vitamins have been specially formulated by our company to provide essential nutrients for both the mother and the developing fetus. The International Federation of Gynecology and Obstetrics ("FIGO") published a position statement about toxic chemicals and environmental contaminants in prenatal vitamins. FIGO's recommendation from the October 2023 position statement highlights that patients should only consume, and clinicians should only prescribe, vitamins and supplements that have been independently assessed to make certain they do not contain contaminants. Manufacturers should be held to a standard of production that assures safety and minimizes contaminants and certification of all prenatal vitamins becomes the standard of care. The FIGO Committee report on Climate Change and Toxic Environmental Exposures brought together global scientists to review the reputable reference sources for chemicals that have the potential to impact maternal and newborn health, including the USA Environmental Protection Agency, the European Union, and the California EPA.

The group of experts recommended several approaches, including:

&nbsp;&nbsp;&nbsp;&nbsp;1. creating
 a list of toxic chemicals and contaminants that should be screened for in Prenatal Vitamins
 and reduced to de minimis standards; and

&nbsp;&nbsp;&nbsp;&nbsp;2. conducting
 assays of existing vitamins to assess ongoing risk to maternal and newborn health. This work
 can extend to personal exposure risk by offering women testing for the presence of potentially
 toxic environmental chemicals. Mass Spectrometry currently offers the most comprehensive
 measurement.

This first publication of a list of toxic chemicals and contaminants represents the most comprehensive testing available at present but does not purport to identify or eliminate all potential sources of toxicity.

We are currently the only certified prenatal vitamin in the market that aligns to the FIGO position statement. We have formulated and produced a prenatal vitamin called P2i by Kirkman. There are approximately 3.6 million pregnancies alone in the United States (https://www.cdc.gov/nchs/fastats/births.htm) and the initial market focus for this product will be the United States with the expectation to expand globally since FIGO's position statement reaches all countries.

 

The P2i by Kirkman prenatal vitamin has been certified by The FORUM, a nonprofit 501(c)(3) organization dedicated to promoting low-toxicity standards for prenatal healthy products. The FORUM operates under a MOU with FIGO, a globally recognized organization of obstetricians and gynecologists. This MOU establishes a shared objective to reduce environmental toxicity in prenatal products.

● The certification process involves rigorous testing and evaluation to ensure compliance with The FORUM's low-toxicity standards, which align with FIGO's objectives for maternal and fetal health. These standards include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Analysis
 of 24 Heavy Metals, ensuring levels are below stringent safety thresholds

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Testing
 for the presence of 120 toxic chemicals, such as pesticides and endocrine disruptors, with
 strict limits to prevent potential harm

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Utilization
 of ISO 17025-accredited laboratories for all testing to ensure reliability and reproducibility
 of results

● Purity Labs, an ISO 17025-accredited laboratory, as directed by The FORUM, conducted testing, which confirmed the product's compliance with The FORUM's criteria. Based on this testing, The FORUM issued its certification, indicating that Kirkman's prenatal vitamin meets its standards for low toxicity and safety.

*HempTown Naturals Brand*

All HempTown Naturals products are produced and sold in compliance with the US 2018 Farm Bill and the US Agricultural Act of 2014. Cannabidiol ("CBD") and cannabigerol ("CBG") are cannabinoids present in the cannabis plant. Both CBD and CBG are used in hemp derived products. These products are believed to help in treating certain neurodegenerative and inflammatory conditions<sup>1</sup>.

<sup>1</sup> https://www.medicalnewstoday.com/articles/cgb-vs-cbd

CBD

CBD is the second most prevalent ingredient in cannabis. While CBD is an integral component of medical marijuana, it is derived directly from the hemp plant, both of which are the same species: Cannabis sativa L. One of the hundreds of components of Cannabis sativa L., CBD does not cause a "high" by itself. According to a report from the World Health Organization, "In humans, CBD exhibits no effects indicative of any abuse or dependance potential…. To date, there is no evidence of public health related products associated with the use of pure CBD."<sup>2</sup>

As reported by Forbes Health, CBD is applied topically or consumed through smoke inhalation or edible consumption. CBD interacts with neuroreceptors in your endocannabinoid system, which sends signals between your cells to help regulate your movement, mood, homeostasis, and immune system. Different studies have shown that CBD can offset everyday anxiety and depression.<sup>3</sup>

CBG

CBG is another compound found in hemp which doesn't have intoxicatingly psychoactive effects. CBG, often referred to by experts as "the mother of all cannabinoids," is the cannabinoid from which other types of cannabinoids (including CBD) are derived, says Michelle Sexton, a naturopathic doctor who works at the Pain Trauma Institute in San Diego. "CBG is the first compound in the biosynthesis (the production of chemical compounds by a living organism) of the other cannabinoids," she adds.

CBG is available in many forms, including tinctures, gummies, capsules and topical creams and lotions. CBG is often coupled with CBD in these products because the two cannabinoids can provide complimentary benefits, such as decreasing inflammation and pain, says Fraser Smith, a naturopathic doctor, as well as assistant dean and associate professor at the National University of Health Services in Lombard, Illinois. CBD and CBG occur naturally in hemp extract which is the source of our cannabinoids.<sup>4</sup>

 

*Golf Mellow Brand*

The Company has utilized existing product formulations with plans to introduce 12 different products under the Golf Mellow brand. A brand logo and packaging has been created to support the existing formulations. These supplements will be targeting the golf industry and golf professionals. These products include capsules, a powder, a cream and tinctures to help golfers of all levels improve their game and overall well-being. The capsules are packed with a blend of essential vitamins and minerals that support joint health, flexibility, and energy levels. The tinctures are made from all-natural ingredients and provide a quick and easy way to support focus and mental clarity, helping athletes stay in the zone and make the perfect shot. The creams are specially designed to provide targeted relief for sore muscles and joints, helping them stay comfortable and focused on the course. Some of these products include Sleep Caps to ensure that players are well rested the night before, Super B12 Powder which provides the energy needed for the perfect round, Calm Caps which help manage anxiety when players need it most, and Epsom Salt Cream & Recovery Caps, which aids with recovery.

According to data from the National Golf Foundation 25.1 million people (aged six and over) played on a golf course in the United States in 2021 – furthermore there were another 12.4 million people who took part in off-course activities like driving ranges, indoor golf simulators or venues like Topgolf and Drive Shack.<sup>5</sup>

<sup>2</sup> www.health.harvard.edu

<sup>3</sup> www.forbes.com/health/body/cbd-oil-benefits/

<sup>4</sup> www.forbes.com/health/body/cannabigerol-cbg/

<sup>5</sup> https://www.golfmonthly.com/news/how-many-golfers-are-there-in-the-united-states

**Competitive Strengths**

The Kirkman brand has been in business for over 70 years with a loyal consumer base and we believe that we maintain high purity and quality standards in the industry. We source all materials from high quality suppliers.

We test our finished goods in certified laboratories with state-of-the-art equipment and manufacture our supplements in our US-based cGMP certified and FDA registered facility located in Lake Oswego, Oregon. The FDA requires that we conduct at least one appropriate test or examination to verify and identify any component that is a dietary ingredient. We conduct ingredient testing by verifying the identity through ISO certified 3rd party laboratories. We also test for residual solvents and pesticides (where applicable), presence of up to 24 heavy metals and microbial contamination that could lead to illness or death. Microbial tests can include, but are not limited to, aerobic plate count, yeast & mold, coliforms, E. coli, pseudomonas, staphylococcus aureus, Bile Tolerant gram negative, Salmonella, Aflatoxins and listeria. Heavy metals testing includes beryllium, aluminum, vanadium, chromium, manganese, cobalt, nickel, copper, zinc, arsenic, selenium, molybdenum, palladium, silver, cadmium, tin, antimony, barium, tungsten, platinum, thallium, lead, uranium and mercury. For incoming raw ingredients, we ID using the following methods: Botanicals – HPLC (High Pressure Liquid Chromatography) or TLC (Thin Layer Chromatography), or an approved Chemical test; Vitamins – IR (Infrared) absorption, Chemical test, UV (Ultraviolet) absorption, UV fluorescence, GC (Gas Chromatography), HPLC; Minerals – ICP-MS (Inductively Coupled Plasmas – Mass Spectroscopy), IR (Infrared), Chemical tests, TLC (Thin Layer Chromatography); Enzymes – HPLC (High Pressure Liquid Chromatography), PCR (Polymerase Chain Reaction); Amino Acids – IR absorption, Optical Rotation, HPLC, TLC, GC (Gas Chromatography), Assay; Probiotics – PCR and HPLC; Metals – HPLC or ICP-MS; Micros – Cell culture and cell identification.

The FDA requires that a finished batch of the dietary supplement meets product specifications for identity, purity, strength, composition, and for limits on those types of contamination that may adulterate or that may lead to adulteration of the finished batch of the dietary supplement. This can be conducted for a subset of finished dietary supplement batches through a sound statistical sampling plan (or for every finished batch). For our business, we test every batch of products to ensure heavy metals are below Pop 65 limits. In addition, every batch is tested for microbial contamination. Our 75+ year history in the industry, along with our rigorous material testing, allows Kirkman to use statistical sampling to ensure the identity, purity and strength of each product is met. Our formulations use proprietary blends.

Although we are authorized to produce hemp derived products because we hold a hemp handler's license, we currently do not grow any hemp, but we source our hemp derived products from registered growers in operation. The FDA does not require any testing on dietary supplements whereas we test for approximately 90 metals and toxins in raw materials.

As previously mentioned, we've recently launched P2i by Kirkman prenatal vitamin, which is the only certified prenatal vitamin that aligns to FIGO's position statement.

The P2i by Kirkman prenatal vitamin has been certified by The FORUM, a nonprofit 501(c)(3) organization dedicated to promoting low-toxicity standards for prenatal healthy products. The FORUM operates under a Memorandum of Understanding (MOU) with FIGO, a globally recognized organization of obstetricians and gynecologists. This MOU establishes a shared objective to reduce environmental toxicity in prenatal products.

● The certification process involves rigorous testing and evaluation to ensure compliance with The FORUM's low-toxicity standards, which align with FIGO's objectives for maternal and fetal health. These standards include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Analysis
 of 24 Heavy Metals, ensuring levels are below stringent safety thresholds

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Testing
 for the presence of 120 toxic chemicals, such as pesticides and endocrine disruptors, with
 strict limits to prevent potential harm

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Utilization
 of ISO 17025-accredited laboratories for all testing to ensure reliability and reproducibility
 of results

● Purity Labs, an ISO 17025-accredited laboratory, as directed by The FORUM, conducted testing, which confirmed the product's compliance with The FORUM's criteria. Based on this testing, The FORUM issued its certification, indicating that Kirkman's prenatal vitamin meets its standards for low toxicity and safety.

We have an exclusive license agreement with the Trailer Park Boys ("TBP") to market and sell hemp derived products. There are two product categories that include Hemp Derived Delta 9 products. This includes Delta 9 gummies and Delta 9 Drink Enhancers. The revenue from these two product categories represents approximately 0.6% of total company revenue. entered. To date, $575,000 has been paid to TBP under the license agreement and TBP has been issued 14,440 shares of common stock of the Company. The Company and TBP are negotiating a termination of the license agreement effective as of December 31, 2025, with up to a maximum of $150,000 in remaining accrued royalties to be paid by the Company to TBP no later than March 31, 2026.

**Growth Strategy**

We aim to be a leader in the nutraceutical space by manufacturing products held to the highest standard of quality in terms of toxins, metals, and other impurities. Our goal is to build a well-rounded portfolio of products including mushroom-based supplements targeted for everyday use, prenatal, athletes and beyond.

We plan to do this by:

● Strengthening our existing 70-year-old Kirkman brand with its established base of consumers in the autism community by curating our product mix to cater to their specific needs;

● Launching multiple brands, broad as well as niche, including P2i by Kirkman which is the only certified prenatal vitamin supporting FIGO's October 2023 position statement, to allow us to increase our market share;

● Modernizing our manufacturing capabilities by reorganizing the space and introducing new and efficient machinery and equipment to significantly enhance our output;

● Investing heavily into our sales and marketing activities as well as business development in order to increase sales and distribution; and

● Identify key companies with synergistic strengths for partnerships or acquisitions.

**Challenges, Risks and Limitations** 

Our ability to utilize our competitive advantages in order to strengthen and expand our business and achieve our growth plan is subject to a number of risks and uncertainties more fully discussed under "Risk Factors" in this Prospectus. As discussed in our financial statements, we have suffered recurring losses from operations and have a significant accumulated deficit. In addition, we continue to experience negative cash flows from operations. This limited working capital capabilities may delay or make the accomplishment of our growth plans difficult. In assessing the likelihood of our future success, investors in this offering should note our history of losses and the likelihood of our operating profitability in the future. Further, some of our products may be subject to unpredictable and evolving federal, state and local regulations concerning hemp, CBD and other non-tobacco consumable products. Because the type, timing, and impact of such regulations remain uncertain, we cannot give any assurance that such actions will not have a material adverse effect on this emerging business and our strategy.

**Our Corporate History and Structure**

Functional Brands was organized under the General Corporation Law in the State of Delaware on November 19, 2020 under the name HT Naturals Inc. HT Naturals Inc. changed its name to Functional Brands Inc. on March 23, 2023. Our principal business is the production, marketing, sales, and distribution of nutraceutical products through our Kirkman division, alongside our hemp derived products under the Hemptown brand in certain states within the United States that permit such sales. We ship our Kirkman products to all US states. As for hemp derived products, we only sell to states which permit this activity with certain restrictions such as the content of THC which differs depending on the state.

The states in which we have sold hemp derived products in the past are Alabama, Arizona, Arkansas, California (D9 ingestible and CBD/CBG ingestible only), Colorado (CBD/CBG inhalable only), Connecticut, Delaware (D9 ingestible), Florida, Georgia (D9 ingestible and CBD/CBG ingestible only), Hawaii (CBD/CBG ingestible only), Illinois(D9 ingestible and CBD/CBG inhalable), Indiana (D9 ingestible only), Iowa (D9 ingestible only), Kansas, Kentucky (D9 ingestible only), Louisiana, Maine (D9 ingestible and CBD/CBG inhalable), Maryland (CBD/CBG inhalable only), Massachusetts, Michigan, Minnesota, Missouri, Montana, Nevada, New Hampshire, New Jersey, New York (D9 and CBD/CBG ingestible only), North Carolina, North Dakota (CBD/CBG ingestible only), Ohio, Oklahoma, Oregon (CBD/CBG ingestible only), Pennsylvania, Rhode Island, South Carolina, South Dakota (D9 ingestible only), Tennessee (CBD/CBG inhalable only), Texas, Virgina (CBD/CBG ingestible and inhalable only), Washington (CBD/CBG Inhalable only), West Virginia, Wisconsin, Wyoming.

We have engaged specialized hemp counsel to provide regular updates on the 50 states and the legality of our hemp products in each state. In addition, we have established and followed a standard of operating procedure (SOP) to ensure sales do not occur in the states where hemp products may not be sold consistent with the regular updates provided by our hemp counsel. We have an internal policy that prohibits us as a company and any of our executives, directors, employees, sales representatives and distributors to distribute any of the Company's hemp derived products in places in which the sale of hemp derived products is prohibited. We are a 98% subsidiary of HOC, a British Columbia, Canada private operating holding company with various interests in nutraceutical manufacturing and federally legal industrial hemp products. We were granted a licensing agreement by Hemptown Organics Corp. The licensing agreement, dated December 10, 2020, provides Functional Brands Inc. as licensee, a license to use the Hemptown USA and Hemptown Naturals brand and trademarks on a perpetual, non-exclusive, non-transferable basis, with no expiry date. This licensing agreement will transfer full ownership to Functional Brands upon the public offering and listing on the exchange, at which time HOC will dividend out the majority of the Company's shares currently held by HOC.

On July 3, 2019, HTO Holdings Inc. ("HTO Holdings") a wholly owned subsidiary of HOC and the owner of all issued and outstanding stock of HTO Nevada (as "Purchaser"), entered into an asset purchase agreement ("APA") for the net assets of Kirkman Group Inc. a Nevada corporation, Kirkman Laboratories Inc., an Oregon corporation and Kirkman Group International, Inc. a Nevada corporation (collectively "Kirkman" or the "Seller," and together with Purchaser, the "Parties") for a consideration equal to $5 million with payout in a business combination of cash and deferred consideration. The "Seller" is David Humphrey. Under the APA, Purchaser and HTO Holdings were to make certain additional payments toward the purchase price. The APA was amended on November 30, 2021 by the Parties with the purpose of modifying the payment schedule of the deferred consideration; and in exchange for amending the payment schedule of the deferred consideration, the Purchaser and HTO Holdings agreed to enter into a security agreement, and amend the APA and other agreements attached to the APA (including, but not limited to, the non-competition agreement, the trademark assignment agreement, the domain names transfer agreement, the assignment of intangible assets, and the intellectual property security agreement (collectively, the "IP Collateral Agreements") to, among other things, provide additional collateral as security to Seller. Upon payment in full in cash of the deferred consideration or set-off of the deferred consideration, as amended: (i) each of the Parties agreed that the security agreement and amended intellectual property security agreement would be automatically terminated and be of no further force and effect; and (ii) Seller would, at its sole cost and expense, release all liens in the IP Collateral, as defined in the respective security agreement and intellectual property security agreement, and all rights therein would forthwith revert to Purchaser. On May 16, 2022, the APA was amended again by the Parties, to reflect further modifications to the schedules and exhibits to the APA and IP Collateral Agreements. On May 31, 2022, Purchaser paid Seller certain amounts ("Immediate Payments"), and on July 23, 2022, Purchaser and Seller executed a forbearance agreement ("Forbearance Agreement") to extend the payments due under the APA to August 31, 2022. After Purchaser's default, and partial payment to Seller in September 2022, the Parties executed an amendment to the Forbearance Agreement on December 27, 2022, to extend certain payments due under the APA, at which time the remaining balance due was $3,032,000..

On September 24, 2024, the Company executed a Fourth Amended Forbearance Agreement which allowed the postponement of principal payments. The remaining balance due is $2,227,366 (the "Existing Default"). On May 28, 2025, the Company executed a Sixth Amended Forbearance Agreement (the "Sixth Amendment") to provide Purchaser with a period of time to cure the Existing Default and Purchaser and the Company also executed a Confession of Judgement for Money Awarded and Decree of Foreclosure which upon a default by Purchaser under the Sixth Amendment (a "Forbearance Default") may be filed with the Circuit Court of the State of Oregon allowing assets of the Purchaser and the Company to be foreclosed upon to satisfy payment of the Existing Default. Subject to compliance by Purchaser with the terms and conditions of this Sixth Amendment, Sellers agreed to forbear from exercising their rights and remedies against Purchaser under the transaction documents with respect to the Existing Default during the period commencing on the date of execution of the Sixth Amendment by all parties and ending on the earlier to occur of (i) July 20, 2025 and (ii) the date that any Forbearance Default occurs, upon which, Sellers' forbearance, as provided herein, shall immediately and automatically cease without any requirement of notice or further action by any party (the "Termination Date"). On July 9, 2025, the Company executed a Seventh Amended Forbearance Agreement extending clause (i) of the Termination Date to August 30, 2025. On August 27, 2025 the Company executed an Eighth Amended Forbearance Agreement extending clause (i) of the Termination date to September 30, 2025. On and from the Termination Date, Sellers may, in their sole discretion, exercise any and all remedies available to them under the transaction documents that otherwise would be available only by reason of the occurrence of any Events of Default thereunder or the continuation of any Existing Default. As of August 27, 2025, the balance of $2,227,366 owed to Seller is due and payable by September 30, 2025. We intend to use a portion of the proceeds of the private placement to cure the Existing Default.

As a part of our restructuring efforts, HTO Nevada, formerly owned by HTO Holdings, was acquired by Functional Brands on May 19, 2023, through a share exchange agreement executed by HOC, HTO Holdings and Functional Brands. On August 5, 2025, Functional Brands ceased to be deemed a controlled company, As of the date of this prospectus, HOC holds no shares of Functional Brands. Our fiscal year-end is December 31.

**Corporate Information**

We are currently incorporated and in good standing in the State of Delaware. Our registered address is 6400 SW Rosewood Street, Lake Oswego, Oregon 97035 and our telephone number is (800) 245-8282. We maintain the following websites: https://functtionalbrandsinc.com, https://kirkmangroup.com and https://hemptownnaturals.com. Information available on our website is not incorporated by reference in and is not deemed a part of this prospectus, and you should not consider any information contained on, or that can be accessed through, our website as part of this prospectus or in deciding whether to purchase our common stock.

**NASDAQ Listing**

We intend to list our common stock on NASDAQ. There is no assurance that our listing application will be approved by NASDAQ. If our application to NASDAQ 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 the offering.

**Results of Operations**

***Comparison Six Months Ended June 30, 2025, to the Six Months Ended June 30, 2024***

 ****

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Six Months Ended<br> June 30, 2025**<br> **(Unaudited)** | **Six Months Ended<br> June 30, 2024**<br> **(Unaudited)** | **$ Change** | **% Change** |
| **Statements of Operations Data** | | | | |
| Net Revenue | 3422789 | 3490446 | (67657) | -2% |
| Cost of Goods Sold | (1587928) | (1636792) | (48864) | -3% |
| Sales & Marketing | (343669) | (298217) | 45452 | 15% |
| General & Administrative | (1678728) | (1430011) | 248717 | 17% |
| Operating Income / (Loss) | (187536) | 125426 | (312962) | -250% |
| Other Income / (Expense), Net | (165302) | (118951) | (46351) | 39% |
| **Net Loss** | $**(352838)** | **6475** | $**(359313)** | **-5549%** |

---

*Revenue*

 

Revenue for the six months ended June 30, 2025, was $3,422,789 compared to $3,490,446 in revenue for the six months ended June 30, 2024, representing a decrease of approximately 2%. This decrease in revenue was primarily attributed to lower demand from contract manufacturing customers.

*Operating Costs and Expenses*

 

<u>Cost of goods sold (COGS)</u>

Cost of goods sold for the six months ended June 30, 2025 was $1,587,928, compared to $1,636,792 in cost of goods sold for the six months ended June 30, 2024, representing a decrease of approximately 3%. This decrease of $48,864 is primarily attributed to a 2% decrease in net revenue recorded for the six months ended June 30, 2025, as well as tightening cost controls and negotiating better terms with vendors.

 

<u>Selling and marketing costs (S&M)</u>

Selling and marketing costs consisted of payroll, ecommerce expenses, as well as advertising & promotion.

Selling and marketing costs for the six months ended June 30, 2025, was $343,669 compared to $298,217 for the six months ended June 30, 2024, representing an increase of approximately 15%. This increase of selling and marketing costs is primarily attributed to the efforts from the Company to acquire more customers through various methods (email blasts, Amazon marketing) and increase of P2i product advertising campaign.

<u>General and administrative expenses (G&A)</u>

General and administrative costs consisted of professional services, consulting service, legal fees, rent, utilities, insurances and payroll.

General and administrative expenses for the six months ended June 30, 2025, increased to $1,678,728, compared to $1,430,011 for the six months ended June 30, 2024, representing an increase of approximately 17%. This increase was primarily attributed to issuance of shares for services rendered during the period.

<u>Operating Loss</u> 

Operating loss for the six months ended June 30, 2025, was $187,536 compared to operating income of $125,426 during the six months ended June 30, 2024, representing a decrease of approximately 250%. This decrease is primarily attributed to the decline of sales and the increase in expenses for the six months ended June 30, 2025, as explained above.

<u>Other income / (expenses)</u>

Other expenses for the six months ended June 30, 2025 were $165,302, compared to other expenses of $118,951 for the six months ended June 30, 2024, representing an increase of approximately 39%. This increase was the result of interest in loans acquired by the Company during the six months ended June 30, 2025.

 

*Net loss*

Net loss for the six months ended June 30, 2025 was $352,838, compared to a net income of $6,475 for the six months ended June 30, 2024, representing a decrease of approximately 5,549%. The net loss is primarily attributed to the explanations above.

***For the Year Ended December 31, 2024, compared to the Year Ended December 31, 2023***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024**<br> **(Audited)** | **December 31, 2023**<br> **(Audited)** | **$ Change** | **% Change** |
| **Statements of Operations Data** | | | | |
| **Net Revenue** | $6566455 | $6820499 | $(254044) | -4% |
| **Cost of Goods Sold** | (2959609) | (3641648) | 682039 | -19% |
| **Sales & Marketing** | (576315) | (588772) | 12457 | -2% |
| **General & Administrative** | (3259623) | (3672582) | 412959 | -11% |
| **Operating Loss** | (229092) | (1082503) | 853411 | -79% |
| **Other Income / (Expense), Net** | (330264) | (158591) | (171673) | 108% |
| **Net Loss** | $**(559356)** | $**(1241094)** | $**681738** | **-55%** |

---

*<u>Revenue</u>*

 

Revenue for 2024 was $6,566,455 compared to $6,820,499 for revenue in 2023, resulting in a decrease of 4% year over year. This decrease is primarily attributed to lower demand from contract manufacturing customers.

 

*Operating Costs and Expenses*

 

<u>Cost of goods sold (COGS)</u>

Cost of goods sold for 2024 was $2,959,609 compared to $3,641,648 for cost of goods sold in 2023 representing a decrease approximately 19%. This decrease of $682,039 is partially attributable to 4% lower net revenue recorded for the year ended December 31, 2024, as well as tightening costs controls and negotiating better terms with vendors.

<u>Selling and marketing costs (S&M)</u>

Selling and marketing costs consisted of payroll, ecommerce expenses, as well as advertising & promotion.

Selling and marketing costs for 2024, was $576,315 compared to $588,772 for the year ended December 31, 2023, resulting in a 2% decrease year over year.

<u>General and administrative expenses (G&A)</u>

General and administrative costs consisted of professional consulting & legal fees, as well as rent & utilities, insurance and payroll.

General and administrative expenses for 2024 was $3,259,623, compared to $3,672,582 for the year ended December 31, 2023, resulted in an 11% decrease. This Decrease primarily attributed to less consulting expenses incurred year over year.

<u>Operating Loss</u> 

Operating loss for 2024 was $229,092 compared to $1,082,503 in 2023, representing a decrease of approximately 79%. This is the result of the Company's continuous work to stabilize the company by tightening costs including COGS and G&A, as described above.

<u>Other income / (expenses)</u>

Other expenses for 2024 was $330,264 compared to $158,591 in 2023, representing an increase of approximately 108%. This increase is the result of interest amended to the asset purchase acquisition taking place in 2024 and interest incurred on extension of loan agreement.

*Net loss*

 

Net loss for 2024 was $559,356 compared to a net loss of $1,241,094 in 2023, representing a decrease of approximately 55%. The net loss is attributable to the explanation above.

**Liquidity and Capital Resources**

***Sources and Uses of Cash for the six months ended June 30, 2025 and 2024***

The table below, for the periods indicated, provides selected cash flow information:

---

| | | |
|:---|:---|:---|
|  | **Six-months Period Ended<br> June 30,<br> 2025**<br> **(Unaudited)** | **Six-months Period Ended<br> June 30,<br> 2024**<br> **(Unaudited)** |
| Net cash used in operating activities | $647757 | 3844 |
| Net cash used in investing activities |  | 1881 |
| Net cash provided by financing activities | (601716) | 66618 |
| Net increase in cash | $46041 | 72343 |

---

Material cash requirements from known contractual and other obligations:

Excluding debt obligations from ongoing operations, the Company owes $2,227,367 payable for acquisition as of June 30, 2025. On September 24, 2024, the Company executed a Forbearance Agreement with the former owner of Kirkman. This allows the postponement of principal payment. On the same date, the Company executed a Confession of Judgement in connection with the principal owed. This allowed the seller to enter a judgement against the Company in The Circuit Court of The State of Oregon for the County of Clackamas. On July 9, 2025 the Company executed the seventh amended forbearance agreement to extend the deadline until August 30, 2025 which has been extended to September 30, 2025.

Use of cash

The change in net cash used in financing activities was primarily the result of the payment for payable acquisition as well as line of credit repayment.

*Source of cash*

During the six-months period, the Company executed multiple loan agreements which served as a source of cash as the Company was no longer raising funds for Reg CF nor Reg D.

*<u>Cash Flows from Operating Activities</u>*

Provided by operating activities for the six months ended June 30, 2025 was $647,757, compared to cash used in operating activities of $3,844 during the six months ended June 30, 2024, representing an increase of approximately 16,751%. This increase in net cash provided by operating activities is attributable to stock-based compensation for the period.

*<u>Cash Flows from Financing Activities</u>*

Cash used in financing activities for the six months ended June 30, 2025 was $601,716, compared to cash provided by financing activities of $66,618 in the six months ended June 30, 2024, representing an increase of approximately 1,003%. This is increase of cash used in financing activities is the result of capitalization of cost incurred for the IPO and repayments of loans and the asset purchase acquisition.

Source of cash

On April 29, 2025, the Company entered into a loan agreement with a third-party whereby the Company received $100,000. The term of the loan is for 1 year with a 22.95% finance charge.

On March 10, 2025, the Company executed a loan agreement with a related party in the amount of $225,000, with an annual interest rate of 18% to be paid off in 4 years.

***Sources and Uses of Cash for the Years Ended December 31, 2024 and 2023***

The table below, for the periods indicated, provides selected cash flow information:

---

| | | |
|:---|:---|:---|
|  | **Year Ended<br> December 31,<br> 2024**<br> **(Audited)** | **Year Ended<br> December 31,<br> 2023**<br> **(Audited)** |
| Net cash provided by operating activities | $1990 | 248169 |
| Net cash used in investing activities | (1881) | (3500) |
| Net cash used in provided by financing activities | (162902) | (73061) |
| Net increase (decrease) in cash | $(162793) | 171608 |

---

Material cash requirements from known contractual and other obligations:

Excluding debt obligations from ongoing operations, the Company owes $2,342,366 payable for acquisition as of December 31, 2024. On September 24, 2024, the Company executed a Forbearance Agreement with the former owner of Kirkman. This allows the postponement of principal payment. On the same date, the Company executed a Confession of Judgement in connection with the principal owed. This allowed the seller to enter a judgement against the Company in The Circuit Court of The State of Oregon for the County of Clackamas. On March 5, 2025 the Company executed the fifth amended forbearance agreement.

*<u>Cash Flows from Operating Activities</u>*

Cash provided by operating activities for 2024 was $1,990 compared to $248,169 for 2023, representing a decrease of approximately 99%. This decrease in net cash provided by operating activities is attributable to lower inventory turnover, higher balance for accounts payable, accruals, and higher balance for accounts receivable.

*<u>Cash Flows from Investing Activities</u>*

Cash used in investing activities for 2024 was $1,881 compared to $3,500 for 2023, representing a decrease approximately 46%. This decrease was primarily attributed to the purchase of capital property and equipment for lesser value.

*<u>Cash Flows from Financing Activities</u>*

Cash used in financing activities for 2024 was $162,902, compared to cash provided by financing activities of $73,061 in 2023, representing a decrease of approximately 123%. The change in net cash used in financing activities was primarily the result of repayment of lines of credit, payable for acquisition of Kirkman and capitalization of cost incurred in IPO.

Use of cash

During the year ended December 31, 2024 the Company entered into multiple lines of credit agreements with third parties to finance invoices to satisfy multiple vendors of which the following agreements are to be repaid during the year ended December 31, 2025, as the Company was longer raising funds for Reg CF nor Reg D.

On June 18, 2024, the Company executed a loan agreement with a lender in the amount of $150,000. The payment terms are 12.5% OID, initial principal amount consisting of a $150,000 loan plus $21,500 OID totaling $171,500. In addition, the loan required the Company to issue 37,500 warrants with anti-dilution protection as well as an equity interest in the amount of 2,045 shares of the Company's stock with reverse split protection through the Senior Exchange Listing. Loan is to mature the earlier of six months from execution, completion of a senior exchange listing of the Company or as mutually agreed, with an interest rate of the higher of 12% or WSJ Prime plus 4% guaranteed.

On March 11, 2024, the Company executed a loan agreement with a related party in the amount of $130,000, with an annual interest rate of 20% to be paid off in 7 years.

On January 20, 2023, the Company entered a line of credit agreement with a third-party whereby the Company received $300,000. The terms of the loan were for one year, with a 27% contract interest rate. On January 22, 2024, the loan was settled in full, at which point the security interest was released by the lender.

On July 14, 2023, the Company entered into an additional line of credit agreement with a third-party whereby the Company received $100,000. The terms of the loan were for 42 weeks, with a 5% contract interest rate. On July 7, 2024, the loan was settled in full, at which point the security interest was released by the lender.

In December 2023, the Company entered into a short-term debt facility with a related party, an officer and director of the parent company – Hemptown Organics Corp., whereby the Company received $247,634. The loan is non-interest-bearing and remains outstanding as at December 31, 2024.

We anticipate that our cash needs for the next twelve months for working capital and capital expenditures will be approximately $3,600,000. As of December 31, 2024, we had approximately $200,000 in cash, and we believe that our current cash and cash flow from operations will only be sufficient to meet anticipated cash needs for the next six months for working capital and capital expenditures. We will likely also require additional cash resources due to possible changed business conditions or other future developments. We plan to seek to sell additional equity securities to generate additional cash to continue operations. We may also sell debt securities to generate additional cash. The sale of equity securities, or of debt securities that are convertible into our equity, could result in additional dilution to our shareholders. The incurrence of additional indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations and liquidity.

Our ability to obtain additional capital on acceptable terms is subject to a variety of uncertainties, including the following: investors' perception of, and demand for, securities of cigarette and hemp companies; conditions of the U.S. and other capital markets in which we may seek to raise funds; future results of operations, financial condition and cash flow. Therefore, our management cannot assure that financing will be available in amounts or on terms acceptable to us, or if at all. Any failure by us to raise additional funds on terms favorable to us could have a material adverse effect on our liquidity and financial condition.

**Going Concern**

In the event we are not successful in reaching our sustained revenue targets, we anticipate that depending on market conditions and our plan of operations, we will likely incur continued operating losses. We base this expectation, in part, on the fact that we may not be able to generate enough gross profit to cover our operating expenses. Consequently, we may not continue to operate as a going concern in the long term. As described in the section entitled "*Risk Factors*," we are subject to many factors which could detrimentally affect us. Many of these risk factors may be outside management's control, including demand for our products, our ability to hire and retain talented and skilled employees and service providers, as well as other factors. We do not know of any trends, demands, commitments, events or uncertainties that will result in, or that are reasonable likely to result in, our liquidity increasing or decreasing in any material way. We do not know of any significant changes in expected sources and uses of cash. We do not have any commitments or arrangements from any person to provide us with any equity capital.

**Off-Balance Sheet Arrangements**

We currently have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources**.** 

**Critical Accounting Policies**

Our financial statements are based on the application of accounting principles generally accepted in the United States ("GAAP"). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue, and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

Our significant accounting policies are summarized in Note 5 to our financial statements. While these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause an effect on our results of operations, financial position or liquidity for the periods presented in this report.

**Recent Accounting Pronouncements**

From time to time, new accounting pronouncements are issued by FASB that are adopted by us as of the specified effective date. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on our financial statements upon adoption.

**BUSINESS**

**Overview**

Our company operates in the nutraceutical supplement industry. We are a manufacturer and distributor of supplements in categories such as pain, energy, prenatal, general health, bone and joint, gastro, immunity, cardiac, detox, mental clarity & focus, sleep, prenatal and urinary. Our end markets focus on end-consumers through different channels that include pharmacies, US wholesalers, international distributors and direct-to-consumers sales. Our products are sold over the counter and consumers do not need a prescription to purchase our products. Our products are not approved by the FDA. Our company also operates in the hemp industry as a retailer of hemp derived products in categories such as capsules, cigarettes, gummies, and tinctures with a commercial end market, and end-consumers.

**Our Products**

 

*Kirkman Brand*

Our "Kirkman" brand products are manufactured in our FDA registered, cGMP certified facility in Lake Oswego, Oregon. Established in 1949, Kirkman specializes in manufacturing nutritional supplements and is one of the oldest companies dedicated to serving the special needs community.

Our Kirkman brand offers more than 150 products including probiotics, enzymes, vitamins, multivitamins, amino acids, antioxidants, immune support, essential fatty acids, preconception, prenatal supplements, personal care products and other specialty products. Kirkman treats patients with autism spectrum disorders and special dietary needs through an established network of over 2,000 doctors in over 40 countries. Our Kirkman brand operates in 95% of the major subsegments in the supplement industry. Kirkman has a long-standing loyal customer and consumer base due to the rigorous testing of products in compliance with FDA requirements. Kirkman has been endorsed by various businesses and celebrities, including the famous and original Shark Tank member, Kevin Harrington.

<u>Digestive enzymes</u>: Over the counter oral digestive enzyme supplements are a combination of proteases, which aid protein digestion; lipases, which aid in fat digestion; and amylases, which aid in carbohydrate digestion. These may be prescribed by a doctor in some cases, when the pancreas does not make enough digestive enzymes on its own. People are increasingly taking over the counter ("OTC") digestive enzymes in lower doses to support general gut health.

<u>Essential fatty acids</u>: Also called omega-3 fatty acids, essential fatty acids are important digestive chemicals that the body cannot make on its own.

Our products under the Kirkman Brand include, but are not limited to, the following:

&nbsp;&nbsp;&nbsp;&nbsp;● Supplements
 for Autism; ● Essential
 Fatty Acids;

● Oxytocin; ● Vitamin
 B12;

● Vitamin
 B6 and Magnesium; ● Glutathione;

● Melatonin; ● Functional
 Mushrooms;

● Probiotics; ● Multivitamins
 and Minerals; and

● Digestive
 Enzymes; ● Antioxidants.

● Amino Acids;

 

*P2i (prenatal) Brand*

In April 2024, we launched a certified prenatal vitamin for expectant mothers under the P2i by Kirkman brand. These vitamins have been specially formulated by our company to provide essential nutrients for both the mother and the developing fetus. The International Federation of Gynecology and Obstetrics ("FIGO") published a position statement about toxic chemicals and environmental contaminants in prenatal vitamins. FIGO's recommendation from the October 2023 position statement highlights that patients should only consume, and clinicians should only prescribe, vitamins and supplements that have been independently assessed to make certain they do not contain contaminants. Manufacturers should be held to a standard of production that assures safety and minimizes contaminants and certification of all prenatal vitamins becomes the standard of care. The FIGO Committee report on Climate Change and Toxic Environmental Exposures brought together global scientists to review the reputable reference sources for chemicals that have the potential to impact maternal and newborn health, including the USA Environmental Protection Agency, the European Union, and the California EPA.

The group of experts recommended several approaches, including:

&nbsp;&nbsp;&nbsp;&nbsp;1. creating
 a list of toxic chemicals and contaminants that should be screened for in Prenatal Vitamins
 and reduced to de minimis standards; and

2. conducting
 assays of existing vitamins to assess ongoing risk to maternal and newborn health. This work
 can extend to personal exposure risk by offering women testing for the presence of potentially
 toxic environmental chemicals. Mass Spectrometry currently offers the most comprehensive
 measurement.

This first publication of a list of toxic chemicals and contaminants represents the most comprehensive testing available at present but does not purport to identify or eliminate all potential sources of toxicity.

We are currently the only certified prenatal vitamin in the market that aligns to the FIGO position statement. We have formulated and produced a prenatal vitamin called P2i by Kirkman. There are approximately 3.6 million pregnancies alone in the United States (https://www.cdc.gov/nchs/fastats/births.htm) and the initial market focus for this product will be the United States with the expectation to expand globally since FIGO's position statement reaches all countries.

 

The P2i by Kirkman prenatal vitamin has been certified by The FORUM, a nonprofit 501(c)(3) organization dedicated to promoting low-toxicity standards for prenatal healthy products.

 

The FORUM operates under a Memorandum of Understanding (MOU) with FIGO, a globally recognized organization of obstetricians and gynecologists. This MOU establishes a shared objective to reduce environmental toxicity in prenatal products.

● The certification process involves rigorous testing and evaluation to ensure compliance with The FORUM's low-toxicity standards, which align with FIGO's objectives for maternal and fetal health. These standards include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Analysis
 of 24 Heavy Metals, ensuring levels are below stringent safety thresholds

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Testing
 for the presence of 120 toxic chemicals, such as pesticides and endocrine disruptors, with
 strict limits to prevent potential harm

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Utilization
 of ISO 17025-accredited laboratories for all testing to ensure reliability and reproducibility
 of results

● Purity Labs, an ISO 17025-accredited laboratory, as directed by The FORUM, conducted testing, which confirmed the product's compliance with The FORUM's criteria. Based on this testing, The FORUM issued its certification, indicating that Kirkman's prenatal vitamin meets its standards for low toxicity and safety.

 

*HempTown Naturals Brand*

All HempTown Naturals products are produced and sold in compliance with the US 2018 Farm Bill and the US Agricultural Act of 2014. Cannabidiol ("CBD") and cannabigerol ("CBG") are cannabinoids present in the cannabis plant. Both CBD and CBG are used in hemp derived products. These products are believed to help in treating certain neurodegenerative and inflammatory conditions<sup>1</sup>.

CBD

CBD is the second most prevalent ingredient in cannabis. While CBD is an integral component of medical marijuana, it is derived directly from the hemp plant, both of which are the same species: Cannabis sativa L. One of the hundreds of components of Cannabis sativa L., CBD does not cause a "high" by itself. According to a report from the World Health Organization, "In humans, CBD exhibits no effects indicative of any abuse or dependance potential…. To date, there is no evidence of public health related products associated with the use of pure CBD."<sup>2</sup>

As reported by Forbes Health, CBD is applied topically or consumed through smoke inhalation or edible consumption. CBD interacts with neuroreceptors in your endocannabinoid system, which sends signals between your cells to help regulate your movement, mood, homeostasis, and immune system. Different studies have shown that CBD can offset everyday anxiety and depression.<sup>3</sup>

CBG

CBG is another compound found in hemp which doesn't have intoxicatingly psychoactive effects. CBG, often referred to by experts as "the mother of all cannabinoids," is the cannabinoid from which other types of cannabinoids (including CBD) are derived, says Michelle Sexton, a naturopathic doctor who works at the Pain Trauma Institute in San Diego. "CBG is the first compound in the biosynthesis (the production of chemical compounds by a living organism) of the other cannabinoids," she adds.

CBG is available in many forms, including tinctures, gummies, capsules and topical creams and lotions. CBG is often coupled with CBD in these products because the two cannabinoids can provide complimentary benefits, such as decreasing inflammation and pain, says Fraser Smith, a naturopathic doctor, as well as assistant dean and associate professor at the National University of Health Services in Lombard, Illinois. CBD and CBG occur naturally in hemp extract which is the source of our cannabinoids.<sup>4</sup>

 

<sup>1</sup> https://www.medicalnewstoday.com/articles/cgb-vs-cbd

<sup>2</sup> www.health.harvard.edu

<sup>3</sup> www.forbes.com/health/body/cbd-oil-benefits/

<sup>4</sup> www.forbes.com/health/body/cannabigerol-cbg/

 

 

*Golf Mellow Brand.* The Company has utilized existing product formulations with plans to introduce 12 different products under the Golf Mellow brand. A brand logo and packaging has been created to support the existing formulations. These supplements will be targeting the golf industry and golf professionals. These products include capsules, a powder, a cream and tinctures to help golfers of all levels improve their game and overall well-being. The capsules are packed with a blend of essential vitamins and minerals that support joint health, flexibility, and energy levels. The tinctures are made from all-natural ingredients and provide a quick and easy way to support focus and mental clarity, helping athletes stay in the zone and make the perfect shot. The creams are specially designed to provide targeted relief for sore muscles and joints, helping them stay comfortable and focused on the course. Some of these products include Sleep Caps to ensure that players are well rested the night before, Super B12 Powder which provides the energy needed for the perfect round, Calm Caps which help manage anxiety when players need it most, and Epsom Salt Cream & Recovery Caps, which aids with recovery.

According to data from the National Golf Foundation 25.1 million people (aged six and over) played on a golf course in the United States in 2021 – furthermore there were another 12.4 million people who took part in off-course activities like driving ranges, indoor golf simulators or venues like Topgolf and Drive Shack.<sup>5</sup>

**Competitive Strengths**

The Kirkman brand has been in business for over 70 years with a loyal consumer base and we believe that we maintain high purity and quality standards in the industry. We source all materials from high quality suppliers. We test our finished goods in certified laboratories with state-of-the-art equipment and manufacture our supplements in our US-based cGMP certified and FDA registered facility located in Lake Oswego, Oregon. The FDA requires that we conduct at least one appropriate test or examination to verify and identify any component that is a dietary ingredient. We conduct ingredient testing by verifying the identity through ISO certified 3rd party laboratories. We also test for residual solvents and pesticides (where applicable), presence of up to 24 heavy metals and microbial contamination that could lead to illness or death. Microbial tests can include, but are not limited to, aerobic plate count, yeast & mold, coliforms, E. coli, pseudomonas, staphylococcus aureus, Bile Tolerant gram negative, Salmonella, Aflatoxins and listeria. Heavy metals testing includes beryllium, aluminum, vanadium, chromium, manganese, cobalt, nickel, copper, zinc, arsenic, selenium, molybdenum, palladium, silver, cadmium, tin, antimony, barium, tungsten, platinum, thallium, lead, uranium and mercury. For incoming raw ingredients, we ID using the following methods: Botanicals – HPLC (High Pressure Liquid Chromatography) or TLC (Thin Layer Chromatography), or an approved Chemical test; Vitamins – IR (Infrared) absorption, Chemical test, UV (Ultraviolet) absorption, UV fluorescence, GC (Gas Chromatography), HPLC; Minerals – ICP-MS (Inductively Coupled Plasmas – Mass Spectroscopy), IR (Infrared), Chemical tests, TLC (Thin Layer Chromatography); Enzymes – HPLC (High Pressure Liquid Chromatography), PCR (Polymerase Chain Reaction); Amino Acids – IR absorption, Optical Rotation, HPLC, TLC, GC (Gas Chromatography), Assay; Probiotics – PCR and HPLC; Metals – HPLC or ICP-MS; Micros – Cell culture and cell identification. The FDA requires that a finished batch of the dietary supplement meets product specifications for identity, purity, strength, composition, and for limits on those types of contamination that may adulterate or that may lead to adulteration of the finished batch of the dietary supplement. This can be conducted for a subset of finished dietary supplement batches through a sound statistical sampling plan (or for every finished batch). For our business, we test every batch of products to ensure heavy metals are below Pop 65 limits. In addition, every batch is tested for microbial contamination. Our 75+ year history in the industry, along with our rigorous material testing, allows Kirkman to use statistical sampling to ensure the identity, purity and strength of each product is met. Our formulations use proprietary blends. Although we are authorized to produce hemp derived products because we hold a hemp handler's license, we currently do not grow any hemp, but we source our hemp derived products from registered growers in operation. The FDA does not require any testing on dietary supplements whereas we test for approximately 90 metals and toxins in raw materials.

As previously mentioned, we launched P2i by Kirkman prenatal vitamin, in 2024, which is the only certified prenatal vitamin that aligns to FIGO's position statement.

<sup>5</sup> https://www.golfmonthly.com/news/how-many-golfers-are-there-in-the-united-states

The P2i by Kirkman prenatal vitamin has been certified by The FORUM, a nonprofit 501(c)(3) organization dedicated to promoting low-toxicity standards for prenatal healthy products. The FORUM operates under a Memorandum of Understanding (MOU) with FIGO, a globally recognized organization of obstetricians and gynecologists. This MOU establishes a shared objective to reduce environmental toxicity in prenatal products.

● The certification process involves rigorous testing and evaluation to ensure compliance with The FORUM's low-toxicity standards, which align with FIGO's objectives for maternal and fetal health. These standards include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Analysis
 of 24 Heavy Metals, ensuring levels are below stringent safety thresholds

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Testing
 for the presence of 120 toxic chemicals, such as pesticides and endocrine disruptors, with
 strict limits to prevent potential harm

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Utilization
 of ISO 17025-accredited laboratories for all testing to ensure reliability and reproducibility
 of results

● Purity Labs, an ISO 17025-accredited laboratory, as directed by The FORUM, conducted testing, which confirmed the product's compliance with The FORUM's criteria. Based on this testing, The FORUM issued its certification, indicating that Kirkman's prenatal vitamin meets its standards for low toxicity and safety.

We have an exclusive license agreement with the Trailer Park Boys ("TBP") to market and sell hemp derived products. There are two product categories that include Hemp Derived Delta 9 products. This includes Delta 9 gummies and Delta 9 Drink Enhancers. The revenue from these two product categories represents approximately 0.6% of total company revenue. To date, $575,000 has been paid to TBP under the license agreement and TBP has been issued 14,440 shares of common stock of the Company. The Company and TBP are negotiating a termination of the license agreement effective as of December 31, 2025, with up to a maximum of $150,000 in remaining accrued royalties to be paid by the Company to TBP no later than March 31, 2026.

**Growth Strategy**

We aim to be a leader in the nutraceutical space by manufacturing products held to the highest standard of quality in terms of toxins, metals, and other impurities. Our goal is to build a well-rounded portfolio of products, including mushroom-based supplements targeted for everyday use, prenatal, athletes and beyond.

We plan to do this by:

● Strengthening our existing 70-year-old Kirkman brand with its established base of consumers in the autism community by curating our product mix to cater to their specific needs;

● Launching multiple brands, broad as well as niche, including P2i by Kirkman which is the only certified prenatal vitamin supporting FIGO's October 2023 position statement, to allow us to increase our market share;

● Modernizing our manufacturing capabilities by reorganizing the space and introducing new and efficient machinery and equipment to significantly enhance our output;

● Investing heavily into our sales and marketing activities as well as business development in order to increase sales and distribution; and

● Identify key companies with synergistic strengths for partnerships or acquisitions.

**Challenges, Risks and Limitations** 

Our ability to utilize our competitive advantages in order to strengthen and expand our business and achieve our growth plan is subject to a number of risks and uncertainties more fully discussed under "Risk Factors" in this Prospectus. As discussed in our financial statements, we have suffered recurring losses from operations and have a significant accumulated deficit. In addition, we continue to experience negative cash flows from operations. This limited working capital capabilities may delay or make the accomplishment of our growth plans difficult. In assessing the likelihood of our future success, investors in this offering should note our history of losses and the likelihood of our operating profitably in the future. Further, some of our products may be subject to uncertain and evolving federal, state and local regulations concerning hemp, CBD and other non-tobacco consumable products. Because the type, timing, and impact of such regulations remains uncertain, we cannot give any assurance that such actions will not have a material adverse effect on this emerging business and our strategy.

**Our Corporate History and Structure**

Functional Brands was organized under the General Corporation Law in the state of Delaware on November 19, 2020 under the name HT Naturals Inc. HT Naturals Inc. changed its name to Functional Brands Inc. on March 23, 2023. Our principal business is the production, marketing, sales, and distribution of nutraceutical products through our Kirkman division, alongside our hemp derived products under the Hemptown brand in certain states within the United States that permit such sales. We ship our Kirkman products to all US states. As for hemp derived products, we only sell to states which permit this activity with certain restrictions such as the content of THC which differs depending on the state.

The states in which we have sold hemp derived products in the past are Alabama, Arizona, Arkansas, California (D9 ingestible and CBD/CBG ingestible only), Colorado (CBD/CBG inhalable only), Connecticut, Delaware (D9 ingestible), Florida, Georgia (D9 ingestible and CBD/CBG ingestible only), Hawaii (CBD/CBG ingestible only), Illinois(D9 ingestible and CBD/CBG inhalable), Indiana (D9 ingestible only), Iowa (D9 ingestible only), Kansas, Kentucky (D9 ingestible only), Louisiana, Maine (D9 ingestible and CBD/CBG inhalable), Maryland (CBD/CBG inhalable only), Massachusetts, Michigan, Minnesota, Missouri, Montana, Nevada, New Hampshire, New Jersey, New York (D9 and CBD/CBG ingestible only), North Carolina, North Dakota (CBD/CBG ingestible only), Ohio, Oklahoma, Oregon (CBD/CBG ingestible only), Pennsylvania, Rhode Island, South Carolina, South Dakota (D9 ingestible only), Tennessee (CBD/CBG inhalable only), Texas, Virgina (CBD/CBG ingestible and inhalable only), Washington (CBD/CBG Inhalable only), West Virginia, Wisconsin, Wyoming. We have engaged specialized hemp counsel to provide regular updates on the 50 states and the legality of our hemp products in each state. In addition, we have established and follow a standard of operating procedure (SOP) to ensure sales do not occur in the states where hemp products may not be sold consistent with the regular updates provided by our hemp counsel. We have an internal policy that prohibits us as a company and any of our executives, directors, employees, sales representatives and distributors to distribute any of the Company's hemp derived products in places in which the sale of hemp derived products is prohibited. We are a 98% subsidiary of HOC, a British Columbia, Canada private operating holding company with various interests in nutraceutical manufacturing and federally legal industrial hemp products. We were granted a licensing agreement by Hemptown Organics Corp. The licensing agreement, dated December 10, 2020, provides Functional Brands Inc. as licensee, a license to use the Hemptown USA and Hemptown Naturals brand and trademarks on a perpetual, non-exclusive, non-transferable basis, with no expiry date. This licensing agreement will transfer to full ownership to Functional Brands upon the public offering and listing on the exchange, at which time HOC will dividend out the majority of the Company's shares currently held by HOC.

On July 3, 2019, HTO Holdings Inc. ("HTO Holdings") a wholly owned subsidiary of HOC and the owner of all issued and outstanding stock of HTO Nevada (as "Purchaser"), entered into an asset purchase agreement ("APA") for the net assets of Kirkman Group Inc. a Nevada corporation, Kirkman Laboratories Inc., an Oregon corporation and Kirkman Group International, Inc. a Nevada corporation (collectively "Kirkman" or the "Seller," and together with Purchaser, the "Parties") for a consideration equal to $5 million with payout in a business combination of cash and deferred consideration. The "Seller" is David Humphrey. Under the APA, Purchaser and HTO Holdings were to make certain additional payments toward the purchase price. The APA was amended on November 30, 2021 by the Parties with the purpose of modifying the payment schedule of the deferred consideration; and in exchange for amending the payment schedule of the deferred consideration, the Purchaser and HTO Holdings agreed to enter into a security agreement, and amend the APA and other agreements attached to the APA (including, but not limited to, the non-competition agreement, the trademark assignment agreement, the domain names transfer agreement, the assignment of intangible assets, and the intellectual property security agreement (collectively, the "IP Collateral Agreements") to, among other things, provide additional collateral as security to Seller. Upon payment in full in cash of the deferred consideration or set-off of the deferred consideration, as amended: (i) each of the Parties agreed that the security agreement and amended intellectual property security agreement would be automatically terminated and be of no further force and effect; and (ii) Seller would, at its sole cost and expense, release all liens in the IP Collateral, as defined in the respective security agreement and intellectual property security agreement, and all rights therein would forthwith revert to Purchaser. On May 16, 2022, the APA was amended again by the Parties, to reflect further modifications to the schedules and exhibits to the APA and IP Collateral Agreements. On May 31, 2022, Purchaser paid Seller certain amounts ("Immediate Payments"), and on July 23, 2022, Purchaser and Seller executed a forbearance agreement ("Forbearance Agreement") to extend the payments due under the APA to August 31, 2022. After Purchaser's default, and partial payment to Seller in September 2022, the Parties executed an amendment to the Forbearance Agreement on December 27, 2022, to extend certain payments due under the APA, at which time the remaining balance due was $3,032,000..

On September 24, 2024, the Company executed a Fourth Amended Forbearance Agreement which allowed the postponement of principal payments. As of May 28, 2025, the remaining balance due is $2,227,366 (the "Existing Default"). On May 28, 2025, the Company executed a Sixth Amended Forbearance Agreement (the "Sixth Amendment") to provide Purchaser with a period of time to cure the Existing Default and Purchaser and the Company also executed a Confession of Judgement for Money Awarded and Decree of Foreclosure which upon a default by Purchaser under the Sixth Amendment (a "Forbearance Default") may be filed with the Circuit Court of the State of Oregon allowing assets of the Purchaser and the Company to be foreclosed upon to satisfy payment of the Existing Default. Subject to compliance by Purchaser with the terms and conditions of this Sixth Amendment, Sellers agreed to forbear from exercising their rights and remedies against Purchaser under the transaction documents with respect to the Existing Default during the period commencing on the date of execution of the Sixth Amendment by all parties and ending on the earlier to occur of (i) July 20, 2025 and (ii) the date that any Forbearance Default occurs, upon which, Sellers' forbearance, as provided herein, shall immediately and automatically cease without any requirement of notice or further action by any party (the "Termination Date"). On July 9, 2025 the Company executed the Seventh Amended Forbearance Agreement which extended clause (i) of the Termination Date to August 30, 2025. On August 27, 2025, the Termination Date was extended to September 30, 2025. On and from the Termination Date, Sellers may, in their sole discretion, exercise any and all remedies available to them under the transaction documents that otherwise would be available only by reason of the occurrence of any Events of Default thereunder or the continuation of any Existing Default. As of August 27 2025, the balance of $2,227,366 owed to Seller is due and payable by August 30, 2025. We intend to use a portion of the proceeds of the private placement to cure the Existing Default.

As a part of our restructuring efforts, HTO Nevada, formerly owned by HTO Holdings, was acquired by Functional Brands on May 19, 2023, through a share exchange agreement executed by HOC, HTO Holdings and Functional Brands.,. On July 11, 2025, Functional Brands ceased to be a controlled company. As of the date of this prospectus, HOC holds no shares of Functional Brands. Our fiscal year-end is December 31.

**Industry**

According to Grand View Research, the Global Nutritional Supplements Market is valued at approximately $405.15B in 2023, and is expected to expand at a compound annual growth rate (CAGR) of 6.3% from 2023 to 2030. Growing attention to health has significantly helped the market thrive. Moreover, the rising prevalence of non-communicable diseases has resulted in the faster adoption of nutritional supplements to enrich overall well-being. According to the Global Alliance for Chronic Diseases (GACD), approximately 75% of deaths globally occur due to non-communicable diseases (NCDs). Thus, these alarming statistics have shifted the focus on well-being and health, which is expected to increase the demand for nutritional supplements.

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The United States Nutritional Supplements Market is valuated at approximately $95.2 billion in 2023 and is expected to expand at a compound annual growth rate (CAGR) of 4.8% from 2023 to 2030. The United States accounted for 23.5% of the global nutritional supplements market in 2023. The U.S. is expected to lead the global market in terms of revenue in 2030. North America nutritional supplements market is projected to lead the regional market in terms of revenue in 2030.

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**\*** Source: Grand View Research

According to Grand View Research, the United States Dietary Supplement Market is valued at approximately $53.6 billion in 2023 and is expected to expand at a compound annual growth rate (CAGR) of 5.7% from 2024 to 2030. The United States emerged as a leading market for dietary supplements in the North America region owing to the higher spending capacity of the consumers. Increasing spending on healthcare products, the rising geriatric population, rising interest in preventive healthcare, and growing interest in attaining wellness through diet are expected to augment market growth over the forecast period. We expect that a growing number of fitness centers, health clubs and gymnasiums coupled with growing awareness about fitness among younger generations will increase the demand for energy and weight management. Increasing acceptance of sports as a career is expected to increase the demand for sports nutrition, which we expect will benefit the market for dietary supplements.

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According to Grand View Research, the global prenatal vitamin supplement market was valued at USD 542.8 million in 2023 and is projected to grow at a CAGR of 8.5% from 2024 to 2030. Increasing awareness about healthy eating habits and proper medication among pregnant women is the major factor driving the market. The overweight and sedentary lifestyle of pregnant women increases the deficiency of minerals and vitamins. In addition, malnutrition in infants, increasing incidence of other congenital disabilities, and increasing awareness about the benefits of prenatal supplements are some of the factors driving the market. The U.S. prenatal vitamin supplements market was identified as a lucrative region in 2023. Strong endorsements and guidelines from healthcare providers such as the CDC and ACOG bolster confidence in the efficacy and necessity of prenatal vitamins among expectant mothers, driving widespread adoption and market growth in the U.S. According to the American College of Obstetricians and Gynecologists (ACOG), during pregnancy, essential nutrients such as iron, folic acid, choline, calcium, omega-3 fatty acids, vitamin D, B vitamins, and vitamin C are crucial for fetal development and maternal health. A balanced diet rich in sources such as leafy greens, dairy, lean meats, fortified foods, and a prenatal vitamin containing folic acid ensures adequate intake to support both mother and baby's needs.

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According to Grand View Research, the global CBD consumer health market was valued at USD $19.5B in 2023 and is anticipated to grow at a CAGR of 18.1% during the forecast period. The leading factor attributed to the growth is the positive government reforms for the legalization of CBD in various regions. CBD consumer products are gaining significant acceptance due to the rising awareness of their health benefits. Furthermore, the demand for hemp-derived CBD products is increasing globally due to the legalization of hemp in various countries. These statements have not been reviewed and/or approved by the FDA. The U.S. market value for CBD in 2023 was valued at USD $8.3B, and is expected to grow at a CAGR of 7.6% through 2030.

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We believe that increasing awareness regarding CBD's benefits has influenced buyers to buy CBD products. Because CBD products have a greater profit margin, commercial retailers are now focusing on selling cannabis-based products. Numerous health and wellness retailers, such as Rite Aid, CVS Health, and Walgreens Boots Alliance are now offering CBD-based products. For example, CVS Health decided to offer CBD topicals at its 800 stores and Walgreens Boots Alliance is selling CBD-containing topicals across 1,500 of its stores in the United States. As referenced by Forbes health, there are several benefits for CBD that include offsetting anxiety and depression, treating select epilepsy syndromes, reducing PTSD symptoms, treating opioid addiction, alleviating ALS symptoms, relieving unmanageable pain, easing diabetic complications, protecting against neurological disease, and inhibiting arthritic symptoms. Given the growing cannabidiol (CBD) products market, the U.S. Food and Drug Administration has convened a high-level internal working group to explore potential regulatory pathways for CBD products. On January 26, 2023, the FDA announced that it would not seek to regulate CBD as a dietary supplement. Rather, after careful review, the FDA has concluded that a new regulatory pathway for CBD is needed that balances individuals' desire for access to CBD products with the regulatory oversight needed to manage risks. The agency is prepared to work with Congress on this matter<sup>10</sup>. With FDA's lack of regulating CBD products, numerous states have authorized hemp-derived extract (CBD and other cannabinoids) products and affirmatively regulate their consumer safety. Meanwhile, FDA's enforcement priorities focus directly on disease claims and intoxicating products appealing to children. As discussed above, we make sure that our products and marketing collateral neither make disease claims or appeal to youth<sup>11</sup>. FDA still has not issued any regulations regarding CBD. The agency is awaiting direction from Congress.

FDA has approved Epidiolex, which contains a purified form of the drug substance cannabidiol (CBD) for the treatment of seizure associated with Lennox-Gastaut syndrome or Dravet syndrome in patients 2 years of age and older. That means the FDA has concluded that this particular drug product is safe and effective for its intended use.

The FDA has also approved Marinl and Syndros for therapeutic uses in the United States, including for nausea associated with cancer chemotherapy and for the treatment of anorexia associated with weight loss in AIDS patients. Mariol and Syndros include the active ingredient dronabinol, a synthetic delta-9-tetrahydrocannabinol (THC) which is considered the psychoactive intoxicating component of cannabis (i.e. the component responsible for the ''high'' people may experience from using cannabis). Another FDA-approved drug, Cesamet, contains the active ingredient nabilone, which has a chemical structure to THC and is synthetically derived. Cesamet, like dronabinol-containing products, is indicated for nausea associated with cancer chemotherapy.

According to Grand View Research, CBD derived from hemp is anticipated to witness rapid growth owing to the increasing demand from the pharmaceutical sector and rising awareness among consumers regarding health. Increasing consumer disposable income along with the legalization of medicinal cannabis is anticipated to have a positive impact on the demand for CBD in the pharmaceutical sector. Oils, tinctures, concentrates, capsules, topical solutions such as salves, lip balms, lotions and edibles such as baked goods, coffee, chocolates, gums and candies are some of the CBD products that are in high demand.

**Competitive Strengths**

Our competitive strengths lie in the fact that the Kirkman brand has been in business for over 70 years with a loyal consumer base and we believe that we maintain high purity and quality standards in the industry. We source all materials from high quality suppliers. We test our finished goods in certified laboratories with state-of-the-art equipment and manufacture our supplements in our US-based cGMP certified and FDA registered facility located in Lake Oswego, Oregon. Our formulations use proprietary blends. Although we are authorized to produce hemp derived products because we hold a hemp handler's license, we currently do not grow any hemp. Instead, we source our hemp derived products from registered growers in operation. Our products are not FDA approved and they do not require a prescription; all our products are sold over the counter. The FDA does not require any testing on dietary supplements; however, we test for approximately 90 metals and toxins in raw materials.

**Growth Strategy**

We aim to be a leader in the nutraceutical space by manufacturing products held to the highest standard of quality in terms of toxins, metals, and other impurities. Our goal is to build a well-rounded portfolio of products including regular as well as mushroom-based supplements targeted for everyday use, prenatal, athletes and beyond.

We plan to do this by using the net proceeds from the Offering in the following manner. Net proceeds are defined after deducting the estimated underwriter discounts and commissions and offering expenses payable by us, we expect to invest the net process of approximately $5,801,250.

● Approximately 13% of net proceeds (approximately $750,000) for Go-Public Attorney / Partner Fees

● Approximately 7% of net proceeds (approximately $350,000) for market awareness marketing

● Approximately 42% of the net proceeds (approximately $2.4 million) for a deferred payment in connection with the Kirkman acquisition which has a maturity date of January 1, 2025. The payment is comprised solely of principal, since there is currently a $20,000 monthly interest payment payable; and

● Approximately 39% of net proceeds (approximately $2,300,000) for sales, marketing and working capital

*Why do people on the spectrum need supplements?*

Some on the spectrum are restrictive in what they will eat, preferring certain textures or colors over others. This can lead to vitamin and mineral deficiencies since they aren't eating a wide variety of food types.

<sup>10</sup> www.forbes.com/health/body/cbd-oil-benefits/

<sup>11</sup> Source: www.FDA.gov

According to Grand View Research, there is evidence that people with autism may not absorb or metabolize nutrients in the way that persons without autism absorb or metabolize nutrients. This could mean that even if persons with autism are consuming the nutrients they need, their body cannot utilize them effectively.

**Technology& Intellectual Property**

On December 10, 2020, we were granted a licensing agreement from Hemptown Organics Corp. The licensing agreement, dated December 10, 2020, provides Functional Brands Inc. as licensee, a license to use the Hemptown USA and Hemptown Naturals brands and trademarks on a perpetual, non-exclusive, non-transferable basis, with no expiry date. This licensing agreement will be transferred to full ownership to Functional Brands upon the completion of the Offering, at which time HOC will dividend out the majority of the Company's shares currently held by HOC.

The following is a list of our current trademark registrations:

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**Marketing**

We market our products through various sales channels, primarily trade shows and through print and digital advertisements, focusing on several customer types. These customers include consumers, wholesalers, distributors, and those seeking private label products. We repeatedly test new marketing venues, platforms and approaches and measure results to improve the cost-effectiveness of our efforts.

*Trade Shows*

We participate in a variety of trade shows each year with differing attendee focuses. These include health and wellness shows, Autism conferences, OBGYN conferences, convenience and grocery stores, consumer product distribution, and private labels.

*Digital and Printed Advertisements*

 

We utilize sophisticated digital tools to place ads primarily through Google and Facebook (now Meta) that target potential customers and those showing interest in our products. In addition, we have recently begun to place traditional print ads in journals and magazines focused on convenience stores, distributors, and private label products.

In addition to new prospect acquisition programs, our marketing team produces newsletters that are distributed to our contacts with the goal of keeping our company top-of-mind, and this newsletter has historically resulted in conversion of contacts into current customers.

**Customers and Markets**

We sell our Kirkman branded supplements to 45 countries through international distributors that have partnered with the Kirkman brand for two decades. We have recurring consumers that purchase Kirkman brand products via our website at www.kirkmangroup.com, as well as through Amazon. Our core B2B customers are iHerb, Emerson and FullScript. We also have several hundred direct customers, classified as professionals, where we sell our supplements. These customers include doctors, chiropractors, and practitioners who sell our products to their patients. In addition, we plan to focus our commercial efforts for P2i by Kirkman prenatal to OBGYN's and expectant mothers.

Our hemp related products are sold in the United States. We have several thousand customers on our e-commerce sites. For Hemptown Naturals, we have 3,189 subscribers and 6,355 non-investor emails in our database. For Kirkman, we have 36,762 active emails in our email database. As for our white/private label business, we have twelve customers who use us to manufacture white/private label products for them.

**Competition**

● There are several competitors in the supplement space. Within the Vitamin segment, 66% of vitamins purchased are classified as multivitamins, as indicated by Nielsen Retail Measurement Data. Market leaders in the multi-vitamin segment are 'private label store brands' followed by Nature Made, Centrum, One-A-Day and Nature's Bounty, respectively.

● Minerals remain a steady category, and they include Calcium, Magnesium and Iron as the main mineral categories. Private Label brands, again, lead the way, followed by Nature Made, Caltrate, Citracal and Nature's Bounty.

● Supplement growth outpaces the Vitamin and Minerals categories (Source: Nielsen). The segments within the supplement category include, but are not limited to, Digestive Health, General Health, Heart Health, Energy, and Sleep Aids. The leaders within this space are Nature's Bounty, Nature Made, Emergen-C, Baush+Lomb and Airbourne. 91% of the supplement revenue (Nielsen Homescan Panel Data) is generated within the following four sales channels: Warehouse Club, Grocery, Super Centers and Drug Stores.

● There are several product delivery methods for vitamins, minerals and supplements. These delivery methods could be tablets, capsules, liquids, effervescent tablets, and powders. Kirkman has the ability to produce capsules, tablets, liquids and powders to properly compete with core competitors.

● Within the special needs category, competition includes New Beginnings, Claire Labs, Houston Enzymes and Lifetrients. These companies primarily focus on the dietary sensitivities of their respective consumers.

● Within the Hemp Industry, products include gummies, tinctures, creams/lotions and capsules, Charlotte's Web, cbdMD, Social CBD, Joy Organics, MedTerra produce CBD related products. There is limited market share data due to the fact that the majority of product sales occur online.

**Facilities**

We lease a 24,000 square foot facility located in Lake Oswego, OR. This facility houses our manufacturing operation, warehouse, back-end offices and fulfillment center. Although we are authorized to produce hemp derived products because we hold a hemp handler's license, we currently do not grow any hemp, instead, we source our hemp derived products from registered growers in operation.

**Employees**

As of the date of this prospectus, we have 32 full-time employees and 1 part-time employee, and we consider our employee relations to be good. Our human capital resource objectives are designed to attract, and retain, highly motivated and well-qualified employees. We have worked diligently to provide a flexible and safe work environment. The health and safety of our employees and clientele is of the upmost importance to us.

**Legal Proceedings**

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

On May 25, 2021, True Health Medical Center, S.C. ("True Health") amended an existing complaint against Kirkman Group, Inc. ("Kirkman"), James Hall and David Humphries to assert claims against HTO Nevada, Inc. and HTO Holdings, Inc. (collectively, HTO Nevada, Inc. and HTO Holdings, Inc. are referred to as the "HTO Parties"). Kirkman is the seller of certain assets to the HTO Parties and is a separate legal entity. Affiliates of the HTO Parties were first named in the lawsuit on September 23, 2020. The case is pending in the Circuit Court for the Eighteenth Judicial Circuit, DuPage County, Illinois. Kirkman had terminated a royalty agreement prior to selling its assets to the HTO Parties but the royalty agreement has a provision that allows True Health to continue to receive royalties after the termination of the agreement. True Health claims that Kirkman underpaid the royalties due to True Health prior to the sale of assets to the HTO Parties. There is no dispute that Kirkman stopped paying royalties to True Health around the time it terminated the agreement and that the HTO Parties have never paid royalties to True Health. True Health contends that as the purchaser of certain Kirkman assets, the HTO Parties should be bound by the terms of the royalty agreement. There is no certain amount at this time in connection with the alleged in the damages claim against the HTO Parties. It is not possible to predict the outcome of this proceeding at this time. To date, the parties have engaged in some discovery including a limited number of depositions. True Health has filed a motion for summary judgment that addresses its claims against Kirkman, but does not address any claim against the HTO Parties. Briefing is not yet complete on the summary judgment motion and a ruling is likely more than 60 days away. Regardless of how the court rules on summary judgment, there will be remaining claims in the case and it is likely that additional discovery will be conducted. No trial date has been scheduled at this time.

**Regulation**

***Trade Regulations***

Our suppliers generally source or manufacture finished goods in parts of the world that may be affected by the imposition of duties, tariffs or other import regulations by the United States. We believe that our redundant network of suppliers provides sufficient capacity to mitigate any dependency risks on a single supplier.

We buy necessary components or ingredients for our products from suppliers or factories both domestically and internationally. We do not depend on any single supplier. However, if we are unable to continue to obtain our finished products from international locations or if our suppliers are unable to source raw materials, it could significantly disrupt our business. Further, we are affected by economic, political and other conditions in the United States and internationally, including those resulting in the imposition or increase of import duties, tariffs and other import regulations and widespread health emergencies, which could have a material adverse effect on our business.

***Laws and Regulations Relating to Our Products***

***Nutraceutical***

 ****

The dietary supplement industry is regulated on a federal level in the U.S. by the Food and Drug Administration ("FDA") and the Federal Trade Commission ("FTC") as well as by government agencies in each of the 50 states. FDA regulates both finished dietary supplement products and dietary ingredients. FDA regulates dietary supplements under a different set of regulations than those covering "conventional" foods and drug products. Under the Dietary Supplement Health and Education Act of 1994 (DSHEA):

Manufacturers and distributors of dietary supplements and dietary ingredients are prohibited from marketing products that are adulterated or misbranded. That means that these firms are responsible for evaluating the safety and labeling of their products before marketing to ensure that they meet all the requirements of the Federal Food, Drug, and Cosmetic Act as amended by DSHEA and FDA regulations. The FDA has the authority to take action against any adulterated or misbranded dietary supplement product after it reaches the market. Most dietary supplement manufacturing, labeling and marketing is covered by extensive regulations issued and enforced by the FDA and the FTC. The FDA has regulatory authority under the Federal Food, Drug and Cosmetic Act as amended in 1994 by the Dietary Supplement Health and Education Act (DSHEA) and in 2006 by the Dietary Supplement and Nonprescription Drug Consumer Protection Act. Under the DSHEA, dietary supplements are regulated as a category of food. The FDA regulates both finished dietary supplement products and dietary ingredients. By law, it is illegal to manufacture or market dietary supplement products that are adulterated or misbranded, and the FDA has regulatory authority to remove such products from the marketplace.

Key Regulations

Responsible companies in the dietary supplement industry abide by extensive regulations that cover manufacturing, labeling, quality control, safety, post-market surveillance and more.

**New Dietary Ingredient Notifications**

The Food Drug & Cosmetic Act, as amended by the Dietary Supplement Health and Education Act (DSHEA), established that dietary supplements that were in commerce prior to 1994 have a history of safe use, and therefore, can remain on the market without additional safety review. All new ingredients marketed after that date, however, must submit a formal 75-day notice along with evidence that the product is reasonably expected to be safe. This is referred to as a new dietary ingredient (NDI) notification. If the FDA has concerns about the ingredient or its safety profile, the agency has clear authority to request more information or to reject the notification and deny the product's entry into the market.

**Dietary Supplement Labeling Requirements**

The following are the minimum labeling requirements:

&nbsp;&nbsp;&nbsp;&nbsp;1. **Statement of Identity** 

The statement must include the product name and identify itself as a dietary supplement. Although you may replace the term dietary with the type of ingredients that are in the product, having one of them on the product label is a mandatory requirement. The product must be labeled either as conventional foods and beverages or dietary supplement based on its actuals.

&nbsp;&nbsp;&nbsp;&nbsp;2. **Net Quantity of Contents** 

The net quantity of content informs consumers of the amount of dietary supplement that is in the container or package. The net quantity of content must be located on the product label as a distinct item in the bottom 30 percent of the principal display panel in lines generally parallel to the base of the container.

&nbsp;&nbsp;&nbsp;&nbsp;3. **Supplements Chart** 

The supplement facts must contain the list of names and quantities of dietary ingredients present in the product's serving size and servings per container.

&nbsp;&nbsp;&nbsp;&nbsp;4. **Ingredients List** 

The list of ingredients must be displayed in descending order of predominance by weight. If all source ingredients are listed in the supplement facts panel, and there are no other ingredients, such as excipients or fillers, an ingredient statement is not needed.

&nbsp;&nbsp;&nbsp;&nbsp;5. **Other Details** 

Other details required include manufacturer, packer, or distributor name and address, and domestic U.S. mail address and phone number to which a consumer can report a serious adverse event. If an adverse event is reported, the company must notify the FDA.

*Hemp and marijuana regulatory regimes in each state where we sell hemp derived products.*

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **State** | **D9<br> Ingestibles** | **Legislative and Enforcement Notes** | **Registration/<br> License <br> Required** | **CBD /<br> CBG<br> Ingestibles** | **Notes <br> (THC <br> caps)** | **CBD /<br> CBG<br> Inhalables** | **Inhalables<br> prohibited?** |
| \*Alabama |  | 23 Leg session: SB 66 enacted limits psychoactive cannabinoid products to 21+; attempt by DPH to stop CBD sales challenged in court: TRO issued against DPH; SB 255 (2019) authorized hemp farming, including its derivatives and extracts, with less than 0.3% D9 on a dry weight basis; products not affirmatively authorized. Products must be less than 0.3% D9 | No |  | All states in this column that HT is selling into are OK but must meet THC cap, if applicable |  | No |
| \*Arizona |  | 24 Leg session: SB 1401 would have criminalized D8, etc. as a dangerous drug but it DIED in committee; 23 Leg Session: SB 1271 would have authorized the manufacturing of hemp-derived products, license required but it stalled in the House; SB 1098 (2018) authorized hemp farming with less than 0.3% D9 | No |  |  |  | No |
| \*Arkansas |  | HB 1640 (2021) authorized hemp/farming, including its derivatives and extracts, with less than 0.3% THC (all THCs) | No |  |  |  | No |
| \*California |  | 24 Leg Session: AB 2223 would cap THC at .25mg/1mg per serving/product (PASSAGE LIKELY); AB 45 (2021) authorized hemp manufacturing; 0.3% THC limit applies to final form extract ingredient, not final form product; otherwise, must be sold in cannabis retail | Yes, Extract and Product Manufacturer License; out-of-state extract manufacturer only |  |  |  | Yes, until a tax is adopted. |

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|:---|:---|:---|:---|:---|
| Colorado | 23 Leg Session: SB 23-271 caps total THC at 1.75 mg/serging and 5 serving/product | Yes | Total THC cap: 1.75 mg/serving & 5 mg/product | No |
| \*Connecticut | 24 Leg Session: HB 5150 ENACTED total THC limit: 1mg/serving and 5mg/product for edible products; 25mg/product for vape products; and 0.3% for flower; 23 Leg Update: HB 6699 enacted Caps total THC at 1mg/serving and 5mg/product; up to 25mg/product for tinctures/concentrates; D8/D9/HHC/THC-O included in total THC 0.3% limit for hemp products; otherwise must be sold in marijuana retail. SB 1201 (2021) separated hemp from marijuana and defined it the same as the federal act (less than 0.3% D9 including extracts/derivatives); D8/D9/HHC/THC-O included in total THC so \*\*all THCs considered in hemp products. | No | Total THC Cap: 1mg/serving & 5mg/product for edible products; 25mg/product for vape products; and 0.3% for flower | No |
| \*Delaware | 23 Leg session: HB 1 enacted relating to MJ possession for 21+, wholly removed hemp from MJ definition. This arguably authorizes possession of D9 etc. products. Title 3, Chapter 28 authorized hemp farming/research with less than 0.3% D9; flower derivatives and extracts not specifically authorized | No |  | No |

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| | | | | |
|:---|:---|:---|:---|:---|
| \*Florida | 24 Leg Session: AB 1698 would have included THCa in D9 count and cap D9 at 5mg/50mg per serving/product (GOV VETOED); 23 Leg Session: SB 1676 enacted and regulates hemp extract products under 0.3% D9, including D8, etc. limited to 21+; HB 333 (2019) authorized hemp/farming/products, including its derivatives and extracts, with less than 0.3% D9 on a dry weight basis; food establishment permit required for all products sold in state including inhalable products. Labeling/packaging requirements | Yes, Food Establishment Permit if presence in state beyond online sales |  | No |
| \*Georgia | 24 Leg Session: SB 494 (ENACTED) prohibits food infused w/THC/CBD - gummies excluded; now Total D9 THC/THCa standard (0.3% total D9 THC/THCa) for hemp products; HB 1127/SB 437/SB 350 would have limited all consumable hemp products to 21+ (DEAD); 23 Leg Session: SB 22 would have limited all hemp products to 18+ but stalled before the Legislature adjourned; HB 213 (2019) authorized hemp/farming/products, including its derivatives and extracts, with the federally defined THC (D9) level | No |  | Yes |
| Hawaii | 24 Leg Session HB 1424/SB516 would have invoked state protectionism in labels; and HB 2449/SB 3138 would have allowed hemp in food/bev (ALL DEAD); HB 2689 (2020) authorized hemp products with less than 0.3% D9, however, State code §328G-3 prohibits adding cannabinoids as an ingredient to foods and inhalable products | No |  | Yes |
| Idaho | State's CSA prohibits hemp products with any THC. The only CBD allowed is 0.00% Isolate products | No | 0 THC state | Yes |

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| | | | |
|:---|:---|:---|:---|
| \*Illinois | 24 Leg Session: HB 5306/SB 3790 would have limited all consumable hemp products to 21+; SB 3926 would have limited all hemp products to 0.5mg THC (ALL DEAD); Chicago Ordinance 4215 would cap D9 products at .5mg/serving / 2.5mg/product; SB 2298 (2018) authorized hemp farming/products with less than 0.3% D9. | No | No |
| \*Indiana | SEA 516 (2019) authorized hemp products with less than 0.3% D9. | No | Yes |
| \*Iowa | 24 Leg Session: HF 2605 (ENACTED) caps Total THC at 4mg/serving 10/mg/product; SF 2417 would have imposed 25% tax on hemp products in bars/restaurants (DEAD); Iowa Administrative Code 481, Chapter 32 (2021) requires a consumable hemp product registration for retailers (in store/online) and must be less than 0.3% total THC | Yes, Retailer registration | Yes |
| \*Kansas | SB 263 (2018) authorized hemp research farming with less than 0.3% D9; no specific product authorization, but, state statute 2-3908 prohibits extracts with D9 greater than 0.3% and also references federal law (FDA); from AG Opinion: "Thus, we conclude that the limit of 0.3% applies to the total amount of all tetrahydrocannabinols in a final hemp product, including Delta-8, Delta-9, and all other tetrahydrocannabinols." | No | No |

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| | | | | |
|:---|:---|:---|:---|:---|
| \*Kentucky | 23 Leg Session: HB 544 enacted and the state will strictly regulate intoxicating products and limit them to 21+; regulations in process; State law authorizes hemp products with less than 0.3% D9 | No |  | Flower prohibited/vapes OK |
| \*Louisiana | 24 Leg Session: SB 237 would have limited consumable hemp products to 0.0% THC; SB 495 would have prohibited out of state products (BOTH DEAD); HB 491 (2019 – Hemp Farming Act) 0.3% THC limit applies to D9 only. HB 491 (2019) authorized hemp, including extracts and derivatives, with D9 less than 0.3%; products must be approved by the state (RS 3-1483) and wholesalers are required to obtain a permit | Yes, Product registration and hemp vendor license |  | No |
| Maine | HP 459/LD 630 (2019) fully authorized hemp products with less than 0.3% D9 | No |  | No |
| Maryland | 24 Leg Session: SB 1109 would have restricted who can sell intoxicating hemp products (DEAD); 23 Update: Consumable and inhalable products with more than 0.5mg total THC/serving and 2.5mg THC/product are cannabis/MJ; tinctures OK w/less than 2.5mg total THC/serving and 100mg THC/product; HB 698 (2018) authorized hemp pilot program with less than 0.3% D9, flower derivatives and extracts not specifically authorized | No | Consumable and inhalable products with more than 0.5mg total THC/serving and 2.5mg THC/product are cannabis/MJ; \*\*tinctures OK w/less than 2.5mg total THC/serving and 100mg THC/product\*\* | No |

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| | | | | |
|:---|:---|:---|:---|:---|
| \*Massachusetts | 24 Update: Department of AG adopted a new policy prohibiting hemp flower and hemp products with any THC other than topicals; '23 Leg Session: H.90 would have regulated hemp products and license in-state manufacturers but stalled before leg. adjournment 8/1 (DEAD); state operates under USDA's state hemp plan program and the federal 0.3% D9 limit; CBD food/dietary supplement product wholesaling prohibited, but retail sales currently not regulated | Not yet |  | Sold in MJ retail only |
| \*Michigan | HB 4517 (2021) authorized hemp products with less than 0.3% THC on a dry weight basis (THC generally, not just D9) | MJ license/Hemp handler-processor license to sell hemp products including smokable flower |  | No |
| \*Minnesota | 24 Leg Session: HF 4629 would have allowed lower potency hemp products (DEAD); 23 Leg session: HF 100 enacted limits D9 to 5 mg and require a retail license. HF 3595 (2022) limits edible hemp products to 5mg/serving and 50mg/package total THC including D8, etc.; sales limited to 21+; RS 18K.02 (2021) authorized hemp, including extracts and derivatives, with<br> less 0.3% D9. | Retailer license | D9 cap: 5 mg/serving & 50 mg/product | No |
| Mississippi | 24 Leg Update: HB 1676 would have capped THC in consumable hemp products at 0.5mg/2.5mg & 20:1 CBD: THC (DEAD); SB 2725 (2020) adopted the federal D9 THC limit, including extracts and derivatives, but consumable hemp products must be "FDA approved". | No |  | No |

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| | | | |
|:---|:---|:---|:---|
| \*Missouri | 24 Leg Update: SB 984 would have moved all intoxicating cannabinoids to MJ retail (all ingestible/consumable products - not smoking) (DEAD); HB 2034 (2018) authorized hemp, including extracts and derivatives, with less 0.3% D9. | No | No |
| \*Montana | HB 701 (2021) kept hemp products with less than 0.3% D9 out of marijuana system and thus allowed, but not affirmatively authorized | No | No |
| Nebraska | 24 Leg Session: LB 999 would have prohibited all cannabinoids other than CBD in hemp products (DEAD); LB 657 (2019) authorized hemp/farming, including its derivatives and extracts, with less than 0.3% D9 on a dry weight basis; products not affirmatively authorized. | No | No |
| \*Nevada | Hemp farming authorized with less than 0.3% total THC; products not affirmatively authorized; SB 49 (2021) clarifies that 0.3% THC limit is total THC, not just D9 | No | No |
| \*New Hampshire | HB 459-FN (2019) limits hemp products to 0.3% D9 THC only. Product registration | Product registration | No |
| \*New Jersey | 24 Leg Session: A3580/S2313 would limit all hemp products w/any THC to 21+; S3235 would push all hemp products over 2.5mg total THC to MJ (ON GUV'S DESK); AB 5322 (2020) limits hemp products to 0.3% D9 THC only. Dept of Ag license for selling hemp products may be required. | Dept of Ag. license may be required for sales | No |
| \*New Mexico | HB 581(2019) limits hemp products to 0.3% D9 THC only | No | No |

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| | | | | |
|:---|:---|:---|:---|:---|
| \*New York | 24 Les Session: A09047/S8463 would have re-legalized synthetic hemp THC in MJ retail (DEAD); S3235 would have allowed up to 5mg THC in hemp beverages (DEAD); 23 update: Cannabis agency enforcement against high THC products imminent along with THC caps; Hemp products authorized in 2020 with less than 0.3% D9; hemp retailer license required for in store/online sales; food/beverage products limited to 25 mg total cannabinoids/product; supplement products have much higher total cannabinoid limits | Manufacturer and Retailer Permit | Cannabis regulatory agency enforcement against high THC hemp products and THC cap imminent | Flower prohibited; oil OK |
| \*North Carolina | 24 Leg Session: H563 would have established THC caps including synthetic THC (DEAD); '23 Leg session: HB 563 would have limited hemp cannabinoid products to 21+ but it appears to have died; SB 455 (2022) permanently authorized hemp products with less than 0.3% D9 only. All hemp derived cannabinoids removed from CSA | No |  | No |
| North Dakota | 24 Update: Adopted administrative rule caps total THC/serving at 1.25mg and 15:1 CBD:THC ratio for "cannabinoid product"; '23 Leg Session: SB 2096 enacted - prohibits all "chemically derived cannabinoids" including Delta 8, 9, etc. - \*\*full/broad spectrum OK with THC limit in an amount to be determined.\*\* HB 1045 authorizes hemp products with less than 0.3% THC (all THCs);<br> products with converted D9 prohibited | No |  | Yes |
| \*Ohio | 24 Leg Session: SB 278 would limit hemp products to 0.3% Total THC and products over 2.5mg/serving limited to 21+; HB 642 would direct depts. to do study re: adult use hemp limits; '23 Leg Session: A replacement of SB 9 would have prohibited any amount of D8/9/10 in hemp products. SB 57 (2019) limits hemp products to 0.3% D9 THC only (DIED) | No |  | No |

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| | | | |
|:---|:---|:---|:---|
| \*Oklahoma | 23 Leg Session: SB 365 would have required registration of hemp cannabinoid products but it died before adjournment. SB 238 (2019) authorized hemp products with less than 0.3% D9 | Not yet | No |
| Oregon | HB 3000 (2021) and OLCC have limited hemp products to 0.5mg THC/product; otherwise it must be sold in MJ retail | MJ license if exceed 0.5mg THC/product | Sold in MJ retail only |
| \*Pennsylvania | HB 967 (2016) authorized hemp farming with less than 0.3% total THC; products not affirmatively authorized | No | No |
| \*Rhode Island | Hemp-derived products with less than 0.3% D9 are authorized; retail license required | Yes, retailer license | No |
| \*South Carolina | 24 Leg Session: H4628 would have limited all hemp-derived cannabinoid products to 21+, excluding CBD, CBN, CBG, etc. (DEAD); Hemp products with less than 0.3% D9 are authorized as the state follows federal definition (HB 3449) | No | No |
| \*South Dakota | 24 Leg Session: HB1125 enacted prohibits synthetic/converted cannabinoids; HB 1292 (signed into law March '22) limits intoxicating product sales to 21 and over. HB 1008 (2020) authorized hemp products with less than 0.3% D9 | No | Yes |
| \*Tennessee | 24 Leg Session: Department regulations finalized on 7/2/24 adopt a total THC standard; '23 leg session: HB 403 enacted and limits any product w/non-Delta-9 THC to 21+; license required; SB 357 (2019) authorized hemp products with less than 0.3% D9; Smoking limited to 21+ | Not for D9 products | No, but 21+ only |

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| | | | | |
|:---|:---|:---|:---|:---|
| \*Texas | 23 Leg session: HB 4918 would have reversed in-state smokable hemp ban but died; HB 1325 (2019) authorized hemp products with less than 0.3% D9; Sup Ct. in June 22 upheld manufacturing smokable hemp ban | Consumable hemp product license |  | No |
| Utah | 23 leg session: HB 227 enacted and limits any product with THC to 21+; HB 58 (2016) and HB 3001 (2018) authorized hemp extract products with less than 0.3% THC (all THCs) and with at least 5% CBD by weight. HB 385 (2022) requires product class and cannabinoid product registration with the state. Smokable flower prohibited - vape products not identified. Attempting to register vape product will ferret out whether state agrees that smokable prohibition applies only to flower. | Retailer permit; Product class or cannabinoid product registration |  | Yes, but possibly not vapes |
| Vermont | 23 Leg Session: Cannabis Control Board issued emergency rule prohibiting synthetic THCs and limits hemp products to 1.5mg of THC per serving, or 10mg of THC per package (unless the product has at least 20:1 CBD-to-THC. State hemp rules adopt federal D9 limits for hemp products; however, all synthetically derived/converted THCs are prohibited (2020). | No | 1.5 mg/serving & 10 mg/product | No |
| Virginia | 24 Leg Session: \*\*SB 582 (ENACTED) limits inhaled products to 21+; SB 448 would have improved regulatory environment (lower tax) while HB 1509 would further restrict hemp businesses; Cap of 2.5mg THC/product or a 25:1 CBD:THC ratio | Yes, Retailer registration | 2.5mg THC/product or a 25:1 CBD:THC ratio | No |
| Washington | 23 leg session: SB 5367 enacted prohibits any detectable THC in hemp products. | No | 0 THC state | No |
| \*West Virginia | 24 Leg Session: SB 679 limits hemp cannabinoid products to 21+ and sales require business reg. certificate; '23 Leg Session: SB 220 enacted limits D9, D8, etc. products to 21+ and requires permit. HB 2694 (2019) Authorized hemp products with less than 0.3% THC (all THCs). Inhalable hemp products must be approved by the Commissioner. | Yes, permit |  | No, but must be approved |
| \*Wisconsin | Statute 94.55 authorizes hemp products with less than 0.3% D9. Products must be sold by a licensed retailer and meet strict packaging rules including flower. | Retailer license |  | No |
| \*Wyoming | 23 leg session: HB 108 enacted limits any edible or vaping product with any THC to 18+; HB 0171 (2019) authorized hemp products with less than 0.3% D9. Attempt to limit inhalable sales to 21+ failed. |  |  | No, but 18+ only |

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\* *asterisk* = we sell product in this state

**Good Manufacturing Practices**

Good manufacturing practices ("GMPs") for dietary supplements are specific rules for the manufacturing processes of vitamins, minerals, herbs and botanicals, amino acids and all other supplements. Finalized in 2007, these rigorous practices impose higher standards on dietary supplements than food GMPs applied to conventional foods. Dietary supplement GMPs include thorough requirements for identity testing for all ingredients as they arrive at the manufacturer's site. Manufacturers must qualify their suppliers before receiving goods, incoming ingredients must be quarantined until their identity is confirmed using scientifically valid methods of analysis, and all components of dietary supplements must meet specifications established by the manufacturer regardless of where the ingredient was sourced.

Manufacturers are accountable to the FDA for the manufacturing process as well as the ingredients. During an inspection, the FDA has access to all the manufacturers' records, including access to the country of origin of all supplement ingredients. The existing bioterrorism law already requires all parties in the production and distribution of dietary ingredients to keep records of suppliers and customers ("one up and one down") that permit the agency to trace the pedigree of ingredients back to their original source. In addition, the GMP rules examine sanitation, batch records for production, employee training, validation of the manufacturing procedures, and testing final products for conformance with the label.

**Adverse Event Reporting**

In 2006, Congress passed The Dietary Supplement and Nonprescription Drug Consumer Protection Act, commonly referred to as the "adverse event reporting law." The passage of this law was strongly supported by CRN and others in the industry as it provides an important regulatory tool for the FDA to protect consumers. Under this law, dietary supplement companies are required to report serious adverse events to the FDA no later than 15 business days after the company receives the report.

This post-market surveillance program alerts the FDA to possible signals or potential patterns of a problem, enabling the agency to identify concerns with ingredient safety, manufacturing issues, contamination (of either raw ingredients or finished products), tampering, and even bioterrorism. However, adverse events do not demonstrate a causal relationship between the product and the event.

Since the law went into effect, the dietary supplement industry's track record demonstrates a strong safety profile for the industry's products both in comparison to other FDA-regulated industries and considering that more than 170 million Americans take dietary supplements. In 2016, the FDA announced it would make data from the FDA Adverse Event Reporting System (FAERS) public.

**Additional Safety Protections**

Once a dietary supplement enters the stream of commerce, the FDA may remove a product if it is "adulterated" or "misbranded." A product is considered adulterated if it contains unlisted ingredients or is not prepared or packaged under good manufacturing conditions. It is misbranded if its labeling is false or misleading. In either case, the agency has enforcement authority to seize and destroy the product, impose fines or even imprisonment. In addition, the FDA can remove a product from the market if it "presents a significant or unreasonable risk of illness or injury" under conditions of use recommended in its labeling. A separate provision gives the FDA authority to declare a product "an imminent hazard to public health or safety." In less dramatic situations, the FDA can request manufacturers to modify products and claims or to provide warnings to consumers. The Food Safety & Modernization Act, signed into law in 2011, gave the FDA additional authority to issue a mandatory recall when a company fails to voluntarily recall an unsafe food (including dietary supplements) after being asked to by the FDA.

**Food Safety Regulations**

**Title 21 Code of Federal Regulations, Part 111: Current Good Manufacturing Practice in Manufacturing, Packaging, Labeling, or Holding Operations for Dietary Supplements**

This regulation applies to manufacturers, packagers, labelers, or holders and includes importers as well. The manufacturing facilities of certain types of human food including dietary supplements are required to have a production and process control system in place.

 ****

***Hemp***

The production, distribution and sale in the United States of many of our products are subject to the Federal Food, Drug, and Cosmetic Act, the Federal Trade Commission Act, the Lanham Act, state consumer protection laws, competition laws, federal, state and local workplace health and safety laws, various federal, state and local environmental protection laws, various other federal, state and local statutes applicable to the production, transportation, sale, safety, advertising, labeling and ingredients of such products, and rules and regulations adopted pursuant to these laws. Outside the United States, the distribution and sale of our many products and related operations are also subject to numerous similar and other statutes and regulations. We only sell our hemp derived products to states which permit this activity with certain restrictions such as the content of THC which differs depending on the state.

On December 20, 2018, the Agricultural Improvement Act of 2018, which is also known as the "2018 Farm Bill," was enacted and, among other things, further legalized hemp under U.S. federal law, but with compliance still being required with all applicable state hemp laws. The 2018 Farm Bill includes certain benefits for the hemp industry in the United States, including: (i) the extension of the protections for hemp research and researchers and the conditions in which hemp research can be done, (ii) the protection of hemp farmers and hemp production under federal crop insurance programs, (iii) the permitting of the cultivation, interstate transportation and sale of hemp and hemp products in the U.S. in compliance with all other applicable federal and state laws, and (iv) the removal of hemp and hemp derived products from Schedule 1 of the Controlled Substances Act ("CSA").

As of August 1, 2024, all 50 states and the District of Columbia have legalized hemp

Our activities in the United States only involve legal hemp in compliance with the CSA. The hemp and the marijuana plants are both part of the same *cannabis* genus, except that hemp does not have more than 0.3% dry weight content of tetrahydrocannabinol ("THC"). While 2018 Farm Bill legalized hemp and cannabinoids extracted from hemp in the United States, such extracts remain subject to state laws and regulation by other U.S. federal agencies such as the FDA, U.S. Drug Enforcement Administration ("DEA"), and the U.S. Department of Agriculture ("USDA"). The same plant, with a higher THC content is marijuana, which is legal under certain state laws, but which is currently not legal under U.S. federal law. The similarities between these plants can cause confusion.

A California law known as Proposition 65 requires a specific warning to appear on any product containing a component listed by the state as having been found to cause cancer or birth defects. The state maintains lists of these substances and periodically adds other substances to these lists. Proposition 65 exposes all food and beverage producers to the possibility of having to provide warnings on their products in California because it does not provide for any generally applicable quantitative threshold below which the presence of a listed substance is exempt from the warning requirement. Consequently, the detection of even a trace amount of a listed substance can subject an affected product to the requirement of a warning label. However, Proposition 65 does not require a warning if the manufacturer of a product can demonstrate that the use of that product exposes consumers to a daily quantity of a listed substance that is:

● below a "safe harbor" threshold that may be established;

● naturally occurring;

● the result of necessary cooking; or

● subject to another applicable exemption.

In January 2019, New York State's governor announced the "Consumer Right to Know Act," a proposed law that would impose similar and potentially more stringent labeling requirements than California Proposition 65. The law has not yet been adopted, and to our knowledge California Proposition 65 remains the most onerous state-level chemical exposure labeling statutory scheme. However, due in part to the large size of California's market, promotional products sold or distributed anywhere in the United States may be subject to California Proposition 65.

We are unable to predict whether a component found in a product that we assisted a client in producing might be added to the California list in the future. Furthermore, we are also unable to predict when or whether the increasing sensitivity of detection methodology may become applicable under this law and related regulations as they currently exist, or as they may be amended.

We are subject to various federal, state and local laws and regulations, including but not limited to, laws and regulations relating to labor and employment, U.S. customs and consumer product safety, including the Consumer Product Safety Improvement Act, or the "CPSIA." The CPSIA created more stringent safety requirements related to lead and phthalates content in children's products. The CPSIA regulates the future manufacture of these items and existing inventories and may cause us to incur losses if we offer for sale or sell any non-compliant items. Failure to comply with the various regulations applicable to us may result in damage to our reputation, civil and criminal liability, fines and penalties and increased cost of regulatory compliance. These current and any future laws and regulations could harm our business, results of operations and financial condition.

Legal requirements apply in various jurisdictions in the United States and overseas requiring deposits or certain taxes or fees be charged for the sale, marketing and use of certain non-refillable beverage containers. The precise requirements imposed by these measures vary. Other types of beverage container-related deposit, recycling, tax and/or product stewardship statutes and regulations also apply in various jurisdictions in the United States and overseas. We anticipate additional, similar legal requirements may be proposed or enacted in the future at local, state and federal levels, both in the United States and elsewhere.

New legislation or regulation, the application of laws from jurisdictions whose laws do not currently apply to our business, or the application of existing laws and regulations to the Internet and e-commerce generally could result in significant additional taxes on our business. Further, we could be subject to fines or other payments for any past failures to comply with these requirements. The continued growth and demand for e-commerce is likely to result in more laws and regulations that impose additional compliance burdens on e-commerce companies.

***Laws and Regulations Relating to Data Privacy***

In the ordinary course of our business, we might collect and store in our internal and external data centers, cloud services and networks sensitive data, including our proprietary business information and that of our customers, suppliers and business collaborators, as well as personal information of our customers and employees. The secure processing, maintenance and transmission of this information is critical to our operations and business strategy. The number and sophistication of attempted attacks and intrusions that companies have experienced from third parties has increased over the past few years. Despite our security measures, it is impossible for us to eliminate this risk.

A number of states in the United States have enacted data privacy and security laws and regulations that govern the collection, use, disclosure, transfer, storage, disposal, and protection of personal information, such as social security numbers, financial information and other sensitive personal information. For example, all 50 states and several U.S. territories now have data breach laws that require timely notification to affected individuals, and at times regulators, credit reporting agencies and other bodies, if a company has experienced the unauthorized access or acquisition of certain personal information. Other state laws, particularly the California Consumer Privacy Act, as amended ("CCPA"), among other things, contain disclosure obligations for businesses that collect personal information about residents in their state and afford those individuals new rights relating to their personal information that may affect our ability to collect and/or use personal information. The Virginia Consumer Data Protection Act ("CDPA") also establishes rights for Virginia consumers to control how companies use individuals' personal data. The CDPA dictates how companies must protect personal data in their possession and respond to consumers exercising their rights, as prescribed by the law, regarding such personal data. The CDPA went into effect on January 1, 2023. Further, the California Privacy Rights Act (CPRA) was recently voted into law by California residents. The CPRA significantly amends the CCPA and imposes additional data protection obligations on covered companies doing business in California, including additional consumer rights processes and opt outs for certain uses of sensitive data. It also creates a new California data protection agency specifically tasked to enforce the law, which would likely result in increased regulatory scrutiny of California businesses in the areas of data protection and security. The substantive requirements for businesses subject to the CPRA went into effect on January 1, 2023, and became enforceable on July 1, 2023. Meanwhile, several other states and the federal government have considered or are considering privacy laws like the CCPA. We will continue to monitor and assess the impact of these laws, which may impose substantial penalties for violations, impose significant costs for investigations and compliance, allow private class-action litigation and carry significant potential liability for our business.

Outside of the United States, data protection laws, including the EU General Data Protection Regulation (the "GDPR"), also might apply to some of our operations or business collaborators. Legal requirements in these countries relating to the collection, storage, processing and transfer of personal data/information continue to evolve. The GDPR imposes, among other things, data protection requirements that include strict obligations and restrictions on the ability to collect, analyze and transfer personal data/information of persons located in the European Union (EU), a requirement for prompt notice of data breaches to data subjects and supervisory authorities in certain circumstances, and possible substantial fines for any violations (including possible fines for certain violations of up to the greater of €20 million or 4% of total company revenue). Other governmental authorities around the world have enacted or are considering similar types of legislative and regulatory proposals concerning data protection.

The interpretation and enforcement of the laws and regulations described above are uncertain and subject to change, and may require substantial costs to monitor and implement and maintain adequate compliance programs. Failure to comply with United States and international data protection laws and regulations could result in government enforcement actions (which could include substantial civil and/or criminal penalties), private litigation and/or adverse publicity and could negatively affect our operating results and business.

***Environmental Regulations***

We use certain plastic, glass, fabric, metal and other products in our business which may be harmful if released into the environment. In view of the nature of our business, compliance with federal, state, and local laws regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, has had no material effect upon our operations or earnings, and we do not expect it to have a material impact in the foreseeable future.

***Tax Laws and Regulations***

Changes in tax laws or regulations in the jurisdictions in which we do business, including the United States, or changes in how the tax laws are interpreted, could further impact our effective tax rate, further restrict our ability to repatriate undistributed offshore earnings, or impose new restrictions, costs or prohibitions on our current practices and reduce our net income and adversely affect our cash flows.

We are also subject to tax audits in the United States and other jurisdictions and our tax positions may be challenged by tax authorities. Although we believe that our current tax provisions are reasonable and appropriate, there can be no assurance that these items will be settled for the amounts accrued, that additional tax exposures will not be identified in the future or that additional tax reserves will not be necessary for any such exposures. Any increase in the amount of taxation incurred as a result of challenges to our tax filing positions could result in a material adverse effect on our business, results of operations and financial condition.

***Other Regulations***

We are subject to international, federal, national, regional, state, local and other laws and regulations affecting our business, including those promulgated under the Occupational Safety and Health Act, the Consumer Product Safety Act, the Flammable Fabrics Act, the Textile Fiber Product Identification Act, the rules and regulations of the Consumer Products Safety Commission, the Food, Drug, and Cosmetic Act, the Foreign Corrupt Practices Act of 1977 (FCPA), various securities laws and regulations including but not limited to the Securities Exchange Act of 1934, as amended, the Securities Exchange Act of 1933, as amended, and the NASDAQ Rules, various labor, workplace and related laws, and environmental laws and regulations. Failure to comply with such laws and regulations may expose us to potential liability and have an adverse effect on our results of operations.

**MANAGEMENT**

**Directors and Executive Officers**

Set forth below is information regarding our directors and executive officers as of the date of this prospectus.

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| | | |
|:---|:---|:---|
| **Name** | **Age** | **Position** |
| Eric Gripentrog | 57 | Chief Executive Officer and Director |
| Tariq Rahim | 38 | Chief Financial Officer, Principal Accounting Officer and Director |
| Lourdes Felix <sup>(1)</sup> | 57 | Nominee Director |
| Steven Rossi<sup>(1)</sup> | 39 | Nominee Director |
| Girard Smith<sup>(1)</sup> | 63 | Nominee Director |

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(1) Nominee
 director whose tenure shall be effective and commence immediately on the date in which this
 registration statement is declared effective by the SEC.

***Business Experience***

 

The following is a brief overview of the education and business experience of each of our directors, executive officers and director nominees during at least the past five years, including their principal occupations or employment during the period, the name and principal business of the organization by which they were employed.

**Eric Gripentrog, *Chief Executive Officer and Director***

Mr. Gripentrog combines over 30 years of experience in the Consumer-Packaged Goods industry ("CPG"). Previously, he worked with three other companies in the CPG space holding several positions including CEO, SVP, and other senior management positions including Board Member. From 1992 to 2018, Eric held multiple roles in the Kellogg Company, both domestically and internationally (Europe and Latin America) leading business units with P&L responsibility. His last two roles at the Kellogg Company were Vice President/General Manager of the Caribbean business unit from 2009 to 2014; and Vice President, Strategy and Operations for North America from 2014 - 2018. From 2018 to 2019, Mr. Gripentrog was the SVP and General Manager of Panera Bread's Consumer Packaged Goods division. This senior management position led this business unit covering six different product categories. He grew this division double-digit in both top-line and bottom-line performance, and his CPG division outperformed all other Panera business units and functions. From 2019 to 2020, Eric was the CEO and board member for Gina Cucina, Inc, a company involved in manufacturing and selling fresh soup into the retail grocery outlets and direct-to-consumer. His expertise in leading a business, managing the P&L and identifying margin enhancing opportunities for both business-to-business and direct-to-consumer clientele is critically important for the current role. Since 2020 Eric has been acting as the CEO of Hemptown USA, a director of Functional Brands, and a director of HTO Nevada, dba Kirkman. Whether Eric is leading a multi-billion-dollar operation or a small start-up; his experience in developing strategic plans and policies to bring the company vision to reality, implementing supporting plans, budgeting and forecasting, communicating with the Board of Directors, tracking company performance and establishing a high performing working culture, will enable his success in his current CEO role. Eric has an undergraduate degree from Western Michigan University.

**Tariq Rahim, *Chief Financial Officer, and Director***

Mr. Rahim brings over 15 years of professional experience with over 10 years as a qualified Chartered Professional Accountant (CPA, CA – Canada). Having worked in a wide variety of industries including cannabis, hemp, prop-tech, professional services spaces, among others. In addition to his current position as CFO at the Company since April 2023 and VP, Finance since June 2021, his previous roles included Controller at Nobul (prop-tech startup) from June 2020 to June 2021 and Controller at Tokyo Smoke (cannabis start-up) from September 2018 to May 2020. Beginning his post-qualification careers in the Fall of 2011, he has held consistently progressive roles from a junior in public accounting leading up to the current position as an executive. Having worked with companies ranging in size from small to multi-million dollar publicly listed companies, he has tremendous experience in leveraging his financial skills to lead companies and clients through the full gamut of accounting and finance challenges – strategic planning, financial reporting, financial planning & analysis, budgeting & forecasting, to mention just a few. From 2018 onward, Mr. Rahim focused his career on startups and utilizing his experience to build and scale. Since 2021 Tariq has been serving as CFO of Hemptown USA, director of Functional Brands, and director of HTO Nevada, dba Kirkman. He has an Honors Bachelor of Accounting degree in Accounting from Brock University.

**Girard Smith, *Director***

Girard Smith is a director nominee. Mr. Smith's tenure will commence upon the effective date of this registration statement. Mr. Smith is the general manager, growth strategy and solutions, and a member of the executive leadership team for Market Performance Group (MPG), a leading omnichannel commerce strategy and services agency. He is a highly accomplished business leader with extensive strategic and operational experience. Over the course of his career, he has successfully built and scaled numerous consumer packaged goods brands, driving exceptional growth, innovation, and operational excellence within the omnichannel commerce landscape. Girard brings a unique blend of visionary leadership, entrepreneurial thinking, and strategic depth. He has a proven track record for delivering transformative results and building high-performing teams. In his current role with MPG, Girard leads a team focused on enabling consumer packaged goods brands to thrive across the omnichannel marketplace, including in-store, Amazon, and direct to consumer retail. He leads the commercial consulting practice, supporting various client needs including due diligence, commercial investment, brand strategy, go-to-market strategy, and learning & development. He also leads the full-funnel marketing practice, which includes strategy, creative, media, social commerce, and end-to-end business management. Over a 25-year career at Bayer Consumer Health, Girard held executive leadership positions in marketing (Nutritional & OTC), Sales, and consumer research. Girard was recognized as a paradigm shifter, credited with identifying entrepreneurial solutions to address key challenges and opportunities, and enabling the company to gain a leading edge in the marketplace. He is recognized for restructuring Bayer's strategic and operational approach to the VMS category, to better leverage unique marketplace opportunities. His contributions led to category-defining product innovations and numerous game-changing initiatives in multivitamins and supplements. His new business model shaped the market in the company's favor over many years. Under his leadership, Bayer achieved significant growth of its $1 billion Nutritionals & Digestive Health portfolio, and the One A Day brand achieved the #1 position in the adult multivitamin category. He also delivered market-leading organic growth for Bayer's OTC business, revitalizing underperforming digestive health brands, while propelling significant market share growth for MiraLAX, the #1 laxative brand. In addition, he played a leading role in the acquisition and integration of the North American commercial activities for the Merck Consumer Health business. Girard's experience also includes his former role as an operating partner and board member for NetWell Nutrition, a private equity-owned company with a portfolio of premium eCommerce brands delivering clean-label, science-based products. In addition, he served on the board of directors and executive committee of the Council for Responsible Nutrition (CRN), the leading industry association for dietary supplement and functional food manufacturers, and B2B ingredient suppliers.

We believe that Mr. Smith's vast experience as a member of several companies' board of directors, his education, and professional credentials qualify him to serve as a member of the Company's Board of Directors.

**Lourdes Felix, *Director***

Lourdes Felix is a director nominee. Ms. Felix' tenure will commence upon the effective date of this registration statement. Ms. Felix is a female Hispanic entrepreneur and corporate finance executive with 30 years of combined experience in capital markets, public accounting, and the private sector who is driven by a passion for helping others. She presently serves as chief executive officer, chief financial officer and director of BioCorRx Inc. (OTCQB: BICX), a biotech company and leader in addiction treatment solutions and related disorders. She has been with BioCorRx since October 2012. Lourdes is also one of the founders and president of BioCorRx Pharmaceuticals Inc., a majority owned subsidiary of BioCorRx Inc that is focused on the development of addiction treatments and related disorders. Prior to joining BioCorRx her experience was in the private sector, public accounting including audit and public company experience. She has principles in finance, accounting, budgeting and internal control, including GAAP, SEC, and SOX Compliance. Thorough knowledge of federal and state regulations. Ms. Felix successfully managed and produced SEC regulatory filings. She has extensive experience in developing and managing financial operations. Lourdes has provided treasury and cash management functions. Ms. Felix is an excellent leader with a track record of documented contributions leading to improved financial performance, heightened productivity, and enhanced internal controls. Ms. Felix led corporate relationships with various major accounting firms and attorneys in preparing SEC filings and audited financial statements. Lourdes is very active in the Hispanic community and speaks fluent Spanish. Lourdes holds a Bachelor of Science degree in Accounting from the University of Phoenix. Since 2021 Ms. Felix has served as a member of the board of directors, audit committee chair, member compensation committee of Siyata Mobile Inc. (NASDAQ: SYTA). Since 2023, Ms. Felix has served as a member of the board of directors, compensation committee chair of Avalon Globocare (NASDAQ: ALBT)

We believe that Ms. Felix's vast experience as a member of several companies' board of directors, her education, and professional credentials qualify her to serve as a member of the Company's Board of Directors.

***Steven Rossi, Director***

Steven Rossi has served as the Chief Executive Officer, President, Secretary and Chair of the Board of Directors of WorkSport since November 7, 2014. Mr. Rossi attended the University of Toronto from 2005 to 2007, majoring in Life Science and pausing his post-secondary education to begin his career as an entrepreneur, visionary, and founder. Mr. Rossi founded two automotive-based companies in 2005 and 2006, respectively, and he managed and grew their respective operations for several years. Mr. Rossi then founded WorkSport Ontario, a wholly owned operating entity of WorkSport,, in 2011, and he has since been granted numerous patents across the United States and Canada – all of which he assigned exclusively to WorkSport. In a short time since raising substantial funds in 2021 with which to grow WorkSport, Mr. Rossi has been instrumental in retrofitting a distribution facility in West Seneca, New York into a manufacturing facility. He was further responsible for facilitating the research and development and planning the launch of new tonneau cover product lines; as these product lines were well-received by the consumer market, and as demand for them increased, Mr. Rossi then orchestrated the scaling of production through coordinating with teams across multiple states and disciplines to meet consumer demand. Through his two decades of business experience in the automotive sector, Steven Rossi possesses the knowledge and experience in establishing, managing, and growing companies that aid him in efficiently and effectively identifying and executing the Company's strategic priorities. As a CEO, Officer, Chair and Founder, Mr. Rossi brings to the Board extensive knowledge to be qualified as a member of the Functional Brands Inc. Board of Directors

**Family Relationships**

There are no family relationships among any of our officers or directors.

**Involvement in Certain Legal Proceedings**

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

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

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

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

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

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

● been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

**Corporate Governance**

***Governance Structure***

Upon the effective date of this registration statement, we will choose to appoint a separate Chairman of the Board who is not our Chief Executive Officer. Our board of directors' decision is based on the belief that an independent Chairman of the Board can act as a balance to the Chief Executive Officer, who also serves as a non-independent director.

***The Board's Role in Risk Oversight***

The board of directors oversees that the assets of our company are properly safeguarded, that the appropriate financial and other controls are maintained, and that our business is conducted wisely and in compliance with applicable laws and regulations and proper governance. Included in these responsibilities is the board's oversight of the various risks facing our company. In this regard, our board seeks to understand and oversee critical business risks. Our board does not view risk in isolation. Risks are considered in virtually every business decision and as part of our business strategy. Our board recognizes that it is neither possible nor prudent to eliminate all risk. Indeed, purposeful and appropriate risk-taking is essential for our company to be competitive on a global basis and to achieve its objectives.

While the board oversees risk management, company management is charged with managing risk. Management communicates routinely with the board and individual directors on the significant risks identified and how they are being managed. Directors are free to, and indeed often do, communicate directly with senior management.

Our board administers its risk oversight function as a whole by making risk oversight a matter of collective consideration. Much of this work has been delegated to committees, which will meet regularly and report back to the full board. The audit committee oversees risks related to our financial statements, the financial reporting process, accounting and legal matters, the compensation committee evaluates the risks and rewards associated with our compensation philosophy and programs, and the nominating and corporate governance committee evaluates risk associated with management decisions and strategic direction.

***Independent Directors***

NASDAQ's rules generally require that a majority of an issuer's board of directors consist of independent directors. Our board of directors currently consists of two (2) directors, Mr. Eric Gripentrog and Mr. Tariq Rahim. Upon the effective date of this registration statement, our board of directors will consist of five (5) directors, with three (3) directors, with Girard Smith, Lourdes Felix and Steven Rossi considered independent within the meaning of NASDAQ's rules. We have entered into independent director agreements with Girard Smith, Lourdes Felix and Blake Janover, pursuant to which each nominee director has been appointed to serve as an independent director of our company, whose tenure shall be effective and commence immediately on the date in which this registration statement is declared effective by the SEC. As a result of these board changes, our board of directors will consist of three directors, all of which will be independent within the meaning of NASDAQ's rules.

***Committees of the Board of Directors***

Our board has established an audit committee, a compensation committee, and a nominating and corporate governance committee, each with its own charter approved by the board. The committee charters have been filed as exhibits to the registration statement of which this prospectus is a part. Upon completion of this offering, we intend to make each committee's charter available on our website at https://functionalbrandsinc.com/.

In addition, our board of directors may, from time to time, designate one or more additional committees, which shall have the duties and powers granted to it by our board of directors.

*<u>Audit Committee</u>*

Girard Smith, Lourdes Felix and Steven Rossi, each of whom satisfies the "independence" requirements of Rule 10A-3 under the Exchange Act and NASDAQ's rules, will serve on our audit committee upon their appointment to the board, with Lourdes Felix serving as the chairman. Our board has determined that Lourdes Felix qualifies as an "audit committee financial expert." The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company.

The audit committee is responsible for, among other things: (i) retaining and overseeing our independent accountants; (ii) assisting the board in its oversight of the integrity of our financial statements, the qualifications, independence and performance of our independent auditors and our compliance with legal and regulatory requirements; (iii) reviewing and approving the plan and scope of the internal and external audit; (iv) pre-approving any audit and non-audit services provided by our independent auditors; (v) approving the fees to be paid to our independent auditors; (vi) reviewing with our chief executive officer and principal financial officer and independent auditors the adequacy and effectiveness of our internal controls; (vii) reviewing hedging transactions; and (viii) reviewing and assessing annually the audit committee's performance and the adequacy of its charter.

*<u>Compensation Committee</u>*

Girard Smith, Lourdes Felix and Steven Rossi, each of whom satisfies the "independence" requirements of Rule 10C-1 under the Exchange Act and NASDAQ's rules, will serve on our compensation committee upon their appointment to the board, with Girard Smith serving as the chairman. The members of the compensation committee are also "outside directors" as defined in Section 162(m) of the Internal Revenue Code of 1986, as amended, or the Code, and "non-employee directors" within the meaning of Section 16 of the Exchange Act. The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation relating to our directors and executive officers.

The compensation committee is responsible for, among other things: (i) reviewing and approving the remuneration of our executive officers; (ii) making recommendations to the board regarding the compensation of our independent directors; (iii) making recommendations to the board regarding equity-based and incentive compensation plans, policies and programs; and (iv) reviewing and assessing annually the compensation committee's performance and the adequacy of its charter.

*<u>Nominating and Corporate Governance Committee</u>*

Girard Smith, Lourdes Felix and Steven Rossi each of whom satisfies the "independence" requirements of NASDAQ's rules, will serve on our nominating and corporate governance committee upon their appointment to the board, with Steven Rossi serving as the chairman. The nominating and corporate governance committee assists the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its committees.

The nominating and corporate governance committee will be responsible for, among other things: (i) identifying and evaluating individuals qualified to become members of the board by reviewing nominees for election to the board submitted by shareholders and recommending to the board director nominees for each annual meeting of shareholders and for election to fill any vacancies on the board; (ii) advising the board with respect to board organization, desired qualifications of board members, the membership, function, operation, structure and composition of committees (including any committee authority to delegate to subcommittees), and self-evaluation and policies; (iii) advising on matters relating to corporate governance and monitoring developments in the law and practice of corporate governance; (iv) overseeing compliance with the our code of ethics; and (v) approving any related party transactions.

The nominating and corporate governance committee's methods for identifying candidates for election to our board of directors (other than those proposed by our shareholders, as discussed below) will include the solicitation of ideas for possible candidates from a number of sources - members of our board of directors, our executives, individuals personally known to the members of our board of directors, and other research. The nominating and corporate governance committee may also, from time-to-time, retain one or more third-party search firms to identify suitable candidates.

In making director recommendations, the nominating and corporate governance committee may consider some or all of the following factors: (i) the candidate's judgment, skill, experience with other organizations of comparable purpose, complexity and size, and subject to similar legal restrictions and oversight; (ii) the interplay of the candidate's experience with the experience of other board members; (iii) the extent to which the candidate would be a desirable addition to the board and any committee thereof; (iv) whether or not the person has any relationships that might impair his or her independence; and (v) the candidate's ability to contribute to the effective management of our company, taking into account the needs of our company and such factors as the individual's experience, perspective, skills and knowledge of the industry in which we operate.

No person entitled to vote at an election for directors may cumulate votes to which such person is entitled, unless, at the time of such election, the corporation is subject to Section 2115(b) of the CGCL. During such time or times that the corporation is subject to Section 2115(b) of the CGCL, every stockholder entitled to vote at an election for directors may cumulate such stockholder's votes and give one candidate a number of votes equal to the number of directors to be elected multiplied by the number of votes to which such stockholder's shares are otherwise entitled, or distribute the stockholder's votes on the same principle among as many candidates as such stockholder thinks fit. No stockholder, however, shall be entitled to so cumulate such stockholder's votes unless (i) the names of such candidate or candidates have been placed in nomination prior to the voting and (ii) the stockholder has given notice at the meeting, prior to the voting, of such stockholder's intention to cumulate such stockholder's votes. If any stockholder has given proper notice to cumulate votes, all stockholders may cumulate their votes for any candidates who have been properly placed in nomination. Under cumulative voting, the candidates receiving the highest number of votes, up to the number of directors to be elected, are elected.

**Code of Ethics**

We have adopted a code of ethics that applies to all of our directors, officers and employees, including our principal executive officer, principal financial officer and principal accounting officer. Such code of ethics addresses, among other things, honesty and ethical conduct, conflicts of interest, compliance with laws, regulations and policies, including disclosure requirements under the federal securities laws, and reporting of violations of the code.

**EXECUTIVE COMPENSATION**

*The following discussion and analysis of compensation arrangements should be read together with the compensation tables and related disclosures that follow. This discussion contains forward-looking statements that are based on our current plans and expectations regarding future compensation programs. Actual compensation programs that we adopt may differ materially from the programs summarized in this discussion. The following discussion may also contain statements regarding corporate performance targets and goals. These targets and goals are disclosed in the limited context of our compensation programs and should not be understood to be statements of management's expectations or estimates of results or other guidance. We specifically caution investors not to apply these statements to other contexts.*

**Summary Compensation Table – Years Ended December 31, 2024, and 2023**

The following table sets forth information concerning all cash and non-cash compensation awarded to, earned by or paid to the named persons for services rendered in all capacities during the noted periods. No other executive officers received total annual salary and bonus compensation in excess of $100,000.

**Summary Compensation Table** 

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| <br>**Name and Principal Position** | **Fiscal**<br>**Year** |<br>**Salary** |<br>**Bonus** | **Stock**<br>**Awards** | **Option**<br>**Awards** | **All Other**<br>**Compensation** |<br>**Total** |
| Eric Gripentrog | 2024 | $280000 | $- | $- | $- | $- | $280000 |
| &nbsp;&nbsp;&nbsp;Chief Executive Officer | 2023 | $280000 | $- | $- | $- | $- | $280000 |
| Tariq Rahim | 2024 | $200000 | $- | $- | $- | $- | $200000 |
| &nbsp;&nbsp;&nbsp;Chief Financial Officer | 2023 | $200000 | $- | $- | $- | $- | $200000 |

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**Employment Agreements**

We have entered into contractual agreements with our CEO and CFO.

*Employment Agreement – Eric Gripentrog, CEO* 

Effective as of March 11, 2025, the employment agreement has an original term of 12 months subject to automatic renewal unless terminated for cause. Effective upon achieving the Direct Listing, Mr. Gripentrog's annual salary will increase to $360,000. He is also entitled to an annual bonus up to 100% of his annual salary as determined by the Compensation Committee in its discretion. Mr. Gripentrog is also entitled to a performance-based equity awards based upon achieving the following:

&nbsp;&nbsp;&nbsp;&nbsp;(a) Restricted
 Stock Units equal to $500,000 which vest six (6) months after the completion of the Direct
 Listing, and valued at the price of the stock upon the date of vesting.

&nbsp;&nbsp;&nbsp;&nbsp;(b) The value of
 $500,000 worth of Company common stock upon closing of each acquisition post Direct Listing
 with such shares valued at the price of the Company's stock upon completion of the
 acquisition.

&nbsp;&nbsp;&nbsp;&nbsp;(c) The value of
 $250,000 worth of Company common stock upon the Company achieving positive EBIDTA for the
 first time in any calendar year with such shares valued at the price of the Company's
 stock at the end of such calendar year.

&nbsp;&nbsp;&nbsp;&nbsp;(d) The value of
 $1,000,000 worth of Company common stock upon the Company achieving a positive EBIDTA of
 $5 million for the first time in any calendar year with such shares valued at the price of
 the Company's stock at the end of such calendar year.

&nbsp;&nbsp;&nbsp;&nbsp;(e) The value of
 $1,000,000 worth of Company common stock upon the Company achieving a first time market valuation
 of $100 Million.

&nbsp;&nbsp;&nbsp;&nbsp;(f) The value of
 $2,500,000 worth of Company common stock upon the Company achieving a first time market valuation
 of $250 Million.

During the Term, if (i) a Change in Control has occurred, Mr. Gripentrog shall be paid a bonus (the "Change in Control Transaction Bonus"), in cash, equal to two (2) times the Base Salary as in effect immediately before such Change in Control. If applicable, the Change in Control Transaction Bonus shall be paid in a lump sum within fifteen (15) days after the consummation of such Change in Control and the following certification by the Board of the occurrence of such Change in Control.

"Change in Control" means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) A transaction or series of transactions
 (other than an offering of common stock to the general public through a registration statement filed by the Company with the Securities
 and Exchange Commission) whereby any "Person" or related "group" of "persons" (as such
 terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of its subsidiaries, any benefit
 plan maintained by the Company or any of its subsidiaries or a "Person" that, prior to such transaction, directly or
 indirectly controls, is controlled by, or is under common control with, the Company) directly or indirectly acquires beneficial ownership
 (within the meaning of Rule 13(d)(3) under the Exchange Act) of securities of the Company possessing more than fifty percent (50%)
 of the total combined voting power of the Company's securities outstanding immediately after such acquisition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The consummation by the Company (whether directly
 involving the Company or indirectly involving the Company through one or more intermediaries) of (x) a merger, consolidation, reorganization,
 or business combination, or (y) a sale or other disposition of all or substantially all of the Company's assets in any single
 transaction or series of related transactions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) which results in the Company's voting securities outstanding
 immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities
 of the Company or the Person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly
 or indirectly, all or substantially all of the Company's assets or otherwise succeeds to the business of the Company (the Company
 or such Person, the "Successor Entity") directly or indirectly, at least a majority of the combined voting power
 of the Successor Entity's outstanding voting securities immediately after the transaction, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) after which no Person or group beneficially owns voting securities
 representing fifty percent (50%) or more of the combined voting power of the Successor Entity; *provided, however,* that
 no Person or group shall be treated as beneficially owning fifty percent (50%) or more of the combined voting power of the Successor
 Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction.

*Employment Agreement – Tariq Rahim, CFO*

Effective as of April 1, 2023, the employment agreement has an original term of 12 months subject to automatic renewal unless terminated for cause. In addition to the salary described above, the CFO will be issued 27,265 company restricted stock units with an exercise price and vesting period to be determined after the initial public offering and 190,854 stock options with an exercise price and date of issuance to be determined by the Company's board of directors, with an expiration term of three years after termination of the employment agreement unless terminated for cause. The CFO is also entitled to a performance-based bonus payout as set forth in the chart below, after giving effect to the Reverse Stock Split:

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| | |
|:---|:---|
| **Consolidated Revenue Target (USD)** | **Functional Brands Inc. Stock Payout (common shares)** |
| Below $10,000,000 | 27265 |
| $10000000 | 54530 |
| $15000000 | 81795 |
| $20000000 | 109059 |
| $25000000 | 136324 |
| $30000000 | 163589 |
| $35000000 | 190854 |
| $40000000 | 218119 |

---

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

Except as described in the employment agreement above, no executive officer named above had any unexercised options, stock that has not vested or equity incentive plan awards outstanding as of December 31, 2024, and 2023.

**Director Compensation**

No member of our board of directors received any compensation for his or her services as a director during the fiscal years ending December 31, 2024, and 2023, nor do they currently receive any compensation for such services.

**Equity Incentive Plans**

*Long-Term Incentive Plans.* We do not provide our officers or employees with pension, stock appreciation rights, long-term incentive or other plans, nor do we provide non-qualified deferred compensation to our officers or employees, and therefore, the Summary Compensation Table above does not include columns for nonequity incentive plan compensation and nonqualified deferred compensation earnings since there were none.

*Employee Pension, Profit Sharing or other Retirement Plans.* We do not have a defined benefit, pension plan, profit sharing or other retirement plan, although we may adopt one or more of such plans in the future.

**CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS**

**Transactions with Related Persons**

Except as described below, there were no transactions during the fiscal years ending December 31, 2024 and 2023, or any currently proposed transaction, in which we were or are to be a participant and the amount involved exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the last three completed fiscal years, and in which any related person had or will have a direct or indirect material interest (other than compensation described under "*Executive Compensation*" above). We believe the terms obtained or consideration that we paid or received, as applicable, in connection with the transactions described below were comparable to terms available or the amounts that would be paid or received, as applicable, in arm's-length transactions.

*Debt facility with related parties* 

 

On March 7, 2025, the Company executed a loan agreement with Eric Gripentrog, our Chief Executive Officer, in the amount of $225,000, with an annual interest rate of 18%, with a maturity date of March 7, 2029.

 

On March 11, 2024, the Company executed a loan agreement with Mr. Gripentrog in the amount of $130,000, with an annual interest rate of 20%, with a maturity date of March 10, 2031.

**PRINCIPAL AND REGISTERED STOCKHOLDERS**

The following table sets forth:

● certain information regarding the beneficial ownership of our voting securities as of the date of this prospectus by (i) each person or group of affiliated persons known by us to be the beneficial owner of more than 5% of our voting securities, (ii) each of our executive officers, (iii) each of our directors and director nominees and (iv) all of our directors, director nominees and executive officers as a group. Except as otherwise indicated, all persons listed below have (i) sole voting power and investment power with respect to their common stock, except to the extent that authority is shared by spouses under applicable law, and (ii) record and beneficial ownership with respect to their common stock; and

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

Beneficial ownership is determined in accordance with SEC rules and generally includes voting or investment power with respect to securities. For purposes of this table, a person or group of persons is deemed to have "beneficial ownership" of any shares of common stock that such person or any member of such group has the right to acquire within sixty (60) days of the date of this prospectus. For purposes of computing the percentage of outstanding shares of our common stock held by each person or group of persons named above, any shares that such person or persons has the right to acquire within sixty (60) days of the date of this prospectus are deemed to be outstanding for such person, but not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. The inclusion herein of any shares listed as beneficially owned does not constitute an admission of beneficial ownership by any person.

We have agreed to issue two classes of convertible preferred stock to unaffiliated third party accredited investors or qualified institutional buyers in a private placement for gross proceeds of approximately $8,000,000. Such preferred Stock is convertible into shares of our common stock and 13,000,000 shares of the common stock into which such preferred stock may be converted is being registered with this registration statement and prospectus. See "*Plan of Distribution"* for more information on the private placement and the preferred stock.

The Registered Stockholders include certain stockholders with "restricted securities" (as defined in Rule 144 under the Securities Act) who, because they acquired their common stock from an affiliate or us within the prior 12 months, would be unable to sell their securities pursuant to Rule 144 until we have been subject to the reporting requirements of Section 13 or Section 15(d) of the Exchange Act for a period of at least 90 days. The Registered Stockholders may, or may not, elect to sell their common stock covered by this prospectus, as and to the extent they may determine. The Registered Stockholders may offer, sell or distribute all or a portion of the shares of common stock hereby registered publicly or through private transactions at prevailing market prices or at negotiated prices. The Registered Stockholders may elect to sell their shares in connection with this Direct Listing and in market transactions following this Direct Listing. As such, we will have no input if and when any Registered Stockholder may, or may not, elect to sell their common stock or the prices at which any such sales may occur. See "*Plan of Distribution*."

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

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

The percentages below are calculated based on 7,027,255 shares of our common stock, and no shares of preferred stock, issued and outstanding as of August 9, 2025. We do not have any outstanding options, warrants exercisable for, or other securities convertible into shares of our common stock within the next 60 days (other than the Series A and Series Convertible Preferred Stock) which are deemed beneficially owned by the holder thereof. The Registered Stockholders 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. See "*Management's Discussion & Analysis of Financial Results and Condition*" and "*Certain Relationships and Related Party Transactions*" for further information regarding the Registered Stockholders. Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o our company, Functional Brands Inc., 6400 SW Rosewood Street, Lake Oswego, Oregon 97035.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Name of Beneficial Owner** | **Title of Class** | **Amount and<br> Nature of<br> Beneficial<br> Ownership<sup>(1)</sup>** | **Percent of<br> Class** | **Number of Shares Being Offered** |
| Eric Gripentrog | Common Stock | 710924 | 10.00% | 710924 |
| Tariq Rahim | Common Stock | 174496 | 2.45% | 174496 |
| **All Officers and Directors as a Group (4)** | **Common Stock** | 885420 | 12.45% |  |

---

(1) After
 giving effect to the Reverse Stock Split.

**Other Registered Stockholders**

---

| | | | |
|:---|:---|:---|:---|
| **Name of Shareholder** | **Footnote** | **Number of<br> Shares of<br> Common<br> Stock<br> Beneficially<br> Owned** | **Number of<br> Shares<br> Being<br> Offered** |
| **1056365 BC LTD** | 1 | 65 | 39 |
| **1177883 BC LTD** | 2 | 1733 | 1040 |
| **514751 NB INC** | 3 | 99 | 60 |
| **576112 BC LTD** | 4 | 1444 | 867 |
| **680286 NB INC** | 5 | 99 | 60 |
| **7A J.A.M. CORPORATION** | 6 | 1805 | 1083 |
| **ADELE STONAWSKI** |  | 2382 | 1430 |
| **ADRIAN M SIMM** |  | 87 | 53 |
| **ADVISIR VENTURES LTD.** | 7 | 2888 | 1733 |
| **AKCCE INC** | 8 | 425 | 255 |
| **ALAN H FRIEDMAN** |  | 44 | 27 |
| **ALANA DROZDUKE** |  | 44 | 27 |
| **ALBERT O. MENN** |  | 29 | 18 |
| **ALESSANDRA BARION** |  | 7220 | 4332 |
| **ALEX HARVEY KAUFMAN** |  | 163 | 98 |
| **Alexander Schramek** |  | 2100 | 1260 |
| **ALEXANDRA YAMPOLSKY** |  | 7220 | 4332 |
| **ALEXANDRE SCHWAB** |  | 7220 | 4332 |
| **Alisen Tekeli** |  | 1444 | 867 |
| **ALL SEASONS CONSULTING INC** | 9 | 434 | 261 |
| **ALLEN WILSON** |  | 3899 | 2340 |
| **ALON KALIDYN** |  | 405 | 243 |
| **AMY HOWARD** |  | 85 | 51 |
| **AMY MACKAY** |  | 33 | 20 |
| **ANASTACIA L. TURNER** |  | 102 | 62 |
| **ANDREAS BRUCKNER** |  | 8 | 5 |
| **Andreas Brueckner** |  | 3543 | 2126 |
| **Andreas Elsner** |  | 1444 | 867 |
| **Andreas Krammer** |  | 1181 | 709 |
| **Andreas Rauber** |  | 919 | 552 |
| **Andreas Rusam** |  | 2100 | 1260 |
| **Andreas Schlagbauer** |  | 657 | 395 |
| **ANDREW D WILLIAMS** |  | 22 | 14 |
| **ANDY SHELTON** |  | 5415 | 3249 |
| **ANGELA MCKERRAL** |  | 4332 | 2600 |
| **ANGELO TURICIANO** |  | 85 | 51 |
| **ANNA CERVANTES** |  | 2383 | 1430 |
| **ANNE A LEGER** |  | 44 | 27 |
| **ANTHONY COLE** |  | 37 | 23 |
| **ANTHONY F DE ROSA** |  | 107 | 65 |
| **ANTHONY FEDELE** |  | 299 | 180 |

---

---

| | | | |
|:---|:---|:---|:---|
| **ANTONIO ANCONA** |  | 317 | 191 |
| **ARTILLERY ONE INC** | 10.0 | 11264 | 6759 |
| **ATHENA VENTURES INC** | 11.0 | 289 | 174 |
| **Aviso Wealth** | 12.0 | 4331 | 2599 |
| **BAKHTAWAR SINGH** |  | 67 | 41 |
| **BANISTER & MILLER, PLLC** | 13.0 | 11624 | 6975 |
| **BARBARA ROSENBERG & ODNEY ZOLT JT TEN** |  | 128 | 77 |
| **BERNARD WINKLER & LYNN WINKLER JT TEN** |  | 87 | 53 |
| **BHB GROUP PARTNERS LLC** | 14.0 | 190855 | 190855 |
| **BIG SKY PRIVATE EQUITY LLC** | 15.0 | 425 | 255 |
| **BILL LEACH** |  | 217 | 131 |
| **BIRKEN CAPITAL PARTNERS LTD.** | 16.0 | 8881 | 5329 |
| **BLAKE SANDOVAL** |  | 10906 | 10906 |
| **BLAKE W PELLETIER** |  | 15 | 9 |
| **BMO NESBITT BURNS INC TR A/C 270-06381-21** | 17.0 | 174 | 105 |
| **BMO NESBITT BURNS INC TR A/C 275-01248-24** | 18.0 | 224 | 135 |
| **BMO NESBITT BURNS INC TR A/C 275-05757-10** | 19.0 | 167 | 101 |
| **BMO NESBITT BURNS INC TR A/C 275-06167-12** | 20.0 | 325 | 195 |
| **BMO NESBITT BURNS INC TR A/C 275-06206-23** | 21.0 | 130 | 78 |
| **BMO NESBITT BURNS INC TR A/C 275-07045-26** | 22.0 | 97 | 59 |
| **BMO NESBITT BURNS INC TR A/C 275-07073-21** | 23.0 | 130 | 78 |
| **BMO NESBITT BURNS INC TR A/C 275-07311-23** | 24.0 | 65 | 39 |
| **BMO NESBITT BURNS INC TR A/C 275-07410-23** | 25.0 | 258 | 155 |
| **BMO NESBITT BURNS INC TR A/C 275-07555-10** | 26.0 | 333 | 200 |
| **BMO NESBITT BURNS INC TR A/C 275-07573-18** | 27.0 | 333 | 200 |
| **BMO NESBITT BURNS INC TR A/C 275-07936-28** | 28.0 | 650 | 390 |
| **BMO NESBITT BURNS INC TR A/C 275-07938-26** | 29.0 | 167 | 101 |
| **BMO NESBITT BURNS INC TR A/C 275-08381-26** | 30.0 | 325 | 195 |
| **BMO NESBITT BURNS INC TR A/C 275-08512-28** | 31.0 | 323 | 194 |
| **BMO NESBITT BURNS INC TR A/C 275-08619-20** | 32.0 | 65 | 39 |
| **BMO NESBITT BURNS INC TR A/C 275-08620-27** | 33.0 | 81 | 49 |
| **BMO NESBITT BURNS INC TR A/C 275-08656-24** | 34.0 | 65 | 39 |
| **BMO NESBITT BURNS INC TR A/C 275-08666-22** | 35.0 | 65 | 39 |
| **BMO NESBITT BURNS INC TR A/C 275-08684-20** | 36.0 | 968 | 581 |
| **BMO NESBITT BURNS INC TR A/C 275-08688-26** | 37.0 | 65 | 39 |
| **BMO NESBITT BURNS INC TR A/C 275-08689-25** | 38.0 | 193 | 116 |
| **BMO NESBITT BURNS INC TR A/C 275-08699-23** | 39.0 | 289 | 174 |
| **BMO NESBITT BURNS INC TR A/C 275-08729-27** | 40.0 | 129 | 78 |
| **BMO NESBITT BURNS INC TR A/C 275-08767-20** | 41.0 | 323 | 194 |
| **BMO NESBITT BURNS INC TR A/C 275-08769-28** | 42.0 | 64 | 39 |
| **BMO NESBITT BURNS INC TR A/C 275-08771-24** | 43.0 | 513 | 308 |
| **BMO NESBITT BURNS INC TR A/C 275-08773-14** | 44.0 | 73 | 44 |
| **BMO NESBITT BURNS INC TR A/C 275-08805-24** | 45.0 | 323 | 194 |
| **BMO NESBITT BURNS INC TR A/C 275-08894-18** | 46.0 | 97 | 59 |
| **BMO NESBITT BURNS INC TR A/C 275-08935-27** | 47.0 | 174 | 105 |
| **BMO NESBITT BURNS INC TR A/C 275-09004-21** | 48.0 | 448 | 269 |
| **BMO NESBITT BURNS INC TR A/C 275-09042-25** | 49.0 | 162 | 98 |
| **BMO NESBITT BURNS INC TR A/C 275-09054-20** | 50.0 | 51 | 31 |
| **BMO NESBITT BURNS INC TR A/C 275-09056-28** | 51.0 | 129 | 78 |
| **BMO NESBITT BURNS INC TR A/C 275-09059-25** | 52.0 | 643 | 386 |
| **BMO NESBITT BURNS INC TR A/C 275-09073-19** | 53.0 | 195 | 117 |
| **BMO NESBITT BURNS INC TR A/C 275-09074-18** | 54.0 | 195 | 117 |
| **BMO NESBITT BURNS INC TR A/C 275-09082-26** | 55.0 | 65 | 39 |
| **BMO NESBITT BURNS INC TR A/C 275-09094-22** | 56.0 | 162 | 98 |
| **BMO NESBITT BURNS INC TR A/C 275-09099-27** | 57.0 | 97 | 59 |
| **BMO NESBITT BURNS INC TR A/C 275-09108-26** | 58.0 | 129 | 78 |
| **BMO NESBITT BURNS INC TR A/C 275-09117-25** | 59.0 | 193 | 116 |
| **BMO NESBITT BURNS INC TR A/C 275-09126-24** | 60.0 | 64 | 39 |
| **BMO NESBITT BURNS INC TR A/C 275-09134-24** | 61.0 | 32 | 20 |
| **BMO NESBITT BURNS INC TR A/C 275-09135-23** | 62.0 | 128 | 77 |
| **BMO NESBITT BURNS INC TR A/C 275-09139-29** | 63.0 | 159 | 96 |
| **BMO NESBITT BURNS INC TR A/C 275-09140-26** | 64.0 | 325 | 195 |
| **BMO NESBITT BURNS INC TR A/C 275-09141-25** | 65.0 | 128 | 77 |

---

---

| | | | |
|:---|:---|:---|:---|
| **BMO NESBITT BURNS INC TR A/C 275-09142-24** | 66.0 | 159 | 96 |
| **BMO NESBITT BURNS INC TR A/C 275-99121-12** | 67.0 | 195 | 117 |
| **BMO NESBITT BURNS INC TR A/C 285-01278-26** | 68.0 | 174 | 105 |
| **BMO NESBITT BURNS INC TR A/C 285-02156-21** | 69.0 | 195 | 117 |
| **BMO NESBITT BURNS INC TR A/C 285-02415-28** | 70.0 | 145 | 87 |
| **BMO NESBITT BURNS INC TR A/C 285-02426-25** | 71.0 | 195 | 117 |
| **BMO NESBITT BURNS INC TR A/C 285-02536-14** | 72.0 | 130 | 78 |
| **BMO Nesbitt Burns ITF 608266 NB Ltd. 275-07177-18** | 73.0 | 7217 | 4331 |
| **BMO Nesbitt Burns ITF 636579 NB Inc. 275-07528-14** | 74.0 | 7217 | 4331 |
| **BMO Nesbitt Burns ITF 648557 NB Inc. 275-07938-26** | 75.0 | 14434 | 8661 |
| **BMO Nesbitt Burns ITF Allan Burgoyne 275-08767-20** | 76.0 | 21651 | 12991 |
| **BMO Nesbitt Burns ITF Bohdon Holdings Inc. 275-07936-28** | 77.0 | 14434 | 8661 |
| **BMO Nesbitt Burns ITF Bradley Deware 275-08700-12** | 76.0 | 8661 | 5197 |
| **BMO Nesbitt Burns ITF Brenda Young 275-06167-12** | 76.0 | 7217 | 4331 |
| **BMO Nesbitt Burns ITF Carolyn Shepherd** | 76.0 | 4331 | 2599 |
| **BMO Nesbitt Burns ITF Catherine Coyle Trust Holdings Inc. 275-07555-10** | 78.0 | 7217 | 4331 |
| **BMO Nesbitt Burns ITF Chris Grannan** | 76.0 | 7217 | 4331 |
| **BMO Nesbitt Burns ITF Corey Babineau 275-08855-23** | 76.0 | 4987 | 2993 |
| **BMO Nesbitt Burns ITF Covalent Enterprises Ltd. 275-08188-21** | 79.0 | 7217 | 4331 |
| **BMO Nesbitt Burns ITF Coyle Trust Holdings Inc. 275-07573-18** | 80.0 | 7217 | 4331 |
| **BMO Nesbitt Burns ITF Craig Brennan** | 76.0 | 14434 | 8661 |
| **BMO Nesbitt Burns ITF Danahelo Holdings Ltd. 275-06896-28** | 81.0 | 7873 | 4724 |
| **BMO Nesbitt Burns ITF Danny Cormier 275-09014-29** | 76.0 | 14434 | 8661 |
| **BMO Nesbitt Burns ITF Devon Strang 275-08745-27** | 76.0 | 2887 | 1733 |
| **BMO Nesbitt Burns ITF Donald McInnes** | 76.0 | 3543 | 2126 |
| **BMO Nesbitt Burns ITF Doug and Barb Anderson 275-07311-23** | 76.0 | 76 | 46 |
| **BMO Nesbitt Burns ITF Doug Simpson Investments Ltd. 275-09010-15** | 82.0 | 14434 | 8661 |
| **BMO Nesbitt Burns ITF Dr. D.E. Craig Professional Corporation 275-05922-28** | 83.0 | 7217 | 4331 |
| **BMO Nesbitt Burns ITF Dr. Jeff Sheppard Prof. Corp. 275-08671-17** | 84.0 | 7217 | 4331 |
| **BMO Nesbitt Burns ITF Dr. Pierre Andre Beaulieu Prof. Corp. 275-08894-18** | 85.0 | 9317 | 5591 |
| **BMO Nesbitt Burns ITF Greg Walton Investments Limited 275-07587-12** | 86.0 | 28868 | 17321 |
| **BMO Nesbitt Burns ITF James Avery Grace Corp. 275-07996-25** | 87.0 | 2100 | 1260 |
| **BMO Nesbitt Burns ITF Jeremy Pearson 275-99035-25** | 76.0 | 814 | 489 |
| **BMO Nesbitt Burns ITF John L. Murray Financial Services Ltd. 275-07165-20** | 88.0 | 7217 | 4331 |
| **BMO Nesbitt Burns ITF John Young 275-05757-10** | 76.0 | 14434 | 8661 |
| **BMO Nesbitt Burns ITF Johnny Longphee 275-08656-24** | 76.0 | 14434 | 8661 |
| **BMO Nesbitt Burns ITF Kimberly Dolan 275-08772-23** | 76.0 | 7217 | 4331 |
| **BMO Nesbitt Burns ITF Mark and Lauren Anderson 275-07382-27** | 76.0 | 431 | 259 |
| **BMO Nesbitt Burns ITF Matthew Straight 275-99116-19** | 76.0 | 113 | 68 |
| **BMO Nesbitt Burns ITF Nilock Capital Corp. 275-08475-23** | 89.0 | 36085 | 21651 |
| **BMO Nesbitt Burns ITF Peach Investments Ltd.** | 90.0 | 7086 | 4252 |
| **BMO Nesbitt Burns ITF Peter Deware 275-08692-20** | 76.0 | 14434 | 8661 |
| **BMO Nesbitt Burns ITF RDDS Holdings Ltd. 275-08805-24** | 91.0 | 28868 | 17321 |
| **BMO Nesbitt Burns ITF Robert & Elaine Steckler** | 76.0 | 3543 | 2126 |
| **BMO Nesbitt Burns ITF Robert &/or Stephanie Downey 275-09004-21** | 76.0 | 14434 | 8661 |
| **BMO Nesbitt Burns ITF Robert Strang 275-08889-23** | 76.0 | 7217 | 4331 |
| **BMO Nesbitt Burns ITF Ryan Carphin** |  | 3543 | 2126 |
| **BMO Nesbitt Burns ITF Samuel Mackay 275-0866-12** | 76.0 | 7217 | 4331 |
| **BMO Nesbitt Burns ITF Strang's Produce Inc. 275-08893-27** | 92.0 | 10760 | 6456 |
| **BMO Nesbitt Burns ITF The Streeter Family Trust 275-06778-13** | 93.0 | 5774 | 3465 |
| **BMO Nesbitt Burns ITF Trevor & Joan Heaver** | 76.0 | 2887 | 1733 |
| **BMO Nesbitt Burns ITF Val Streeter 275-99069-24** | 76.0 | 307 | 185 |
| **BMO Nesbitt Burns ITF William Dunnett 275-09011-22** | 76.0 | 10760 | 6456 |
| **BMO NESBITT BURNS TR CATHY PEARSON A/C 275-07200-27** | 76.0 | 1444 | 867 |
| **BMO Nesbitt Burns TR Daniel Kokan A/C 805-51932-24** | 94.0 | 525 | 315 |
| **BMO NESBITT BURNS TR GREG WALTON INVESTMENTS LIMITED A/C 275-07587-12** | 95.0 | 30 | 18 |
| **BMO NESBITT BURNS TR KIMBERLY DOLAN A/C 275-08772-23** | 76.0 | 8 | 5 |

---

---

| | | | |
|:---|:---|:---|:---|
| **BOESCH & COMPANY** | 96.0 | 255 | 153 |
| **BRAD MITCHELL** |  | 73 | 44 |
| **BRADLEY A DUSSAULT** |  | 217 | 131 |
| **BRADLEY JACOKES** |  | 6580 | 3948 |
| **BRANDON HOLDRIDGE** |  | 903 | 542 |
| **BRANDON ROOK** |  | 434 | 261 |
| **BRETT JOSEPH WOLTERMAN** |  | 258 | 155 |
| **BRIAN SHEARON** |  | 32 | 20 |
| **BRUCE MACKINNON** |  | 289 | 174 |
| **Brunhilde Paulus** |  | 1706 | 1024 |
| **BRYAN HENRY** | 97.0 | 2888 | 1733 |
| **CALVIN C ZOELLNER** |  | 29 | 18 |
| **CALVIN R BRAUNSTEIN** |  | 255 | 153 |
| **CAMM GLOBAL INC** | 98.0 | 1444 | 867 |
| **CANACCORD GENUITY CORP ITF MARK VENIER** | 99.0 | 138 | 83 |
| **CANACCORD GENUITY CORP ITF PETER FARNWORTH** | 99.0 | 111 | 67 |
| **Canaccord Genuity Corp ITF Philip W. Anderson** | 99.0 | 7217 | 4331 |
| **CANACCORD GENUITY CORP.** | 100.0 | 51675 | 31006 |
| **Canaccord Genuity Corp. ITF 0885093 BC Ltd.** | 99.0 | 20208 | 12125 |
| **Canaccord Genuity Corp. ITF 1073331 BC Ltd.** | 99.0 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF 1133918 B.C. LTD** | 99.0 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF 1136124 BC ULC** | 99.0 | 4331 | 2599 |
| **Canaccord Genuity Corp. ITF 2134255 Ontario Inc.** | 99.0 | 4331 | 2599 |
| **Canaccord Genuity Corp. ITF 4390270 Canada Inc.** | 99.0 | 14434 | 8661 |
| **Canaccord Genuity Corp. ITF 641470 Alberta Ltd** | 99.0 | 2100 | 1260 |
| **Canaccord Genuity Corp. ITF 678724 NB Inc.** | 99.0 | 57735 | 34641 |
| **Canaccord Genuity Corp. ITF 7198362 Man Pldg** | 101.0 | 144338 | 86603 |
| **Canaccord Genuity Corp. ITF ADPL Ventures Inc.** | 102.0 | 3543 | 2126 |
| **Canaccord Genuity Corp. ITF Adrian Lamoureux** | 99.0 | 2887 | 1733 |
| **Canaccord Genuity Corp. ITF Adrienne Fung** | 99.0 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF Alcaron Capital Corp.** | 99.0 | 14434 | 8661 |
| **Canaccord Genuity Corp. ITF Alexandria Martin** | 99.0 | 2100 | 1260 |
| **Canaccord Genuity Corp. ITF Algonquin Holdings Inc.** | 103.0 | 3543 | 2126 |
| **Canaccord Genuity Corp. ITF Alnashir Virani** | 99.0 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF Amanda Holowachuk** | 99.0 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF Anand &/or Aruna Vaidyanath** | 99.0 | 5774 | 3465 |
| **Canaccord Genuity Corp. ITF Andrew Morrisey** | 99.0 | 7217 | 4331 |
| **Canaccord Genuity Corp. ITF Andrew/Stacey Hiew** | 99.0 | 4331 | 2599 |
| **Canaccord Genuity Corp. ITF Anita Luszszak** | 99.0 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF Arnold Dlin** | 99.0 | 14434 | 8661 |
| **Canaccord Genuity Corp. ITF Arsenault Solutions Inc.** | 99.0 | 7217 | 4331 |
| **Canaccord Genuity Corp. ITF Arthur L Cinnamon** | 99.0 | 17977 | 10787 |
| **Canaccord Genuity Corp. ITF Arthur L. Cinnamon** | 99.0 | 3543 | 2126 |
| **Canaccord Genuity Corp. ITF ATP Investments Inc** | 99.0 | 57735 | 34641 |
| **Canaccord Genuity Corp. ITF B.D. Corporate Services Inc.** | 99.0 | 2887 | 1733 |
| **Canaccord Genuity Corp. ITF Barry &/or Sharon Larson** | 99.0 | 14434 | 8661 |
| **Canaccord Genuity Corp. ITF Barry Chilibeck** | 99.0 | 4331 | 2599 |
| **Canaccord Genuity Corp. ITF Bearcliff Trading Corp.** | 104.0 | 7217 | 4331 |
| **Canaccord Genuity Corp. ITF BENJAMIN CURRY** | 99.0 | 6281 | 3769 |
| **Canaccord Genuity Corp. ITF Blair Brown** | 99.0 | 2100 | 1260 |
| **Canaccord Genuity Corp. ITF Blair GogoWich** | 99.0 | 2887 | 1733 |
| **Canaccord Genuity Corp. ITF Blair Yorke-Slader** | 99.0 | 14434 | 8661 |
| **Canaccord Genuity Corp. ITF Brenda-Lee Hill** | 99.0 | 4987 | 2993 |
| **Canaccord Genuity Corp. ITF Brendan Stutt** | 99.0 | 3543 | 2126 |
| **Canaccord Genuity Corp. ITF Brent Holowachuk** | 99.0 | 2100 | 1260 |
| **Canaccord Genuity Corp. ITF Brian & Leela Soares** | 99.0 | 11547 | 6929 |
| **Canaccord Genuity Corp. ITF Brian Kowall Holdings Ltd.** | 105.0 | 7217 | 4331 |
| **Canaccord Genuity Corp. ITF Bruce Hill** | 99.0 | 15090 | 9054 |
| **Canaccord Genuity Corp. ITF Bryan Arthur** | 99.0 | 2887 | 1733 |
| **Canaccord Genuity Corp. ITF Candice Prescott** | 99.0 | 2887 | 1733 |
| **Canaccord Genuity Corp. ITF Cathryn J. Poole &/or David Boone** | 99.0 | 14434 | 8661 |
| **Canaccord Genuity Corp. ITF Chantal Olson** | 99.0 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF Charles Main** | 99.0 | 2887 | 1733 |
| **Canaccord Genuity Corp. ITF Chris Lien** | 99.0 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF Chris Parry** | 99.0 | 2887 | 1733 |
| **Canaccord Genuity Corp. ITF Christian Stachow** | 99.0 | 4331 | 2599 |
| **Canaccord Genuity Corp. ITF Christopher Kucharski &/or Stephanie Bold** | 99.0 | 7217 | 4331 |

---

---

| | | | |
|:---|:---|:---|:---|
| **Canaccord Genuity Corp. ITF Clive Brookes** | 99 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF Colby Bell** | 99 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF Colin Topham** | 99 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF Columbia St Holdings** | 106 | 28868 | 17321 |
| **Canaccord Genuity Corp. ITF Corey Babineau** | 99 | 7217 | 4331 |
| **Canaccord Genuity Corp. ITF Corinne Chodzick** | 99 | 3543 | 2126 |
| **Canaccord Genuity Corp. ITF Curtis Jansen** | 99 | 2887 | 1733 |
| **Canaccord Genuity Corp. ITF D. Baker Capital Inc.** | 107 | 2887 | 1733 |
| **Canaccord Genuity Corp. ITF Dallas Manning** | 99 | 3543 | 2126 |
| **Canaccord Genuity Corp. ITF Darlene Noble** | 99 | 2100 | 1260 |
| **Canaccord Genuity Corp. ITF Darringer Enterprise** | 108 | 14434 | 8661 |
| **Canaccord Genuity Corp. ITF Dave Delgreco** | 99 | 10760 | 6456 |
| **Canaccord Genuity Corp. ITF David Basche** | 99 | 2887 | 1733 |
| **Canaccord Genuity Corp. ITF David Beattie** | 99 | 5774 | 3465 |
| **Canaccord Genuity Corp. ITF David Bishop** | 99 | 3543 | 2126 |
| **Canaccord Genuity Corp. ITF David Edwards** | 99 | 8661 | 5197 |
| **Canaccord Genuity Corp. ITF David Ghermezian** | 99 | 10760 | 6456 |
| **Canaccord Genuity Corp. ITF David Holmes** | 99 | 14434 | 8661 |
| **Canaccord Genuity Corp. ITF David Wood** | 99 | 28868 | 17321 |
| **Canaccord Genuity Corp. ITF Davy Ly Lun &/or Jessica Lan Keng** | 99 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF DIG MEDIA INC.** | 109 | 194 | 117 |
| **Canaccord Genuity Corp. ITF Dirk Lohrisch** | 99 | 14434 | 8661 |
| **Canaccord Genuity Corp. ITF DLCS Holdings Ltd.** | 110 | 2887 | 1733 |
| **Canaccord Genuity Corp. ITF Don Ghermezian** | 99 | 7217 | 4331 |
| **Canaccord Genuity Corp. ITF Donald Buchinski** | 99 | 3543 | 2126 |
| **Canaccord Genuity Corp. ITF Donald Greenfield** | 99 | 7217 | 4331 |
| **Canaccord Genuity Corp. ITF Douglas Charlish** | 99 | 2100 | 1260 |
| **Canaccord Genuity Corp. ITF Dr. Arnold Dlin** | 99 | 3543 | 2126 |
| **Canaccord Genuity Corp. ITF Dwayne Lashyn** | 99 | 2100 | 1260 |
| **Canaccord Genuity Corp. ITF Eric Blakely** | 99 | 7217 | 4331 |
| **Canaccord Genuity Corp. ITF Eric Tomasek** | 99 | 2100 | 1260 |
| **Canaccord Genuity Corp. ITF Fisher Pond Inc.** | 111 | 7217 | 4331 |
| **Canaccord Genuity Corp. ITF G & L Height Holdings Ltd.** | 112 | 7217 | 4331 |
| **Canaccord Genuity Corp. ITF G.A Beach Consultants Ltd.** | 113 | 4331 | 2599 |
| **Canaccord Genuity Corp. ITF Gary & Annette Mario Bunz** | 99 | 7217 | 4331 |
| **Canaccord Genuity Corp. ITF GCPD Ontario Inc.** | 114 | 14434 | 8661 |
| **Canaccord Genuity Corp. ITF Geoffrey P Stenger** | 99 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF Gift2Gift Corp.** | 115 | 7217 | 4331 |
| **Canaccord Genuity Corp. ITF Gordon and Barbara Johnston** | 99 | 10104 | 6063 |
| **Canaccord Genuity Corp. ITF Greg Davis** | 99 | 10760 | 6457 |
| **Canaccord Genuity Corp. ITF Greg Sewell** | 99 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF Gregory & Elizabeth Kwong** | 99 | 7217 | 4331 |
| **Canaccord Genuity Corp. ITF Gregory Sewell** | 99 | 4987 | 2993 |
| **Canaccord Genuity Corp. ITF Gregory Urton** | 99 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF Halcorp Capital Ltd.** | 116 | 5774 | 3465 |
| **Canaccord Genuity Corp. ITF Hans & Terri Birker** | 99 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF Ian Stewart** | 99 | 2100 | 1260 |
| **Canaccord Genuity Corp. ITF James Hansen** | 99 | 14434 | 8661 |
| **Canaccord Genuity Corp. ITF James O'Rourke** | 99 | 3543 | 2126 |
| **Canaccord Genuity Corp. ITF Jamie McTavish & Karen Flavelle** | 99 | 4331 | 2599 |
| **Canaccord Genuity Corp. ITF Jason Ropchan** | 99 | 7217 | 4331 |
| **Canaccord Genuity Corp. ITF Jason Short** | 99 | 3543 | 2126 |
| **Canaccord Genuity Corp. ITF Jeffrey Pilkington** | 117 | 3543 | 2126 |
| **Canaccord Genuity Corp. ITF Jerry & Jackoline Dugger** | 99 | 14303 | 8582 |
| **Canaccord Genuity Corp. ITF Jerry Dugger** | 99 | 28868 | 17322 |
| **Canaccord Genuity Corp. ITF JNC Holdings Inc.** | 118 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF Joey Taylor** | 99 | 2887 | 1733 |
| **Canaccord Genuity Corp. ITF John C. McLeod Law Corp.** | 119 | 2100 | 1260 |
| **Canaccord Genuity Corp. ITF John Macleod** | 99 | 2887 | 1733 |
| **Canaccord Genuity Corp. ITF John Reynolds** | 99 | 2100 | 1260 |
| **Canaccord Genuity Corp. ITF John Seaman** | 99 | 2100 | 1260 |
| **Canaccord Genuity Corp. ITF John-Paul Portelli** | 99 | 4331 | 2599 |
| **Canaccord Genuity Corp. ITF Joseph Eugene Sekora** | 99 | 3543 | 2126 |
| **Canaccord Genuity Corp. ITF Joseph Grosso** | 99 | 14434 | 8661 |
| **Canaccord Genuity Corp. ITF Joseph M Fairbloom** | 99 | 5774 | 3465 |
| **Canaccord Genuity Corp. ITF Joyce and Channarong Ratanaseangsuang** | 99 | 21651 | 12991 |
| **Canaccord Genuity Corp. ITF Juniper Currie** | 99 | 2100 | 1260 |
| **Canaccord Genuity Corp. ITF Justin Lee** | 99 | 4331 | 2599 |

---

---

| | | | |
|:---|:---|:---|:---|
| **Canaccord Genuity Corp. ITF Keith James** | 99.0 | 2887 | 1733 |
| **Canaccord Genuity Corp. ITF Kelley & Jeffrey Warner** | 99.0 | 2100 | 1260 |
| **Canaccord Genuity Corp. ITF Kenneth Pinsky** | 99.0 | 3543 | 2126 |
| **Canaccord Genuity Corp. ITF Kenneth Struss** | 99.0 | 3543 | 2126 |
| **Canaccord Genuity Corp. ITF Kenneth Zandee** | 99.0 | 4331 | 2599 |
| **Canaccord Genuity Corp. ITF Kevin Reinhart** | 99.0 | 14434 | 8661 |
| **Canaccord Genuity Corp. ITF Kristen & Alex Harrison** | 99.0 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF Langton, Cheney & Carol Lynn** | 99.0 | 2887 | 1733 |
| **Canaccord Genuity Corp. ITF Larry Hammond &/or Karen Abbott** | 99.0 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF Leslie O'Donoghue** | 99.0 | 14434 | 8661 |
| **Canaccord Genuity Corp. ITF Liam Sauro** | 99.0 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF Lisa C Cumming** | 99.0 | 7217 | 4331 |
| **Canaccord Genuity Corp. ITF Lisa Van Hemert** | 99.0 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF Little Puck Entertainment Inc.** | 120.0 | 36085 | 21651 |
| **Canaccord Genuity Corp. ITF Logan Craig &/or Mary Sloan-Craig** | 99.0 | 4987 | 2993 |
| **Canaccord Genuity Corp. ITF Lorick Holdings Ltd.** | 121.0 | 3543 | 2126 |
| **Canaccord Genuity Corp. ITF Lorne Goodlet** | 99.0 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF Loyola Keough** | 99.0 | 5774 | 3465 |
| **Canaccord Genuity Corp. ITF Luke Hamill** | 99.0 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF M.R.S. Leasing Corp.** | 122.0 | 4331 | 2599 |
| **Canaccord Genuity Corp. ITF Maclachlan Investments Corp.** | 123.0 | 28868 | 17321 |
| **Canaccord Genuity Corp. ITF Manish Jain** | 99.0 | 3543 | 2126 |
| **Canaccord Genuity Corp. ITF Marc Spicer** | 99.0 | 9317 | 5591 |
| **Canaccord Genuity Corp. ITF Mark Naccache** | 99.0 | 2887 | 1733 |
| **Canaccord Genuity Corp. ITF Martine Peters** | 99.0 | 2100 | 1260 |
| **Canaccord Genuity Corp. ITF Marty Staples** | 99.0 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF Matthew Gowanlock** | 99.0 | 14565 | 8739 |
| **Canaccord Genuity Corp. ITF Michael &/or Celia McLeod** | 99.0 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF Michael Bordeleau-Tassile** | 99.0 | 4331 | 2599 |
| **Canaccord Genuity Corp. ITF Michael Boyes** | 99.0 | 7217 | 4331 |
| **Canaccord Genuity Corp. ITF Michael Halvorson** | 99.0 | 7217 | 4331 |
| **Canaccord Genuity Corp. ITF MICHAEL HEWETT** |  | 1083 | 650 |
| **Canaccord Genuity Corp. ITF Michael Lysko** | 99.0 | 2887 | 1733 |
| **Canaccord Genuity Corp. ITF Michael Parker** | 99.0 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF Michel LeBlanc** | 99.0 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF Michele Zampini** | 99.0 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF Michelle Vincent** | 99.0 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF Mikhail and Elena Solovyev** | 99.0 | 14434 | 8661 |
| **Canaccord Genuity Corp. ITF Murray Caruth** | 99.0 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF Neil &/or Susan Manning** | 99.0 | 14434 | 8661 |
| **Canaccord Genuity Corp. ITF Neil Duffy** | 99.0 | 5905 | 3543 |
| **Canaccord Genuity Corp. ITF Nia Capital Corp.** | 124.0 | 2887 | 1733 |
| **Canaccord Genuity Corp. ITF Nick Demare** | 99.0 | 3543 | 2126 |
| **Canaccord Genuity Corp. ITF Norm & Christine Chung** | 99.0 | 3018 | 1811 |
| **Canaccord Genuity Corp. ITF ORCA Capital GmbH** | 125.0 | 10760 | 6456 |
| **Canaccord Genuity Corp. ITF Patcharin Smith** | 99.0 | 14434 | 8661 |
| **Canaccord Genuity Corp. ITF Patricia Sowa** | 99.0 | 7217 | 4331 |
| **Canaccord Genuity Corp. ITF Paul Pigeon** | 99.0 | 43958 | 26376 |
| **Canaccord Genuity Corp. ITF Peter & Glenda Philipchuk** | 99.0 | 7217 | 4331 |
| **Canaccord Genuity Corp. ITF Peter Fay** | 99.0 | 14434 | 8661 |
| **Canaccord Genuity Corp. ITF Peter Lubey** | 99.0 | 2887 | 1733 |
| **Canaccord Genuity Corp. ITF Puetz Family Trust** | 126.0 | 10760 | 6456 |
| **Canaccord Genuity Corp. ITF Quantico Capital Corp.** | 127.0 | 21651 | 12991 |
| **Canaccord Genuity Corp. ITF Ram Platinum Pty Ltd.** | 128.0 | 2100 | 1260 |
| **Canaccord Genuity Corp. ITF Raymond Reed Enterprises Ltd.** | 129.0 | 3543 | 2126 |
| **Canaccord Genuity Corp. ITF Rebecca Darling** | 99.0 | 7217 | 4331 |
| **Canaccord Genuity Corp. ITF Richard P. Borden Professional Corporation** | 130.0 | 3543 | 2126 |
| **Canaccord Genuity Corp. ITF Robert Forrest** | 99.0 | 3543 | 2126 |
| **Canaccord Genuity Corp. ITF Robert Geddes** | 99.0 | 14434 | 8661 |

---

---

| | | | |
|:---|:---|:---|:---|
| **Canaccord Genuity Corp. ITF Robert Kossman** | 99.0 | 28868 | 17321 |
| **Canaccord Genuity Corp. ITF Robert Krahn** | 99.0 | 4331 | 2599 |
| **Canaccord Genuity Corp. ITF Robert Malcolm** | 99.0 | 3543 | 2126 |
| **Canaccord Genuity Corp. ITF Robert Mills Alter Ego Trust No. 1** | 131.0 | 36085 | 21651 |
| **Canaccord Genuity Corp. ITF Robert Rubinic** | 99.0 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF Robert Sean King** | 99.0 | 3543 | 2126 |
| **Canaccord Genuity Corp. ITF Robert Shore** | 99.0 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF Rupert 2019 Settlement** | 132.0 | 43302 | 25982 |
| **Canaccord Genuity Corp. ITF Russell &/or Linda Holowachuk** | 99.0 | 7217 | 4331 |
| **Canaccord Genuity Corp. ITF Samuel Feldman** | 99.0 | 14434 | 8661 |
| **Canaccord Genuity Corp. ITF Sanders D. Lee** | 99.0 | 14434 | 8661 |
| **Canaccord Genuity Corp. ITF Sascha Opel** | 99.0 | 4331 | 2599 |
| **Canaccord Genuity Corp. ITF Satwant Brar** | 99.0 | 4331 | 2599 |
| **Canaccord Genuity Corp. ITF Satwinder Mann** | 99.0 | 7217 | 4331 |
| **Canaccord Genuity Corp. ITF SEAN GERCSAK** | 99.0 | 7219 | 4333 |
| **Canaccord Genuity Corp. ITF Severin Samulski** | 99.0 | 2887 | 1733 |
| **Canaccord Genuity Corp. ITF Shairole Henchall** | 99.0 | 4331 | 2599 |
| **Canaccord Genuity Corp. ITF Shlomo Baranovski** | 99.0 | 14434 | 8661 |
| **Canaccord Genuity Corp. ITF Sophie Holtkamp** | 99.0 | 2100 | 1260 |
| **Canaccord Genuity Corp. ITF Stanley Burton** | 99.0 | 3018 | 1811 |
| **Canaccord Genuity Corp. ITF Stefan Thies** | 99.0 | 7217 | 4331 |
| **Canaccord Genuity Corp. ITF Stephen & Ellen Cronk** | 99.0 | 7217 | 4331 |
| **Canaccord Genuity Corp. ITF Steve Kolanko** | 99.0 | 28868 | 17321 |
| **Canaccord Genuity Corp. ITF Stewart McGregor** | 99.0 | 36085 | 21651 |
| **Canaccord Genuity Corp. ITF Susan West** | 99.0 | 3543 | 2126 |
| **Canaccord Genuity Corp. ITF Taylor Cumming** | 99.0 | 7217 | 4331 |
| **Canaccord Genuity Corp. ITF Terence Wells** | 99.0 | 2887 | 1733 |
| **Canaccord Genuity Corp. ITF The Henri & Dorothy Pigeon Joint Partner Trust 2010** | 133.0 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF The Saunders Family Trust** | 134.0 | 7217 | 4331 |
| **Canaccord Genuity Corp. ITF Timothy &/or Dianne Nakaska** | 99.0 | 2887 | 1733 |
| **Canaccord Genuity Corp. ITF Todd Hanas** | 99.0 | 1444 | 867 |
| **Canaccord Genuity Corp. ITF Tony Ghermezian** | 99.0 | 3543 | 2126 |
| **Canaccord Genuity Corp. ITF Tracy Henuset** | 99.0 | 2100 | 1260 |
| **Canaccord Genuity Corp. ITF Travis O'Donnell** | 99.0 | 5774 | 3465 |
| **Canaccord Genuity Corp. ITF Trevor Wallace** | 99.0 | 28868 | 17321 |
| **Canaccord Genuity Corp. ITF Vanguard Marketing** | 135.0 | 14434 | 8661 |
| **Canaccord Genuity Corp. ITF Victoria K. Morisset** | 99.0 | 7217 | 4331 |
| **Canaccord Genuity Corp. ITF Violetta Holdings Ltd.** | 136.0 | 2100 | 1260 |
| **Canaccord Genuity Corp. ITF VJMH Holdings Inc.** | 137.0 | 21651 | 12991 |
| **Canaccord Genuity Corp. ITF Water Street Assets Inc.** | 138.0 | 36085 | 21651 |
| **Canaccord Genuity Corp. ITF William Ferreira** | 99.0 | 7217 | 4331 |
| **Canaccord Genuity Corp. ITFDouglas Hunter & Christine Schuh** | 99.0 | 14434 | 8661 |
| **Canaccord Genuity Corp. Ursula Ulrich & Thomas JTWROS** | 99.0 | 3543 | 2126 |
| **CANNON BRIDGE CAPITAL CORP.** | 139.0 | 48590 | 29154 |
| **CAROL TOWNSEND** |  | 21660 | 12996 |
| **CARSON LEVIT TR LEVIT FAMILY REVOCABLE TRUST** |  | 2124 | 1275 |
| **CARSON TING** |  | 578 | 347 |
| **CATHERINE SHEARON** |  | 51 | 31 |
| **CDS & CO** | 140.0 | 20378 | 12227 |
| **CHAD MURRY** |  | 42 | 26 |
| **Charles E. Watson** |  | 14239 | 8544 |
| **CHRIS PARRY** |  | 434 | 261 |
| **CHRIS VETSCH** |  | 170 | 102 |
| **CHRISTIAN MUELLER** |  | 4353 | 2613 |
| **Christian Rupschus** |  | 1050 | 630 |
| **Christian Schoenfeld** |  | 2887 | 1733 |
| **CHRISTINE A CHARLES** |  | 15 | 9 |
| **CHRISTOPH KNUTTEL** |  | 2202 | 1322 |
| **Christopher Backus** | 99.0 | 3543 | 2126 |
| **CHRISTOPHER CAIAZZO** |  | 4332 | 2600 |
| **CHRISTOPHER RICCELLI** |  | 116 | 70 |
| **Christopher Schmidt** |  | 657 | 395 |
| **CHRISTOPHER TAYLOR** |  | 137 | 137 |
| **CI Investment Services Inc. ITF Jeffrey Gerstein A/C 229-01246-23** | 141.0 | 17977 | 10787 |
| **CLARK COLBY** |  | 361 | 217 |
| **CLEM ANZ JR** |  | 24 | 15 |
| **CLIFF ROBER** |  | 361 | 217 |
| **COLE WOLTERMAN** |  | 28880 | 17328 |

---

---

| | | | |
|:---|:---|:---|:---|
| **CONNIE PARKER** |  | 1191 | 716 |
| **COREY MCGILL** |  | 34 | 21 |
| **CORINNE WOLTERMAN** |  | 28880 | 17328 |
| **CORT HUGHES** |  | 299 | 180 |
| **CYNTHIA MARIE LOVE** |  | 61 | 37 |
| **DALE RAMBUR** |  | 116 | 70 |
| **DAMIEN LOWRY** |  | 11552 | 6932 |
| **DANIEL C FALLER TR THE DANIEL C FALLER LIVING TRUST DTD 08/29/11** | 142.0 | 217 | 131 |
| **Daniel J. McNellis and Jeanne Marie McNellis Revocable Trust Agreement Dated September 26, 2017** | 143.0 | 14178 | 8507 |
| **DANIEL M GREENE** |  | 37 | 23 |
| **DARA FELICE SEDAKA** |  | 44 | 27 |
| **DARRYL YEA** |  | 8664 | 5199 |
| **DARYL D. TAYLOR** |  | 73 | 44 |
| **DAVID DANKO** |  | 289 | 174 |
| **DAVID GODBER TR THE DAVID S GODBER TRUST** | 144.0 | 1444 | 867 |
| **DAVID IMSCHWEILER** |  | 289 | 174 |
| **DAVID INGRAM** |  | 29 | 18 |
| **DAVID KINGSLEY** |  | 73 | 44 |
| **DAVID NISSEN** |  | 44 | 27 |
| **DAVID SHIFFMAN** |  | 21 | 13 |
| **DEAN D PORTER** |  | 11 | 7 |
| **DEAN MAHER** |  | 183 | 110 |
| **DEAN MARTIN** | 97.0 | 73 | 44 |
| **DEAN MYLALSINGH** |  | 34 | 21 |
| **Dean Watt** |  | 6567 | 3941 |
| **DENA L HILTON** |  | 21660 | 12996 |
| **DENNIS GRAYSON** |  | 1035 | 622 |
| **DENNIS HOESGEN** |  | 2888 | 1733 |
| **DERRICK R KAUK** |  | 145 | 87 |
| **DIANA MARK** |  | 289 | 174 |
| **Dieter Anding** |  | 2100 | 1260 |
| **Dirk Heinrich** |  | 2887 | 1733 |
| **Dominic Schwoerer** |  | 1444 | 867 |
| **DON C. & SANDRA M. KERZEE** |  | 181 | 109 |
| **DORA COTTERELL** |  | 58 | 35 |
| **DOUG MARCH** |  | 9531 | 5719 |
| **DOUGLAS MILLS** |  | 289 | 174 |
| **Dr. Stefan Vollath** |  | 1444 | 867 |
| **EARL W. GRADEN** |  | 289 | 174 |
| **ED SCHUYLER** |  | 325 | 195 |
| **EDMUND G. SCHUYLER** |  | 1913 | 1149 |
| **EDOARDO MASSARO** |  | 34 | 21 |
| **EDWARD MORIN** |  | 2546 | 1529 |
| **EDWIN S TOPOREK** |  | 44 | 27 |
| **ELAINE LESLIE STRIDE** |  | 1986 | 1192 |
| **ELENA ANNA THEODORA VIKIS** |  | 434 | 261 |
| **ERIC HOESGEN** |  | 2888 | 1733 |
| **Exchange Listing** | 145.0 | 86420 | 86420 |
| **FANI M. ORDONEZ DE LA CRUZ** |  | 2527 | 1517 |
| **Felix Glueck** |  | 2100 | 1260 |
| **Fidelity Clearing Canada ITF 682501 Alberta Ltd.** | 146.0 | 7217 | 4331 |
| **Fidelity Clearing Canada ITF Justin Norbraten A/C H1H-SR00-E** | 147.0 | 3543 | 2126 |
| **FIDELITY CLEARING CANADA ULC ITF 2587557 ONTARIO INC** | 148.0 | 331 | 199 |
| **Fidelity Clearing Canada ULC ITF Andy Leuchter** | 147.0 | 3609 | 2166 |
| **Fidelity Clearing Canada ULC ITF Beacon Securities Ltd.** | 149.0 | 167 | 101 |
| **Fidelity Clearing Canada ULC ITF Beverly & Joseph Remai** | 150.0 | 1444 | 867 |
| **FIDELITY CLEARING CANADA ULC ITF GRIT CAPITAL ADVISORY INC.** | 151.0 | 321 | 193 |
| **FIDELITY CLEARING CANADA ULC ITF HYBRID FINANCIAL LTD.** | 152.0 | 337 | 203 |
| **Fidelity Clearing Canada ULC ITF Leonard & Laurie Kayter** | 150.0 | 1444 | 867 |

---

---

| | | | |
|:---|:---|:---|:---|
| **Fidelity Clearing Canada ULC ITF Monte Sheppard** | 150.0 | 1444 | 867 |
| **FIDELITY CLEARING CANADA ULC ITF WEST POINT FISHING LTD** | 153.0 | 321 | 193 |
| **FOLKLORE ENTERTAINMENT LLC** | 154.0 | 44 | 27 |
| **FOUNTAINHEAD MERCHANT BANCORP INC.** | 155.0 | 650 | 390 |
| **Frances Hackett** |  | 1444 | 867 |
| **FRANCES M SINGERY** |  | 48012 | 28808 |
| **FRANK BERRY** |  | 85 | 51 |
| **FRANK FINDLAY** |  | 18 | 11 |
| **Frank Frysiek** |  | 5637 | 3383 |
| **FRANK SCHRECK** |  | 73 | 44 |
| **FRED JOSEPH HERCULES** |  | 759 | 456 |
| **FRED KOLYBABA** |  | 48 | 29 |
| **Gaby Hofmann** |  | 1050 | 630 |
| **GARY DOUGLAS THRASH** |  | 44 | 27 |
| **GARY FEENER** |  | 12493 | 7497 |
| **GARY KELLY** |  | 5 | 3 |
| **GENEVIEVE ENTERPRISE CORP** | 156.0 | 331 | 199 |
| **GEOFF BALDERSON** |  | 3610 | 2166 |
| **Georg Chimkowski** |  | 2100 | 1260 |
| **GEORGE VAN VALKENBURG JR** |  | 1444 | 867 |
| **GERD REINIG** |  | 85 | 51 |
| **GINA SENESE** |  | 59 | 36 |
| **GLENN ADAMS** |  | 14887 | 8933 |
| **GOKHAN DURUST** |  | 2945 | 1768 |
| **GORDON CHIU** |  | 21660 | 12996 |
| **GRACE L. SURDIS** |  | 405 | 243 |
| **GRANT MAGDOVITZ** |  | 478 | 287 |
| **GREG CLOUGH** |  | 4332 | 2600 |
| **GREG PRUITT** |  | 722 | 434 |
| **Greggory Troy Nixon** |  | 2887 | 1733 |
| **Gregor Tanner** |  | 2362 | 1418 |
| **GREYSTONE CORPORATE SERVICES INC.** | 157.0 | 2166 | 1301 |
| **GundyCo ITF MARK PERTUISET OR SUSANNE GENSMANN** | 117.0 | 2887 | 1733 |
| **Gundyco TR Alkin Corporation** | 158.0 | 3543 | 2126 |
| **Gundyco TR Joseph N. Blinick** | 117.0 | 1444 | 867 |
| **GUNDYCO TR KANGARLOO CONSULTING INC** | 159.0 | 2100 | 1260 |
| **GUNDYCO TR ROGER ROGERS** | 117.0 | 642 | 386 |
| **H.T. MERIDIAN, LLC** | 160.0 | 37 | 23 |
| **Hannes Demske** |  | 788 | 473 |
| **HANS-JUERGEN THOMAS** |  | 1058 | 635 |
| **HARRY M RAPKIN** |  | 37 | 23 |
| **HARVEY KESNER** |  | 145 | 87 |
| **HAYWOOD SECURITIES INC TR KIMBLE O MOONEY** | 161.0 | 145 | 87 |
| **HAYWOOD SECURITIES INC.** | 162.0 | 3899 | 2340 |
| **Haywood Securities Inc. ITF Anders Nerell** | 161.0 | 7217 | 4331 |
| **Haywood Securities Inc. ITF Asad Sheikh** | 161.0 | 2887 | 1733 |
| **Haywood Securities Inc. ITF Carsten Jobs** | 161.0 | 2100 | 1260 |
| **Haywood Securities Inc. ITF Erick Factor** | 161.0 | 5774 | 3465 |
| **Haywood Securities Inc. ITF Gerion Weber** | 161.0 | 1444 | 867 |
| **Haywood Securities Inc. ITF Jens Lion** | 161.0 | 1444 | 867 |
| **Haywood Securities Inc. ITF Lidia Glinskaya** | 161.0 | 4987 | 2993 |
| **Haywood Securities Inc. ITF Mark T McGinnis** | 161.0 | 2100 | 1260 |
| **Haywood Securities Inc. ITF Mazhar Sheikh** | 161.0 | 4331 | 2599 |
| **Haywood Securities Inc. ITF Merohiry Ontario Ltd.** | 163.0 | 2887 | 1733 |
| **Haywood Securities Inc. ITF Ryan Walsh** | 161.0 | 4331 | 2599 |
| **Haywood Securities Inc. ITF Sausilito Ltd.** | 164.0 | 4331 | 2599 |
| **Haywood Securities Inc. ITF Veronica Van Wollen** | 161.0 | 1444 | 867 |
| **Haywood Securities Inc. Malte Philipp Muenchert** | 161.0 | 1706 | 1024 |
| **Haywood Securities Inc. Thomas Vetter** | 161.0 | 3543 | 2126 |

---

---

| | | | |
|:---|:---|:---|:---|
| **HENRY SOENNEKER** |  | 29 | 18 |
| **HERBERT M BERNSTEIN &** |  | 73 | 44 |
| **HOLLY L SINGH** |  | 67 | 41 |
| **HOWARD G BRAVERMAN** |  | 55 | 33 |
| **HT HOLDINGS** | 165.0 | 261743 | 159664 |
| **HUBERT H WILLER III** |  | 85 | 51 |
| **HUMBERTO COLLAZO** |  | 145 | 87 |
| **IAN ALLAN COBB** |  | 105 | 63 |
| **IAN DONALD** |  | 1011 | 607 |
| **ILIA KATIRAEE** |  | 161 | 97 |
| **IN THE ROOM MEDIA INC.** | 166.0 | 20579 | 12348 |
| **IN THE ROOM MEDIA INC.** | 166.0 | 1948 | 1948 |
| **Interactive Brokers UK Ltd TR Juergen Kneifel** | 167.0 | 10104 | 6063 |
| **INVESTOR COMPANY ITF 101049658 SASKATCHEWAN LTD** | 168.0 | 145 | 87 |
| **Investor Company ITF A/C 1HOYBAA Dominique Hussey** | 169.0 | 10760 | 6456 |
| **Investor Company ITF Chris Stewart A/C 7X8539-E** | 169.0 | 3543 | 2126 |
| **Investor Company ITF Daryl Pollock A/C 22RLW1A** | 169.0 | 3543 | 2126 |
| **INVESTOR COMPANY ITF DONNA JUBIN** | 169.0 | 240 | 144 |
| **IRVIN GERLING** |  | 15 | 9 |
| **IVAN KMECKO** |  | 650 | 390 |
| **JACK R ALBRIGHT** |  | 37 | 23 |
| **JACK ROSS** |  | 1018 | 611 |
| **JACK SCHNEIDER** |  | 145 | 87 |
| **JACQUELINE YAMPOLSKY** |  | 7220 | 4332 |
| **JAMES BIZZIERI** |  | 258 | 155 |
| **JAMES DOUGLAS BENSON** |  | 1191 | 716 |
| **JAMES H CHANG** |  | 273 | 164 |

---

---

| | | | |
|:---|:---|:---|:---|
| **James L Chaput & Janice D Chaput** |  | 2345 | 1407 |
| **JAMES L WHITE &** |  | 54 | 33 |
| **JAMES L. CHAPUT AND JANICE D. CHAPUT** |  | 7220 | 4332 |
| **JAMES RHODE TR** | 171.0 | 116 | 70 |
| **JAMES ZUCCHERO** |  | 361 | 217 |
| **JAMIE BERNER** |  | 65 | 39 |
| **JAMIE GOLDSTEIN** |  | 6827 | 4097 |
| **JAMIE GOLDSTEIN** | 246.0 | 133441 | 133441 |
| **JAN MOIR** |  | 63 | 38 |
| **JANET K CROPPER** |  | 34 | 21 |
| **JARON BROWNE** |  | 33 | 20 |
| **JASON MOCH** |  | 145 | 87 |
| **JEFF CURRAN** |  | 145 | 87 |
| **Jens Stelzer** |  | 657 | 395 |
| **JERET BODE** |  | 434 | 261 |
| **JERRY JOOS** |  | 434 | 261 |
| **JERRY MINNI** |  | 1156 | 694 |
| **JIMMY RYAN** |  | 13 | 8 |
| **JOAN HALEY** |  | 80 | 48 |
| **Jochen Elsner** |  | 919 | 552 |
| **Joe Alvarez** |  | 165 | 99 |
| **JOE L ALVAREZ** |  | 253 | 152 |
| **JOEL PRUZANSKY** |  | 102 | 62 |
| **Johannes Anetsberger** |  | 657 | 395 |
| **JOHN BAT** |  | 578 | 347 |
| **JOHN CUMMINGS** |  | 10830 | 6498 |
| **JOHN DUKE BUTLER** |  | 340 | 204 |
| **JOHN HAY** |  | 73 | 44 |
| **JOHN MCNEILAGE** |  | 33 | 20 |
| **JOHN SINGERA** |  | 145 | 87 |
| **JOHNNIE & EDDIE MAE BARRON-SMITH** |  | 361 | 217 |
| **Jorg Kalble** |  | 1444 | 867 |
| **JOSEPH A CROPPER** |  | 37 | 23 |
| **JOSEPH S. HINCKLEY JR.** |  | 58 | 35 |
| **JOYCE C MUNNINGS** |  | 53 | 32 |
| **JUAN FIGUERAS** |  | 665 | 399 |
| **JUDY MCKENZIE** |  | 5 | 3 |
| **Julian Buck** |  | 788 | 473 |
| **Jurgen Alps** |  | 1444 | 867 |
| **KADENWOOD CAPITAL CORP** | 173.0 | 2888 | 1733 |
| **KADENWOOD DEVELOPMENT CORP.** | 174.0 | 21371 | 12823 |
| **KADENWOOD VENTURES CORP** | 175.0 | 8087 | 4853 |
| **KAREN WONG** |  | 34 | 21 |

---

---

| | | | |
|:---|:---|:---|:---|
| **KARL A. DOWNER** |  | 253 | 152 |
| **Karl Kiesl** |  | 2100 | 1260 |
| **KARSTEN KLUG** |  | 1079 | 648 |
| **KATHERINE CAISSIE** |  | 34 | 21 |
| **KATHY MCKEEVER** |  | 2166 | 1300 |
| **KEITH ANDREW BALL** |  | 1191 | 716 |
| **KEITH ELLIOTT STRIDE** |  | 9747 | 5849 |
| **KELLEEN R. TAYLOR** |  | 34656 | 20794 |
| **KEN TOWNSEND** |  | 947 | 569 |
| **Kenneth Kwok Wah Liu** |  | 7217 | 4331 |
| **KEVIN HUBER** |  | 299 | 180 |
| **KEVIN JACOBS** |  | 87 | 53 |
| **KEVIN MCBRIDE** |  | 361 | 217 |
| **KEVIN THOMPSON** |  | 434 | 261 |
| **KORAMO LIMITED** | 176.0 | 867 | 521 |
| **KYLE GULLICKSON** |  | 1444 | 867 |
| **LAFTR.MOV** |  | 1909 | 1909 |
| **LAMAR E LOVE** |  | 81 | 49 |
| **LARRY EDWARD CRAVEN** |  | 145 | 87 |
| **LARRY REID** |  | 722 | 434 |
| **LARRY TAYLOR** |  | 361 | 217 |
| **LARRY WATSON** |  | 777 | 467 |
| **Lars Schoenyan** |  | 2100 | 1260 |
| **Lars Stern** |  | 1444 | 867 |
| **LAURA H. BAILEY** |  | 145 | 87 |
| **LAURA WASILENKOFF** |  | 1444 | 867 |
| **LAURENTIAN BANK SECURITIES INC ITF 7SAAJE4 ANAT BENEDICT** | 177.0 | 323 | 194 |
| **Laurentian Bank Securities ITF Robert Wineberg A/C 2HATAE2** | 177.0 | 28868 | 17321 |
| **LAWRENCE SIEGEL** |  | 867 | 521 |
| **Leede Financial Inc. ITF Doug Hawkes** | 170.0 | 919 | 552 |
| **Leede Financial Inc. ITF Jack Ross** | 170.0 | 2887 | 1733 |
| **Leede Financial Inc. ITF Joe David Voisin** | 170.0 | 2100 | 1260 |
| **Leede Financial Inc. ITF Paige Slezak** | 170.0 | 3543 | 2126 |
| **Leede Financial Inc. ITF Russel Fuhrer** | 170.0 | 2100 | 1260 |
| **Leede Financial Inc. ITF Sanit Chanhao** | 170.0 | 42908 | 25745 |
| **LEEDE JONES GABLE INC.** | 178.0 | 1197 | 719 |
| **LEG HOLDINGS INC** | 179.0 | 44 | 27 |
| **LEIGHTON BOCKING** |  | 12852 | 7712 |
| **LELAND L BAKER JR TR LELAND L BAKER JR TRUST DATED 1-9-92** | 180.0 | 116 | 70 |
| **LES CASDEN** |  | 52 | 32 |
| **LESTER WINOGRADE** |  | 44 | 27 |
| **LEVEL 3 CAPITAL MANAGEMENT INC.** | 181.0 | 28302 | 16982 |
| **LINDA BARGSLEY LINDBURG** |  | 217 | 131 |

---

---

| | | | |
|:---|:---|:---|:---|
| **LISA K HASTINGS** |  | 58 | 35 |
| **LISA MORGAN** |  | 2311 | 1387 |
| **Lynx BV Germany Branch (Carsten Schulz)** | 182.0 | 2100 | 1260 |
| **Lynx BV Germany Branch (Klaus Schulz)** | 182.0 | 2100 | 1260 |
| **MADISON ADAM** |  | 434 | 261 |
| **Malte Viering** |  | 1444 | 867 |
| **Manfred Geiss** |  | 1444 | 867 |
| **Manuel Arlt** |  | 919 | 552 |
| **MARC DOLAN** |  | 67 | 41 |
| **MARCUS A M BELL** |  | 46 | 28 |
| **MARCUS WILLIAMS** |  | 145 | 87 |
| **Margit Jacobeit** |  | 657 | 395 |
| **MARIA GUTIERREZ-GALEANO** |  | 434 | 261 |
| **Marius Frassek** |  | 1444 | 867 |
| **Mark Hussmann** |  | 1444 | 867 |
| **MARK KUHN** |  | 180 | 109 |
| **MARK VANRY** |  | 9818 | 5892 |
| **Markus Krank** |  | 2100 | 1260 |
| **MARTIN DEANE CHEATHAM JR TR DEANE CHEATHAM LIVING TRUST** | 183.0 | 58 | 35 |
| **Martin Kuse** |  | 788 | 473 |
| **MARTIN NICHOLSON** |  | 2978 | 1787 |
| **Martin Scott** |  | 103 | 103 |
| **Martin von Majowski** |  | 657 | 395 |
| **MARY BRACKENHOFF** |  | 299 | 180 |
| **MARY CECELIA RITZ** |  | 43 | 26 |
| **MARY MARTHA EDWARDS** |  | 43 | 26 |
| **MATTHEW COBB** |  | 109 | 66 |
| **MATTHEW ECKERMANN** |  | 111 | 67 |
| **MATTHEW J DONOVAN** |  | 361 | 217 |
| **Matthias Blume** |  | 7217 | 4331 |
| **Matthias Bornitz** |  | 1575 | 945 |
| **Matthias Frenzel** |  | 2494 | 1497 |
| **Matthias Limberg** |  | 1181 | 709 |
| **Matthias Woock** |  | 2100 | 1260 |
| **MAUDO MASSARO** |  | 34 | 21 |
| **MAURICE RUST** |  | 37 | 23 |
| **Maximilian Ruth** |  | 1706 | 1024 |
| **MAXIMILIAN SALI** |  | 578 | 347 |
| **MCGILLIGAN BARRY INVESTMENTS LTD** | 184.0 | 643 | 386 |
| **MEDFORD ROOSEVELT COSNER JR & KATHLEEN ANN COSNER JT TEN** |  | 22 | 14 |
| **MEGA DEALER LLC** | 185.0 | 1156 | 694 |
| **MICHAEL CLIFFORD DUSSAULT** |  | 85 | 51 |
| **MICHAEL D KAYS** |  | 87 | 53 |
| **MICHAEL D TRIPP** |  | 803 | 482 |
| **MICHAEL F MUNNINGS** |  | 15 | 9 |
| **Michael Georgii** |  | 657 | 395 |

---

---

| | | | |
|:---|:---|:---|:---|
| **MICHAEL JOHN FIGURA** |  | 15 | 9 |
| **MICHAEL KERKHOF** |  | 289 | 174 |
| **MICHAEL KLINE** |  | 31548 | 18930 |
| **MICHAEL MAGA** |  | 22 | 14 |
| **MICHAEL MCMANUS** |  | 81 | 49 |
| **MICHAEL MILLS** |  | 434 | 261 |
| **MICHAEL MOORE** |  | 289 | 174 |
| **MICHAEL ROTHER** |  | 2202 | 1323 |
| **Michael Sailer** |  | 1050 | 630 |
| **MICHAEL THIBAULT** |  | 867 | 521 |
| **MICHAEL TOWNSEND** |  | 17786 | 10672 |
| **MICHAEL YAMPOLSKY** |  | 7220 | 4332 |
| **MICHAELYN SHELLEY-DAVID** |  | 44 | 27 |
| **MITCH MEADOWS** |  | 240 | 145 |
| **MRS VICTORIA E PATTERSON** |  | 145 | 87 |
| **Mustafa Yikilmaz** |  | 2100 | 1260 |
| **MYLES A SEMAN** |  | 58 | 35 |
| **National Bank Financial Inc ITF Jack Agrios A/C 05JUCGE** | 172.0 | 14434 | 8661 |
| **NATIONAL BANK FINANCIAL INC TR 1130065 BC LTD A/C 37KG72A** | 186.0 | 145 | 87 |
| **NATIONAL BANK FINANCIAL INC TR AL MURRAY A/C 38A4BWA** | 172.0 | 97 | 59 |
| **NATIONAL BANK FINANCIAL INC TR ALAN & ANITA KELLER A/C 38A5VFA** | 172.0 | 321 | 193 |
| **NATIONAL BANK FINANCIAL INC TR ALEXANDER HARPER A/C 38F4FWA** | 172.0 | 49 | 30 |
| **NATIONAL BANK FINANCIAL INC TR AURELA MELHADO A/C 37YK26A** | 172.0 | 64 | 39 |
| **NATIONAL BANK FINANCIAL INC TR BARRY LARSON A/C 2R9262E** | 172.0 | 5054 | 3033 |
| **NATIONAL BANK FINANCIAL INC TR BMN KEEN ENTERPRISES A/C 37MW31A** | 187.0 | 297 | 179 |
| **NATIONAL BANK FINANCIAL INC TR BRADLEY MCLEAN A/C 38ZDX6A** | 172.0 | 321 | 193 |
| **NATIONAL BANK FINANCIAL INC TR BRIAN KRUSE A/C 38A51QA** | 172.0 | 97 | 59 |
| **NATIONAL BANK FINANCIAL INC TR CELESTE VIDAL A/C 38A6WMA** | 172.0 | 49 | 30 |
| **NATIONAL BANK FINANCIAL INC TR CRAIG TAYLOR A/C 38FK7VA** | 172.0 | 52 | 32 |
| **NATIONAL BANK FINANCIAL INC TR DALE MILLER A/C 38Z9D2A** | 172.0 | 65 | 39 |
| **NATIONAL BANK FINANCIAL INC TR DAN DUVALL A/C 37FQA4A** | 172.0 | 129 | 78 |
| **NATIONAL BANK FINANCIAL INC TR DAVID ELLIOTT A/C 42XDCDA** | 172.0 | 145 | 87 |
| **NATIONAL BANK FINANCIAL INC TR DAVID HUXLEY A/C 38DNLQA** | 172.0 | 129 | 78 |
| **NATIONAL BANK FINANCIAL INC TR DOUG VENABLES A/C 4EH181E** | 172.0 | 650 | 390 |
| **NATIONAL BANK FINANCIAL INC TR ERIC PATTERSON A/C 37MJ4WE** | 172.0 | 145 | 87 |
| **NATIONAL BANK FINANCIAL INC TR EVE ABRAMS A/C 38F3BDA** | 172.0 | 193 | 116 |
| **NATIONAL BANK FINANCIAL INC TR G SCOTT PATERSON A/C 37YL19A** | 172.0 | 321 | 193 |
| **NATIONAL BANK FINANCIAL INC TR GEORGE ADAMS A/C 37JL18A** | 172.0 | 145 | 87 |
| **NATIONAL BANK FINANCIAL INC TR GLENN GRAY A/C 38ZQYNA** | 172.0 | 49 | 30 |
| **NATIONAL BANK FINANCIAL INC TR GORDON GRAHAM A/C 37MCF5A** | 172.0 | 48 | 29 |
| **NATIONAL BANK FINANCIAL INC TR JEFFREY YORK A/C 42XC8HA** | 172.0 | 333 | 200 |
| **NATIONAL BANK FINANCIAL INC TR JERET BODE A/C 4EE456E** | 172.0 | 48 | 29 |
| **NATIONAL BANK FINANCIAL INC TR JOHN J NANOS A/C 42XC06A** | 172.0 | 145 | 87 |
| **NATIONAL BANK FINANCIAL INC TR KATHLEEN MCKINNELL A/C 38CYDNA** | 172.0 | 129 | 78 |
| **NATIONAL BANK FINANCIAL INC TR KEVIN HAAKENSEN A/C 38EDFLE** | 172.0 | 65 | 39 |
| **NATIONAL BANK FINANCIAL INC TR KEVIN MCROBERTS A/C 38GFR3A** | 172.0 | 49 | 30 |
| **NATIONAL BANK FINANCIAL INC TR KEVIN THOMPSON A/C 4EE498A** | 172.0 | 52 | 32 |
| **NATIONAL BANK FINANCIAL INC TR KIRK SHAW A/C 37ML2RA** | 172.0 | 333 | 200 |
| **NATIONAL BANK FINANCIAL INC TR LINDA BOVER A/C 37HAT3A** | 172.0 | 64 | 39 |
| **NATIONAL BANK FINANCIAL INC TR LOIS WIENS A/C 4EH162A** | 172.0 | 650 | 390 |
| **NATIONAL BANK FINANCIAL INC TR MALCOLM BUKENBERGER A/C 37HAQYA** | 172.0 | 174 | 105 |

---

---

| | | | |
|:---|:---|:---|:---|
| **NATIONAL BANK FINANCIAL INC TR MARIA LEOCZKO A/C 38F2U2A** | 172.0 | 161 | 97 |
| **National Bank Financial Inc TR MARY TURNBULL A/C 6CPWB9A** | 172.0 | 64952 | 38972 |
| **NATIONAL BANK FINANCIAL INC TR NIKITA JAMES NANOS A/C 42XC07A** | 172.0 | 145 | 87 |
| **NATIONAL BANK FINANCIAL INC TR RANDY BOUDOT A/C 38CUJ8A** | 172.0 | 49 | 30 |
| **NATIONAL BANK FINANCIAL INC TR ROBERT & PATRICIA CUTTRISS A/C 38DWH7A** | 172.0 | 65 | 39 |
| **National Bank Financial Inc TR Robert Becker A/C 3C8VSFA** | 172.0 | 1444 | 867 |
| **NATIONAL BANK FINANCIAL INC TR ROBIN RAISTRICK A/C 42XDAFA** | 172.0 | 195 | 117 |
| **NATIONAL BANK FINANCIAL INC TR RODNEY KOCH A/C 4EH110E** | 172.0 | 48 | 29 |
| **NATIONAL BANK FINANCIAL INC TR RONALD MCDONOUGH A/C 38BC2HA** | 172.0 | 65 | 39 |
| **NATIONAL BANK FINANCIAL INC TR STEVE BRADBURY A/C 38CB9QA** | 172.0 | 129 | 78 |
| **NATIONAL BANK FINANCIAL INC TR STEVE NICKS A/C 38AB90A** | 172.0 | 65 | 39 |
| **National Bank Financial Inc TR Susan Clark & Daniel Noonan JTWROS** | 172.0 | 1444 | 867 |
| **NATIONAL BANK FINANCIAL INC TR THE HESHAM OSMAN FAMILY TRUST A/C 37MBCDA** | 188.0 | 203 | 122 |
| **NATIONAL BANK FINANCIAL INC TR THOMAS DAVIS & DEBORAH KEENLEYSIDE A/C 38BXAWA** | 172.0 | 65 | 39 |
| **NATIONAL BANK FINANCIAL INC TR TREVOR DILWORTH & BARBARA DILWORTH A/C 38C0Z8A** | 172.0 | 58 | 35 |
| **NATIONAL BANK FINANCIAL INC TR VICTOR & DONNA LOUCKS A/C 38A88WA** | 172.0 | 129 | 78 |
| **NATIONAL BANK FINANCIAL INC. ITF 6C56Y9E GENEVIEVE ENTERPRISE CORP (32010M)** | 189.0 | 321 | 193 |
| **National Bank Financial Inc. ITF Deirdre Alaine Jenkins** | 172.0 | 3609 | 2166 |
| **National Bank Financial Inc. ITF Sprott Capital Partners LP A/C 41SEH0A** | 190.0 | 167 | 101 |
| **National Bank Financial TR Joel Chevrefils Professional Corp.** | 191.0 | 2100 | 1260 |
| **National Bank ITF 769644 Alberta Ltd.** | 192.0 | 3543 | 2126 |
| **National Bank ITF Ari Toderovitz** | 172.0 | 3543 | 2126 |
| **National Bank ITF Bill Fox** | 172.0 | 14434 | 8661 |
| **National Bank ITF Dean Buist** | 172.0 | 1444 | 867 |
| **National Bank ITF Frank J. Mueller** | 172.0 | 3543 | 2126 |
| **National Bank ITF Henry Reichert** | 172.0 | 3543 | 2126 |
| **National Bank ITF Ilie Onulov** | 172.0 | 4331 | 2599 |
| **National Bank ITF Joe Stewart** | 172.0 | 3543 | 2126 |
| **National Bank ITF Linda Brown** | 172.0 | 3543 | 2126 |
| **National Bank ITF Timothy Walsh** | 172.0 | 14434 | 8661 |
| **National Bank ITF Zenith Appraisal & Land Consulting Ltd.** | 193.0 | 21651 | 12991 |
| **Nauras Hasan** |  | 2100 | 1260 |
| **NBF ITF 4EM006A Industrial Alliance Securities Inc. (89371M)** | 194.0 | 63 | 38 |
| **NELSON FAMILY LIVING TRUST DATED 9/13/20** |  | 722 | 434 |
| **NESBITT BURNS ITF CD PRODUCTIONS INC AC# 645-04057-14** | 195.0 | 1083 | 650 |
| **NESBITT BURNS ITF CRAIG BRENNAN AC# 645-03977-13** | 76.0 | 578 | 347 |
| **NESBITT BURNS ITF DONALD MCINNES AC# 645-04145-26** | 76.0 | 145 | 87 |
| **NESBITT BURNS ITF MARK E HEWETT AC# 645-03643-25** | 76.0 | 1156 | 694 |
| **NESBITT BURNS ITF MICHAEL TRIPP AC# 275-10051-21** | 76.0 | 963 | 578 |
| **NESBITT BURNS ITF MICHAEL TRIPP AC# 645-03939-28U** | 76.0 | 1156 | 694 |
| **NESBITT BURNS TR CHURCH STREET STEAKHOUSE AND PUB INC A/C 275-08954-23** | 196.0 | 347 | 209 |
| **NESBITT BURNS TR SEAMUS O'BYRNE A/C 275-09124-26** | 76.0 | 1444 | 867 |

---

---

| | | | |
|:---|:---|:---|:---|
| **Niche Investor Services** | 197.0 | 48 | 29 |
| **NICHOLAS J. CASTORIA** |  | 867 | 521 |
| **NICOLE CLOUGH** |  | 7220 | 4332 |
| **NIROZ AL-MOZAHID** |  | 289 | 174 |
| **NOREEK DAVITIAN** |  | 145 | 87 |
| **NORTH EQUITIES CORP** | 198.0 | 2676 | 1606 |
| **NUNZIO GUERRIERO** |  | 174 | 105 |
| **Oran Rafael Dorel** |  | 10760 | 6456 |
| **PACER CAPITAL CORP** | 199.0 | 289 | 174 |
| **PAMELA S. WOLTERMAN** |  | 50539 | 30324 |
| **PANG-YUAN NICOLE CHANG** |  | 43 | 26 |
| **Paolo D'Rossi** |  | 974 | 585 |
| **Patrick Baumann** |  | 1444 | 867 |
| **Patrick Mildner** |  | 1050 | 630 |
| **PATRICK TERENCE MCALLISTER** |  | 65 | 39 |
| **PAUL HEAL** |  | 14738 | 8843 |
| **PAUL J. HEAL** |  | 3610 | 2166 |
| **PAUL LEGER** |  | 44 | 27 |
| **PAUL MACNEILL** |  | 130 | 78 |
| **PAUL QUILKEY** |  | 5487 | 3293 |
| **Paul Wachtel** |  | 788 | 473 |
| **PEISES CORP.** | 200.0 | 191832 | 191442 |
| **PETER A. FEIFEL PROFESSIONAL CORPORATION** | 201.0 | 7535 | 4522 |
| **PETER CONNOLLY** |  | 299 | 180 |
| **Peter Schuessler** |  | 657 | 395 |
| **PETER SMITH** |  | 390 | 234 |
| **Petr Cerny** |  | 2100 | 1260 |
| **PHILIP KUZYK** |  | 1444 | 867 |
| **Philipp Malleier** |  | 1575 | 945 |
| **Philipp Weidner** |  | 1050 | 630 |
| **Philipp Welle** |  | 919 | 552 |
| **PLACEMENTS ALAIN LEMAY INC** | 202.0 | 14440 | 8664 |
| **PLAYGROUND MEDIA INC.** | 203.0 | 1733 | 1041 |
| **PRADEEP K VOHORA** |  | 73 | 44 |
| **Rachel A. Miller** | 246.0 | 205000 | 164000 |
| **Ralf Iwan** |  | 2887 | 1733 |
| **Ralf Soukup** |  | 1050 | 630 |
| **Ralf Wagner** |  | 7217 | 4331 |
| **RATHERBY INVESTMENTS LLC** | 204.0 | 262 | 158 |
| **RAYMOND CHRISTIAN** |  | 1805 | 1083 |
| **RBC Dominion Securities Inc. ITF Daniel Kokan A/C 463-62746-17** | 205.0 | 5249 | 3150 |
| **RBC INVESTOR SERVICES TRUST TR A/C 176027007** | 206.0 | 2571 | 1543 |
| **REIDAR ANDERSON** |  | 87 | 53 |
| **Reiner Seitz** |  | 1050 | 630 |
| **RESEARCH CAPITAL CORP TR DARYL JAMBRICH AC 31AK66A** | 207.0 | 73 | 44 |
| **Research Capital Corp. ITF Michael Sadhra** | 207.0 | 2887 | 1733 |
| **Reto Glaus** |  | 1444 | 867 |
| **REX WOLTERMAN** |  | 867 | 521 |
| **RICHARD ALAN KALISCH** |  | 128 | 77 |
| **RICHARD JACKSON** |  | 67 | 41 |
| **RICHARD KURTZ** |  | 45181 | 27109 |
| **RICHARD MARIEN** |  | 58 | 35 |
| **RICHARD SAMOLEWICZ &** |  | 73 | 44 |
| **RICHARD STRETTON** |  | 376 | 226 |
| **Rico Potzscher** |  | 657 | 395 |

---

---

| | | | |
|:---|:---|:---|:---|
| **ROBERT BAST** |  | 885 | 531 |
| **Robert Berger** |  | 2100 | 1260 |
| **ROBERT DOWLING** |  | 660 | 397 |
| **ROBERT FENTY** |  | 1426 | 856 |
| **ROBERT GREENHOW** |  | 425 | 255 |
| **ROBERT HALPIN** |  | 361 | 217 |
| **ROBERT IRVIN PEDIGO** |  | 182 | 110 |
| **ROBERT J POLVERE** |  | 73 | 44 |
| **ROBERT KIRSTIUK** |  | 867 | 521 |
| **ROBERT SOLKNER** |  | 2916 | 1751 |
| **ROBYN JENNER** |  | 34 | 21 |
| **RODNEY WOLTERMAN** |  | 35948 | 21570 |
| **Roland Raddatz** |  | 2100 | 1260 |
| **RONALD KOHLER** |  | 2600 | 1560 |
| **RONALD KOLMAN &** |  | 650 | 390 |
| **ROSS WESTBROOK** |  | 6461 | 3878 |
| **ROYTOR & CO** | 208.0 | 2086 | 1252 |
| **RSD CAPITAL CORP.** | 209.0 | 2383 | 1430 |
| **RUBEN G SOTO** |  | 471 | 283 |
| **Ruben Soto** |  | 3518 | 2111 |
| **RUSTY SCHMIDT** |  | 542 | 326 |
| **SAFAK SUBASI** |  | 145 | 87 |
| **Samuel Vogrin** |  | 2100 | 1260 |
| **SANDRA FERRARI** |  | 44 | 27 |
| **SARWAT ANSARI** |  | 8736 | 5242 |
| **SCOTIA CAPITAL INC TR LIL TONMYR** | 210.0 | 145 | 87 |
| **SCOTIA CAPITAL INC. ITF ALAIN D BOURASSA PROFESSIONAL CORP.** | 211.0 | 304 | 183 |
| **Scotia Capital Inc. ITF Christine A. Cassidy 467-36607-28** | 210.0 | 5774 | 3465 |
| **Scotia Capital Inc. ITF Dean Martin** | 210.0 | 1444 | 867 |
| **Scotia Capital Inc. ITF Tristan M. Sawtell 444-92952-21** | 210.0 | 7217 | 4331 |
| **Scotia Capital Inc. ITF Warren Shing Ngai Tsoi 467-41904-28** | 210.0 | 1444 | 867 |
| **Scotia Capital Inc. TR LORENA GAYMES A/C 825-41886-11** | 210.0 | 1444 | 867 |
| **Scotia Capital ITF Denis E. Walker 467-43604-27** | 210.0 | 4331 | 2599 |
| **SCOTT BOUGHEY** |  | 6926 | 4156 |
| **Seamus Byrne** |  | 4331 | 2599 |
| **Sebastian Evers** |  | 2887 | 1733 |
| **Sebastian Schwab** |  | 1444 | 867 |
| **Sebastian Strohmayer** |  | 1706 | 1024 |
| **SERGEY GADAYEV** |  | 102 | 62 |
| **SETH KALYAN** |  | 289 | 174 |
| **SEVEN SEVEN SEVEN HOLDINGS LTD** | 212.0 | 400 | 240 |
| **SHARON SAVOIE** |  | 34 | 21 |
| **SHEILA LOVE** |  | 9 | 6 |
| **SHINICHI HIRABAYASHI** |  | 217 | 131 |
| **SHIRLEY CHEN** |  | 217 | 131 |
| **SICHENZIA ROSS FERENCE CARMEL** | 213.0 | 90000 | 90000 |
| **SIDDHARTHA SENROY** |  | 18050 | 10831 |
| **SIENAG HOLDINGS LLC** | 214.0 | 145 | 87 |
| **Simon Gaschler** |  | 1838 | 1103 |
| **SINEAD DOLAN** |  | 67 | 41 |
| **SKYE CORPORATE HOLDINGS, INC.** | 215.0 | 2527 | 1517 |
| **SKYVIEW CORP** | 216.0 | 218119 | 139597 |
| **SOCKY MAILA** |  | 33 | 20 |
| **SPECTRE CAPITAL CORP.** | 217.0 | 28880 | 17328 |
| **SPECTRE INVESTMENTS INC.** | 218.0 | 10830 | 6498 |
| **STANLEY S MALIN** |  | 102 | 62 |

---

---

| | | | |
|:---|:---|:---|:---|
| **Stefan Arnst** |  | 4331 | 2599 |
| **Stefan Gottschalk** |  | 1444 | 867 |
| **Stefan Lesenberg** |  | 2887 | 1733 |
| **Stefan Nigischer** |  | 1050 | 630 |
| **Stefanie Pfefferle** |  | 2887 | 1733 |
| **STEPHEN BARNES** |  | 289 | 174 |
| **STEPHEN GILLIS** |  | 34 | 21 |
| **Stephen Saterbo** |  | 7066 | 4240 |
| **Steve Payne** |  | 235 | 141 |
| **STEVEN PAUL SZARKA** |  | 145 | 87 |
| **STEVEN PAYNE** |  | 361 | 217 |
| **STEVEN STEWART** |  | 304 | 183 |
| **STEVEN W. & DIANE M. LEE** |  | 181 | 109 |
| **STOCKHOUSE PUBLISHING LTD.** | 219.0 | 954 | 573 |
| **STUART ROSS** |  | 867 | 521 |
| **Sukhbinder Dhami** |  | 4331 | 2599 |
| **SUNEETH PATWARI** |  | 44 | 27 |
| **SUSAN HEATHCOTE** |  | 2311 | 1387 |
| **Susie Low** | 220.0 | 1444 | 867 |
| **Sven Hanisch** |  | 2100 | 1260 |
| **TD AMERITRADE TR GLEN G FRANK A/C 492677001** | 221.0 | 128 | 77 |
| **TED COOPERSMITH** |  | 73 | 44 |
| **TED CROFTS** |  | 335 | 202 |
| **Terra Capital Emerging Companies Fund Pty Ltd** | 222.0 | 72169 | 43302 |
| **THE IRA CLUB F/B/O PATRICK H. RYAN, JR. IRA 2000092** | 223.0 | 57759 | 34656 |
| **Theodor Strein Soehne Holding GmbH** | 224.0 | 4331 | 2599 |
| **THOMAS A REINHART** |  | 58 | 35 |
| **THOMAS GIOSEFFI** |  | 284 | 171 |
| **THOMAS HINRICHS** |  | 29 | 18 |
| **Thomas Huber** |  | 1050 | 630 |
| **THOMAS JAMES FRANCIOSA** |  | 85 | 51 |
| **Thomas Reuther** |  | 657 | 395 |
| **Thomas Stacher** |  | 4331 | 2599 |
| **THOMAS TROFE** |  | 44 | 27 |
| **TIMOTHY BESAW** |  | 1191 | 716 |
| **Title3** |  | 2485 | 2485 |
| **TOMMY BAILEY & JOYCE BAILEY JT TEN** |  | 15 | 9 |
| **TORO PACIFIC MANAGEMENT INC** | 225.0 | 2239 | 1344 |
| **TRACY DOMINIC VIGIL IRA** |  | 11910 | 7146 |
| **TRAILER PARK BOYS INCORPORATED** | 226.0 | 14440 | 8665 |
| **TRAVIS ZIPPE** |  | 562 | 447 |
| **TREVOR TAYLOR** |  | 318 | 191 |
| **TYE CHADWICKE CARTER** |  | 145 | 87 |
| **TYRONE CLARK** |  | 76 | 46 |
| **Ulrich Leluschko** |  | 2231 | 1339 |

---

---

| | | | |
|:---|:---|:---|:---|
| **VALERIO MASSARO** |  | 34 | 21 |
| **VANCE G. DUNN** |  | 73 | 44 |
| **Ventum FINANCIAL CORP ITF 1135541 ALBERTA LTD** | 227.0 | 289 | 174 |
| **Ventum FINANCIAL CORP ITF NEIL TANNER** | 228.0 | 48 | 29 |
| **Ventum FINANCIAL CORP ITF THE ESTATE OF KELLY DEE MOROZ** | 228.0 | 289 | 174 |
| **Ventum FINANCIAL CORP TR YOEL ALTMAN** | 228.0 | 145 | 87 |
| **Ventum Financial Corp.** | 229.0 | 786 | 472 |
| **Ventum Financial Corp. IT Chris Mayerson** | 228.0 | 36085 | 21651 |
| **Ventum Financial Corp. ITF 383210 Alberta Ltd.** | 228.0 | 7217 | 4331 |
| **Ventum Financial Corp. ITF BeepsCo Ltd.** | 230.0 | 7217 | 4331 |
| **Ventum Financial Corp. ITF Brent Eshleman** | 228.0 | 3543 | 2126 |
| **Ventum Financial Corp. ITF Bronze Resources Ltd.** | 231.0 | 4987 | 2993 |
| **Ventum Financial Corp. ITF Broughdale Holdings Inc.** | 232.0 | 2887 | 1733 |
| **Ventum Financial Corp. ITF Bryan Angus** | 228.0 | 8661 | 5197 |
| **Ventum Financial Corp. ITF Bryan Henry** | 228.0 | 7217 | 4331 |
| **Ventum Financial Corp. ITF Candice Stephey** | 228.0 | 3543 | 2126 |
| **Ventum Financial Corp. ITF Capital Event Management** | 233.0 | 8661 | 5197 |
| **Ventum Financial Corp. ITF Chris Roth** | 228.0 | 2887 | 1733 |
| **Ventum Financial Corp. ITF Concept Capital Management Ltd.** | 234.0 | 7217 | 4331 |
| **Ventum Financial Corp. ITF Danny Quattrociocchi** | 228.0 | 3543 | 2126 |
| **Ventum Financial Corp. ITF David Jarvis** | 228.0 | 1444 | 867 |
| **Ventum Financial Corp. ITF David Peabody** | 228.0 | 11023 | 6614 |
| **Ventum Financial Corp. ITF Dona Klaiber** | 228.0 | 1444 | 867 |
| **Ventum Financial Corp. ITF Elizabeth Walters** | 228.0 | 3543 | 2126 |
| **Ventum Financial Corp. ITF Estate of Natalija Bajin** | 235.0 | 7217 | 4331 |
| **Ventum Financial Corp. ITF Gabriel Ko** | 228.0 | 1444 | 867 |
| **Ventum Financial Corp. ITF Gary Anderson** | 228.0 | 2887 | 1733 |
| **Ventum Financial Corp. ITF Grant Klaiber** | 228.0 | 2887 | 1733 |
| **Ventum Financial Corp. ITF James Shone** | 228.0 | 2100 | 1260 |
| **Ventum Financial Corp. ITF James Stewart** | 228.0 | 304 | 183 |
| **Ventum Financial Corp. ITF Joerg Schweizer** | 228.0 | 14434 | 8661 |
| **Ventum Financial Corp. ITF John Anderson** | 228.0 | 2887 | 1733 |
| **Ventum Financial Corp. ITF Li Zhu** | 228.0 | 3543 | 2126 |
| **Ventum Financial Corp. ITF Margaret Barron** | 228.0 | 3543 | 2126 |
| **Ventum Financial Corp. ITF Mark Macri** | 228.0 | 1444 | 867 |
| **Ventum Financial Corp. ITF Michael Senior** | 228.0 | 1444 | 867 |
| **Ventum Financial Corp. ITF Nedo Santarossa** | 228.0 | 5774 | 3465 |
| **Ventum Financial Corp. ITF Negar Adam** | 228.0 | 3543 | 2126 |

---

---

| | | | |
|:---|:---|:---|:---|
| **Ventum Financial Corp. ITF Peter Martini** | 228.0 | 14434.0 | 8661 |
| **Ventum Financial Corp. ITF Renee Garnett** | 228.0 | 2887.0 | 1733 |
| **Ventum Financial Corp. ITF Robert Sisti** | 228.0 | 3543.0 | 2126 |
| **Ventum Financial Corp. ITF Stephen Moore** | 228.0 | 7217.0 | 4331 |
| **Ventum Financial Corp. ITF Tanveer Ali** | 228.0 | 7217.0 | 4331 |
| **Ventum Financial Corp. ITF Terry Sklavenitis** | 228.0 | 2887.0 | 1733 |
| **Ventum Financial Corp. ITF Theodore Sklavenitis** | 228.0 | 1444.0 | 867 |
| **Ventum Financial Corp. ITF Weldwood Inc.** | 236.0 | 21651.0 | 12991 |
| **Ventum Financial Corp. TR 576112 B.C. Ltd.** | 237.0 | 7217.0 | 4331 |
| **Ventum Financial Corp. TR Bull Markets Media GmbH** | 238.0 | 7217.0 | 4331 |
| **Ventum Financial ITF 1824895 Alberta Ltd.** | 239.0 | 28868.0 | 17321 |
| **Ventum Financial ITF James Stewart** | 228.0 | 14434.0 | 8661 |
| **VINCENT A. TRIMBALI JR.** |  | 542.0 | 326 |
| **VIRGINIA JARAMILLO** |  | 181.0 | 109 |
| **VLADIMIR KUZIN** |  | 2888.0 | 1733 |
| **VLADISLAV YAMPOLSKY** | 246.0 | 115696.0 | 69419 |
| **WALTER JR. SCHWERDTFEGER** |  | 181.0 | 109 |
| **WALTER SCHWERDTFEGER** |  | 181.0 | 109 |
| **WATER STREET ASSETS INC.** | 240.0 | 7164.0 | 4299 |
| **WESTLAKE CONSULTING, LLC** | 241.0 | 130.0 | 78 |
| **WILLIAM BARBER** |  | 867.0 | 521 |
| **WILLIAM LEVIN** |  | 777.0 | 467 |
| **WILLIAM RAY BOREHAM TR W RAY AND MICHELINE BOREHAM LIVING TRUST** | 242.0 | 87.0 | 53 |
| **WILMOUTH H BAKER** |  | 29.0 | 18 |
| **Winfried Buerger** |  | 1444.0 | 867 |
| **WKN LLC** | 243.0 | 1444.0 | 867 |
| **Wolfgang Urmann** |  | 1706.0 | 1024 |
| **YOUNG STRATEGIES LTD** | 244.0 | 1011.0 | 607 |
| **ZAYN KALYAN** |  | 20579.0 | 12348 |
| **ZERO GRAVITY CAPITAL CORP.** | 245.0 | 578.0 | 347 |
| **Leonite Fund I, LP** | 246.0 |  | 4062500 |
| **KIPS BAY SELECT LP** | 247.0 |  | 2437500 |
| **Helena Global Investment Opportunities 1 Ltd.** | 248.0 |  | 1625000 |
| **FirstFire Global Opportunities Fund, LLC** | 249.0 |  | 1625000 |
| **Evergreen Capital Management LLC** | 250.0 |  | 1625000 |
| **3i LP (3i Management LLC, as General Partner)** | 251.0 |  | 1625000 |

---

Footnotes

---

| | |
|:---|:---|
| **FOOTNOTE NO** | **FOOTNOTES** |
| 1 | Diana Klejne is the principal of 1056365 BC LTD and has voting control and investment discretion over the securities reported herein. |
| 2 | Judy Kalyan is the principal of 1177883 BC LTD and has voting control and investment discretion over the securities reported herein. |
| 3 | Kyle Lennie is the principal of 514751 NB INC and has voting control and investment discretion over the securities reported herein. |
| 4 | Craig Taylor is the principal of 576112 BC LTD and has voting control and investment discretion over the securities reported herein. |
| 5 | Kyle Lennie is the principal of 680286 NB INC and has voting control and investment discretion over the securities reported herein. |
| 6 | Joseph Michael is the principal of 7A J.A.M. CORPORATION and has voting control and investment discretion over the securities reported herein. |
| 7 | Gary Kelly is the principal of ADVISIR VENTURES LTD. and has voting control and investment discretion over the securities reported herein. |
| 8 | R.L.S. Nook is the principal of AKCCE INC and has voting control and investment discretion over the securities reported herein. |
| 9 | Negar Adam is the principal of ALL SEASONS CONSULTING INC and has voting control and investment discretion over the securities reported herein. |
| 10 | Dan Cannon is the principal of ARTILLERY ONE INC and has voting control and investment discretion over the securities reported herein. |
| 11 | Carie Cessarone is the principal of ATHENA VENTURES INC. and has voting control and investment discretion over the securities reported herein. |
| 12 | These shares are held by Aviso Wealth in trust for the shareholder. |
| 13 | Matthew Banister is the principal of BANISTER & MILLER, PLLC and has voting control and investment discretion over the securities reported herein. |
| 14 | Madeline Collins-Martin is the principal of BHB Group Partners LLC and has voting control and investment discretion over the securities reported herein. Shareholder's ownership amounts to greater than 1% of total shares outstanding. |
| 15 | Craig Loucks is the principal of BIG SKY PRIVATE EQUITY LLC and has voting control and investment discretion over the securities reported herein. |
| 16 | Jeff Tindale is the principal of BIRKEN CAPITAL PARTNERS LTD. and has voting control and investment discretion over the securities reported herein. |
| 17 | These shares are held by BMO NESBITT BURNS INC in trust for Rijen Inc. Michael Wilson has voting control & investment discretion over the securities reported herein. |
| 18 | These shares are held by BMO NESBITT BURNS INC in trust for Blair Roma |
| 19 | These shares are held by BMO NESBITT BURNS INC in trust for John Young |
| 20 | These shares are held by BMO NESBITT BURNS INC in trust for Brenda Young |
| 21 | These shares are held by BMO NESBITT BURNS INC in trust for Patricia & Doug Trecartin |
| 22 | These shares are held by BMO NESBITT BURNS INC in trust for Gary Pollock |
| 23 | These shares are held by BMO NESBITT BURNS INC in trust for Saverio Holdings Ltd. Rocco Saverio is the principal having voting control and investment discretion over the securities reported herein. |
| 24 | These shares are held by BMO NESBITT BURNS INC in trust for Douglas or Barbara Anderson |
| 25 | These shares are held by BMO NESBITT BURNS INC in trust for Ian Kelly |
| 26 | These shares are held by BMO NESBITT BURNS INC in trust for Cathy Coyle |
| 27 | These shares are held by BMO NESBITT BURNS INC in trust for Coyle Trust Holdings. Keary Coyle is the President and has authority and discretion over the securities reported herein |
| 28 | These shares are held by BMO NESBITT BURNS INC in trust for Bohdon Holdings Inc. Gordon Lahanky has voting control & investment discretion over the securities reported herein |
| 29 | These shares are held by BMO NESBITT BURNS INC in trust for 648557 NB Inc. Joseph Taylor is President and has voting control & investment discretion over the securities reported herein |
| 30 | These shares are held by BMO NESBITT BURNS INC in trust for Blair Roma |
| 31 | These shares are held by BMO NESBITT BURNS INC in trust for Bruce Sweeney |
| 32 | These shares are held by BMO NESBITT BURNS INC in trust for Jeffrey Pearson |
| 33 | These shares are held by BMO NESBITT BURNS INC in trust for Jarrette Bannister |
| 34 | These shares are held by BMO NESBITT BURNS INC in trust for Johnny Longphee |
| 35 | These shares are held by BMO NESBITT BURNS INC in trust for Cassidy Capital Corp. Jeffrey Cassidy has discretion and authority over these shares |
| 36 | These shares are held by BMO NESBITT BURNS INC in trust for Gordon Lahanky |
| 37 | These shares are held by BMO NESBITT BURNS INC in trust for David Deline |
| 38 | These shares are held by BMO NESBITT BURNS INC in trust for Benjamin Strang |
| 39 | These shares are held by BMO NESBITT BURNS INC in trust for Claude Babineau |
| 40 | These shares are held by BMO NESBITT BURNS INC in trust for Maurice Arsenault |

---

---

| | |
|:---|:---|
| 41 | These shares are held by BMO NESBITT BURNS INC in trust for Allan Burgoyne |
| 42 | These shares are held by BMO NESBITT BURNS INC in trust for Jerrod Burgoyne |
| 43 | These shares are held by BMO NESBITT BURNS INC in trust for Liam Dolan |
| 44 | These shares are held by BMO NESBITT BURNS INC in trust for Craig Burgoyne |
| 45 | These shares are held by BMO NESBITT BURNS INC in trust for RDDS Holdilngs Ltd. Robert. Strang has voting control & investment discretion over the securities reported herein |
| 46 | These shares are held by BMO NESBITT BURNS INC in trust for Pierre Andre Beaulieu |
| 47 | These shares are held by BMO NESBITT BURNS INC in trust for Newpatch Holdings Inc. Bryan MacDonald has voting control & investment discretion over the securities reported herein |
| 48 | These shares are held by BMO NESBITT BURNS INC in trust for Robert and/or Stephanie Downey |
| 49 | These shares are held by BMO NESBITT BURNS INC in trust for D.J. Strang Holdings. D. Strang has voting control & investment discretion over the securities reported herein |
| 50 | These shares are held by BMO NESBITT BURNS INC in trust for 688184 NB Ltd. Heidi Eaton is the President and has voting control and authority over the securities reported herein |
| 51 | These shares are held by BMO NESBITT BURNS INC in trust for William Leroy |
| 52 | These shares are held by BMO NESBITT BURNS INC in trust for Sussex Holdings, the President of which is Ian Hunt, who has voting control and investment discretion over the securities reported herein |
| 53 | These shares are held by BMO NESBITT BURNS INC in trust for J.N. Lafford Realty Inc. John Lafford has investment discretion and authority over the securities reported herein. |
| 54 | These shares are held by BMO NESBITT BURNS INC in trust for Paul Champagne |
| 55 | These shares are held by BMO NESBITT BURNS INC in trust for Keith Maddison |
| 56 | These shares are held by BMO NESBITT BURNS INC in trust for Harold Thurrott. |
| 57 | These shares are held by BMO NESBITT BURNS INC in trust for Leigh Eaton |
| 58 | These shares are held by BMO NESBITT BURNS INC in trust for Daryl Ritchie |
| 59 | These shares are held by BMO NESBITT BURNS INC in trust for Jean Heisler |
| 60 | These shares are held by BMO NESBITT BURNS INC in trust for Chris Downey |
| 61 | These shares are held by BMO NESBITT BURNS INC in trust for Suzanne Leroy |
| 62 | These shares are held by BMO NESBITT BURNS INC in trust for Harold Butler |
| 63 | These shares are held by BMO NESBITT BURNS INC in trust for William Hanley |
| 64 | These shares are held by BMO NESBITT BURNS INC in trust for 603607 NB Ltd., of which Mr. Thurott has voting control and investment discretion over the securites reported herein |
| 65 | These shares are held by BMO NESBITT BURNS INC in trust for Devon Babineau |
| 66 | These shares are held by BMO NESBITT BURNS INC in trust for George Georgoudis |
| 67 | These shares are held by BMO NESBITT BURNS INC in trust for Scott O'Neal |
| 68 | These shares are held by BMO NESBITT BURNS INC in trust for 509495 NB Ltd. Paul Poirier has investment discretion and authority over the securities reported herein. |
| 69 | These shares are held by BMO NESBITT BURNS INC in trust for 644201 NB Inc. Patrice Landry has voting control & investment discretion over the securities reported herein |
| 70 | These shares are held by BMO NESBITT BURNS INC in trust for 668932 NB Inc. Luke Hickey has voting control & investment discretion over the securities reported herein. |
| 71 | These shares are held by BMO NESBITT BURNS INC in trust for Gestion Michel Jacob Inc. Michel Jacob has investment discretion and authority over the securities reported herein. |
| 72 | These shares are held by BMO NESBITT BURNS INC in trust for Colin Thornton |
| 73 | Matthew LeRoy is the principal of 608266 NB Ltd., and has voting control and investment discretion over the securities reported herein which are held by BMO Nesbitt Burns in trust for 608266 NB Ltd.. |
| 74 | Ryan Kennedy is the principal of 636579 NB Inc., and has voting control and investment discretion over the securities reported herein which are held by BMO Nesbitt Burns in trust for 636579 NB Inc.. |
| 75 | Joseph Taylor is the principal of 648557 NB Inc., and has voting control and investment discretion over the securities reported herein which are held by BMO Nesbitt Burns in trsut for 648557 NB Inc. |
| 76 | These shares are held by BMO NESBITT BURNS INC in trust for the shareholder. |
| 77 | Gordon Lahanky is the principal of Bohdon Holdings Inc., and has voting control and investment discretion over the securities reported herein which are held by BMO Nesbitt Burns in trust for Bohdon Holdings Inc.. |
| 78 | Catherine Coyle is the principal of Catherine Coyle Trust Holdings Inc., and has voting control and investment discretion over the securities reported herein which are held by BMO Nesbitt Burns in trust for Catherine Coyle Trust Holdings Inc.. |
| 79 | Wayne Chamberlain is the principal of Covalent Enterprises Ltd., and has voting control and investment discretion over the securities reported herein which are held by BMO Nesbitt Burns in trust for Covalent Enterprises Ltd.. |
| 80 | Catherine Coyle is the principal of Coyle Trust Holdings Inc., and has voting control and investment discretion over the securities reported herein which are held by BMO Nesbitt Burns in trust for Coyle Trust Holdings Inc.. |

---

---

| | |
|:---|:---|
| 81 | Daniel Gormley is the principal of Danahelo Holdings Ltd., and has voting control and investment discretion over the securities reported herein which are held by BMO Nesbitt Burns in trust for Danahelo Holdings Ltd.. |
| 82 | Doug Simpson is the principal of Doug Simpson Investments Ltd., and has voting control and investment discretion over the securities reported herein which are held by BMO Nesbitt Burns in trust for Doug Simpson Investments Ltd.. |
| 83 | D.E. Craig is the principal of Dr. D.E. Craig Professional Corporation, and has voting control and investment discretion over the securities reported herein which are held by BMO Nesbitt Burns in trust for Dr. D.E. Craig Professional Corporation. |
| 84 | Jeff Sheppard is the principal of Dr. Jeff Sheppard Professional Corporation, and has voting control and investment discretion over the securities reported herein which are held by BMO Nesbitt Burns |
| 85 | Piere Andre Beaulieu is the principal of Dr. Pierre Andre Beaulieu Prof. Corp., and has voting control and investment discretion over the securities reported herein which are held by BMO Nesbitt Burns in trust for Dr. Pierre Andre Beaulieu Prof. Corp.. |
| 86 | Greg Walton is the principal of Greg Walton Investments Limited, and has voting control and investment discretion over the securities reported herein which are held by BMO Nesbitt Burns in trust for Greg Walton Investments Limited. |
| 87 | Luke Moffett is the principal of James Avery Grace Corp., and has voting control and investment discretion over the securities reported herein which are held by BMO Nesbitt Burns in trust for James Avery Grace Corp.. |
| 88 | John Murray is the principal of John L. Murray Financial Services Ltd., and has voting control and investment discretion over the securities reported herein which are held by BMO Nesbitt Burns in trust for John L. Murray Financial Services Ltd.. |
| 89 | Luke Moffett is the principal of Nilock Capital Corp., and has voting control and investment discretion over the securities reported herein which are held by BMO Nesbitt Burns in trust for Nilock Capital Corp.. |
| 90 | Patrick Julian is President of Peach Investments Ltd. and has voting control and investment discretion over the securities reported herein which are held by BMO Nesbitt Burns in trust Peach Investments Ltd. |
| 91 | Richard Strang is the principal of RDDS Holdings Ltd., and has voting control and investment discretion over the securities reported herein which are held by BMO Nesbitt Burns in trust for RDDS Holdings Ltd.. |
| 92 | Richard Strang is the principal of Strang's Produce Inc., and has voting control and investment discretion over the securities reported herein which are held by BMO Nesbitt Burns in trust for Strang's Produce Inc.. |
| 93 | Val Streeter has voting control and investment discretion over the securities reported herein which are held by BMO Nesbitt Burns in trust for The Streeter Family Trust. |
| 94 | These shares are held by BMO NESBITT BURNS INC in trust for the shareholder. |
| 95 | Greg Walton is the principal of Greg Walton Investments Limited, and has voting control and investment discretion over the securities reported herein which are held by BMO Nesbitt Burns in trust for Greg Walton Investments Limited. |
| 96 | Doyce Boesch is the principal of BOESCH & COMPANY and has voting control and investment discretion over the securities reported herein. |
| 97 | These shares are held by PI Financial Corp. in trust for the shareholder. |
| 98 | David Ponn is the principal of CAMM GLOBAL INC and has voting control and investment discretion over the securities reported herein. |
| 99 | These shares are held by CANACCORD GENUITY CORP in trust for the shareholder. |
| 100 | Dan Daviau is the principal of CANACCORD GENUITY CORP and has voting control and investment discretion over the securities reported herein. |
| 101 | Sean McCoshen is the principal of 7198362 Man Pldg., and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. Shareholder's ownership amounts to greater than 1% of total shares outstanding. |
| 102 | Andrew Lord is President of ADPL Ventures Inc. and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. in trust for ADPL Ventures Inc. |
| 103 | Jeff Green is the principal of 682501 Alberta Ltd. and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. |
| 104 | Graham Saunders is the principal of Bearcliff Trading Corp. and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. in trust for Bearcliff Trading Corp. |
| 105 | Brian Kowall is the principal of Brian Kowall Holdings Ltd. and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. in trust for Brian Kowall Holdings Ltd. |
| 106 | B. Scott is President of Columbia St. Holdings and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. in trust for Columbia St. Holdings. |
| 107 | D. Baker is President of D. Baker Capital Inc. and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Crop. In trust for D. Baker Capital Inc. |
| 108 | Jeffrey Scott is President of Darringer Enterprise and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. in trust for Darringer Enterprise. |
| 109 | Michael Rodger is the principal of DIG MEDIA INC. and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. in trust for DIG MEDIA INC. |
| 110 | Don Parkin is President of DLCS Holdings Ltd. and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. in trust for DLCS Holdings Ltd. |
| 111 | David Sword is President of Fisher Pond Inc. and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. in trust for Fisher Pond Inc. |
| 112 | Gordon Height is President of G & L Height Holdings Ltd. and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. in trust for G & L Height Holdings Ltd. |
| 113 | Gordon Beach is President of G.A. Beach Consultants Ltd. and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. in trust for G.A. Beach Consultants Ltd. |
| 114 | Doug Hoyes is President of GCPD Ontario Inc. and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. in trust for GCPD Ontario Inc. |
| 115 | James Batten is President of Gift2Gift Corp. and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. in trust for Gift2Gift Corp. |

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| | |
|:---|:---|
| 116 | Michael Halvorson is President of Halcorp Capital Ltd. and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. in trust for Halcorp Capital Ltd. |
| 117 | These shares are held by CIBC Wood Gundy in trust for the shareholder |
| 118 | Jonathan Cheng is President of JNC Holdings Inc. and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. in trust for JNC Holdings Inc. |
| 119 | John McLeod is principal of John C. McLeod Law Corp. and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. in trust for John C. McLeod Law Corp. |
| 120 | Chad Oakes is President of Little Puck Entertainment Inc. and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. in trust for Little Puck Entertainment Inc. |
| 121 | Richard Funk is President of Lorick Holdings Ltd. and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. in trust for Lorick Holdings Ltd. |
| 122 | Joel Chevrefils is principal of Joel Chevrefils Professional Corp. and has voting control and investment discretion of the securities reported herein and held by National Bank |
| 123 | Peter Brown is President of Maclachlan Investments Corp. and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. in trust for Maclachlan Investments Corp. |
| 124 | Kelly Pladson is President of Nia Capital Corp. and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. in trust for Nia Capital Corp. |
| 125 | Diana Huber is Settlement Officer of Orca Capital GmbH and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. in trust for Orca Capital GmbH. |
| 126 | C. Puetz is the Trustee of Puetz Family Trust and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. in trust for Puetz Family Trust. |
| 127 | Dwayne Lashyn is President of Quantico Capital Corp. and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. in trust for Quantico Capital Corp. |
| 128 | Richard Michaels is President of Ram Plantium Pty Ltd. and has voting control and investment discretion over the securities reported herein which are held by Canacord Genuity Corp. in trust for Ram Plantium Pty Ltd. |
| 129 | R. Reed is President of Raymond Reed Enterprises Ltd. and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. in trust for Raymond Reed Enterprises Ltd. |
| 130 | Richard P. Borden is the principal of Richard P. Borden Professional Corporation and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. in trust for Richard P. Borden Professional Corporation. |
| 131 | Robert Mills is principal of the Robert Mills Alter Ego Trust No. 1 and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. in trust for Robert Mills Alter Ego Trust No. 1. |
| 132 | Robert Kirkham is the Principal of Rupert 2019 Settlement and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. in trust for the Principal of Rupert 2019 Settlement. |
| 133 | Henri Pigeon is Principal of The Henri & Dorothy Pigeon Joint Partner Trust 2010 and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. in trust for The Henri & Dorothy Pigeon Joint Partner Trust 2010. |
| 134 | Graham Saunders is Principal of The Saunders Family Trust and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. in trust for The Saunders Family Trust. |
| 135 | Peter Vuong is the principal of Vanguard Marketing and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. |
| 136 | D. Malm is President of Violetta Holdings Ltd. and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. in trust for Violetta Holdings Ltd. |
| 137 | T. Curmming is a principal of VJMH Holdings Inc. and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. in trust for VJMH Holdings Inc. |
| 138 | Barkatali Lalani is the principal of Water Street Assets Inc., has voting control and investment discretion over the securities reported herein which are held by CANACCORD GENUITY CORP in trust for Water Street Assets Inc.. |
| 139 | Michael Townsend is the principal of CANNON BRIDGE CAPITAL CORP. and has voting control and investment discretion over the securities reported herein. |
| 140 | Kevin Sampson is the principal of CDS & CO. |
| 141 | These shares are held by CI Investment Services Inc. in trust for the shareholder. |
| 142 | Daniel Faller has voting control and investment disretion of the securities reported herein |
| 143 | Daniel McNellis has voting control and investment discrertion of the securities held herein |
| 144 | David Godber has voting control and investment disretion of the securities reported herein |
| 145 | Peter Goldstein is the principal of Exchange Listing and has voting control and investment discretion over the securities reported herein that are held by Peter Goldstein. Shareholder's ownership amounts to greater than 1% of total shares outstanding. |
| 146 | Jeff Green is the principal of 682501 Alberta Ltd. and has voting control and investment discretion over the securities reported herein which are held by Canaccord Genuity Corp. |
| 147 | These shares are held by Fidelity Clearing Canada in trust for the shareholder. |
| 148 | Nicole Marchand is the principal of 2587557 ONTARIO INC., and has voting control and investment discretion over the securities reported herein which are held by FIDELITY CLEARING CANADA ULC in trust for 2587557 ONTARIO INC. |
| 149 | Alistair Maxwell is the principal of Beacon Securities Ltd. , and has voting control and investment discretion over the securities reported herein which are held by Fidelity Clearing Canada in trust for Beacon Securities Ltd. . |
| 150 | These shares are held by GMP Securities LP in trust for the shareholder. |

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| 151 | Genevieve Roch-Decter is the principal of GRIT CAPITAL ADVISORY INC., and has voting control and investment discretion over the securities reported herein which are held by FIDELITY CLEARING CANADA ULC in trust for GRIT CAPITAL ADVISORY INC. |
| 152 | Steven Marshall is the principal of HYBRID FINANCIAL LTD., and has voting control and investment discretion over the securities reported herein which are held by FIDELITY CLEARING CANADA ULC in trust for HYBRID FINANCIAL LTD. |
| 153 | John Millicheap is the principal of WEST POINT FISHING LTD., and has voting control and investment discretion over the securities reported herein which are held by FIDELITY CLEARING CANADA ULC in trust for WEST POINT FISHING LTD. |
| 154 | Michael Albanese is the principal of FOLKLORE ENTERTAINMENT LLC and has voting control and investment discretion over the securities reported herein. |
| 155 | Jonathan Living is the principal of FOUNTAINHEAD MERCHANT BANCORP INC. and has voting control and investment discretion over the securities reported herein. |
| 156 | Genevieve Roch-Decter is the principal of GENEVIEVE ENTERPRISE CORP and has voting control and investment discretion over the securities reported herein. |
| 157 | Diana Mark is the principal of GREYSTONE CORPORATE SERVICES INC. and has voting control and investment discretion over the securities reported herein. |
| 158 | Bob Siskind is the principal of Alkin Corporation and has voting control and investment discretion over the securities reported herein which are held by CIBC Wood Gundy Co. in trust for Alkin Corporation. |
| 159 | Fred Kangarloo is President of Kangarloo Consulting Inc. and has voting control and investment discretion over the securities reported herein which are held by CIBC Wood Gundy Co. in trust for Kangarloo Consulting Inc. |
| 160 | Steven Samolewicz is the principal of H.T. MERIDIAN LLC, and has voting control and investment discretion over the securities reported herein |
| 161 | These shares are held by Haywood Securities Inc. in trust for the shareholder. |
| 162 | Alan Berge is the principal of HAYWOOD SECURITIES INC. and has voting control and investment discretion over the securities reported herein. |
| 163 | John Weise is President of Merohiroy Ontario Ltd. and has voting control and investment discretion over the securities reported herein which are held by Haywood Securities Inc. in trust for Merohiroy Ontario Ltd. |
| 164 | James Longmore is President of Sausalito Ltd. and has voting control and investment discretion over the securities reported herein which are held by Haywood Securities Inc. in trust for Sausalito Ltd. |
| 165 | Abdul R is the principal of HT Holdings and has voting control and investment discretion over the securities reported herein. Shareholder's ownership amounts to greater than 1% of total shares outstanding. |
| 166 | Tomek Antoniak is the President of In the Room Media and has voting control and investment discretion over the securities reported herein. |
| 167 | These shares are held by Interactive Brokers UK Ltd. in trust for the shareholder. |
| 168 | Donna Jubin is the principal of 101049658 SASKATCHEWAN LTD, and has voting control and investment discretion over the securities reported herein. |
| 169 | These shares are held by Investor Company Inc. in trust for the shareholder. |
| 170 | These shares are held by Leede Financial Inc. in trust for the shareholder. |
| 171 | James Rhode has voting control and investment discretion over securities held by Rhode Family Trust. |
| 172 | These shares are held by National Bank Financial Inc. in trust for the shareholder. |
| 173 | Michael Townsend is the principal of KADENWOOD CAPITAL CORP and has voting control and investment discretion over the securities reported herein. |
| 174 | Michael Townsend is the principal of KADENWOOD DEVELOPMENT CORP. and has voting control and investment discretion over the securities reported herein. |
| 175 | Michael Townsend is the principal of KADENWOOD VENTURES CORP and has voting control and investment discretion over the securities reported herein. |
| 176 | Demetrios Synzinos is the principal of KORAMO LIMITED and has voting control and investment discretion over the securities reported herein. |
| 177 | These shares are held by Laurentian Bank Securities Inc. in trust for the shareholder. |
| 178 | Jim Dale is the principal of Leede Jones Gable Inc. and has voting control and investment discretion over the securities reported herein. |
| 179 | Paul Leger is the principal of LEG HOLDINGS INC and has voting control and investment discretion over the securities reported herein. |
| 180 | Leland Baker has voting control and investment discretion over the securities reported herein |
| 181 | Damien Lowry is the principal of LEVEL 3 CAPITAL MANAGEMENT INC. and has voting control and investment discretion over the securities reported herein. |
| 182 | These shares are held by Lynx BV Germany Branch in trust for the shareholder. |
| 183 | Deane Cheatham has voting control and investment discretion of the securities reported herein |
| 184 | Barry McGilligan is the principal of MCGILLIGAN BARRY INVESTMENTS LTD and has voting control and investment discretion over the securities reported herein. |
| 185 | George Velarde is the principal of MEGA DEALER LLC and has voting control and investment discretion over the securities reported herein. |
| 186 | These shares are held by National Bank Financial Inc. in trust for 1130065 BC. Lars Taylor is a director and has voting control and investment discrtion over the securities reported herein |
| 187 | Bill Keen is the principal of BMN KEEN ENTERPRISES , and has voting control and investment discretion over the securities reported herein which are held by National Bank Financial Inc. in trust for BMN KEEN ENTERPRISES. |

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| 188 | These shares are held by National Bank Financial Inc. in trust for the shareholder. Hesham Osman has voting control and investment discrtion over the securities reported herein. |
| 189 | Genevieve Roch-Decter is the principal of GENEVIEVE ENTERPRISE CORP (32010M), and has voting control and investment discretion over the securities reported herein which are held by National Bank Financial Inc. in trust for GENEVIEVE ENTERPRISE CORP (32010M). |
| 190 | Peter Grosskopf is the principal of Sprott Capital Partners and has voting control and investment discretion over the securities reported herein which are held by National Bank Financial Inc. in trust for Sprott Capital Partners. |
| 191 | Joel Chevrefils is principal of Joel Chevrefils Professional Corp. and has voting control and investment discretion of the securities reported herein and held by National Bank Financial Inc. in trust for Joel Chevrefils Professional Corp. |
| 192 | Lyle Alpine is the principal of 76944 Alberta Ltd. and has voting control and investment discretion over the securities reported herein which are held by National Bank in trust for 76944 Alberta Ltd. |
| 193 | David Wood is President of Zenth Appraisal & Land Consulting and has voting control and investment discretion over the securities reported herein which are held by National Bank in trust for Zenth Appraisal & Land Consulting. |
| 194 | Denis Ricard is the principal of Industrial Alliance Securities Inc. and has voting control and investment discretion over the securities reported herein which are held by Nesbitt Burns in trust for Industrial Alliance Securities Inc. |
| 195 | Cara Tarbaj is the principal of CD PRODUCTIONS INC, and has voting control and investment discretion over the securities reported herein which are held by Nesbitt Burns in trust for CD PRODUCTIONS INC. |
| 196 | Chris Grannan is the principal of CHURCH STREET STEAKHOUSE AND PUB INC, and has voting control and investment discretion over the securities reported herein which are held by Nesbitt Burns in trust for CHURCH STREET STEAKHOUSE AND PUB INC. |
| 197 | David Kean is the principal of Niche Investor Services and has voting control and investment discretion over the securities reported herein. |
| 198 | Jason Coles is the principal of NORTH EQUITIES CORP and has voting control and investment discretion over the securities reported herein. |
| 199 | Taylor Gavinchuck is the principal of PACER CAPITAL CORP and has voting control and investment discretion over the securities reported herein. |
| 200 | Robyn Knox is the principal of PEISES CORP. and has voting control and investment discretion over the securities reported herein. Shareholder's ownership amounts to greater than 1% of total shares outstanding. |
| 201 | Peter Feifel is the principal of PETER A FEIFEL PROFESSIONAL CORPORATION and has voting control and investment discretion over the securities reported herein. |
| 202 | Alain Lemay is the principal of PLACEMENTS ALAIN LEMAY INC and has voting control and investment discretion over the securities reported herein. |
| 203 | Robert Turner is the principal of PLAYGROUND MEDIA INC and has voting control and investment discretion over the securities reported herein. |
| 204 | Rosalind Cross is the principal of RATHERBY INVESTMENTS LLC and has voting control and investment discretion over the securities reported herein. |
| 205 | These shares are held by RBC Dominion Securities Inc. in trust for the shareholder. |
| 206 | These shares are held by RBC Investor Services on behalf of 176027007 (LDIC Inc.), the principal of which is Michael Decter, who has voting control and investment discretion over the securities reported herein |
| 207 | These shares are held by RESEARCH CAPITAL CORP. in trust for the shareholder. |
| 208 | Brett Thorne is the principal of ROYTOR & CO. and has voting control and investment discretion over the securities reported herein which are held by ROYTOR & CO. |
| 209 | Nav Dhaliwahl is the principal of RSD CAPITAL CORP. and has voting control and investment discretion over the securities reported herein. |
| 210 | These shares are held by Scotia Capital Inc. in trust for the shareholder. |
| 211 | Alain D. Bourassa is the principal of BOURASSA PROFESSIONAL CORP., and has voting control and investment discretion over the securities reported herein which are held by Scotia Capital Inc. in trust for BOURASSA PROFESSIONAL CORP. |
| 212 | John Longphee is the principal of SEVEN SEVEN SEVEN HOLDINGS LTD and has voting control and investment discretion over the securities reported herein. |
| 213 | Ross Carmel is the principal of SICHENZIA ROSS FERENCE CARMEL and has voting control and investment discretion over the securities reported herein. Shareholder's ownership amounts to greater than 1% of total shares outstanding. |
| 214 | Kelli Nguyen is the principal of SIENAG HOLDINGS LLC and has voting control and investment discretion over the securities reported herein. |
| 215 | Chris Hunt is the principal of SKYE CORPORATE HOLDINGS, INC. and has voting control and investment discretion over the securities reported herein. |
| 216 | Naseer F is the principal of Skyview Corp. and has voting control and investment discretion over the securities reported herein. Shareholder's ownership amounts to greater than 1% of total shares outstanding. |
| 217 | Geoff Balderson is the principal of SPECTRE CAPITAL CORP. and has voting control and investment discretion over the securities reported herein. |
| 218 | Michael Townsend is the principal of SPECTRE INVESTMENTS INC. and has voting control and investment discretion over the securities reported herein. |
| 219 | Jag Sanger is the principal of STOCKHOUSE PUBLISHING LTD. and has voting control and investment discretion over the securities reported herein. |
| 220 | These shares are held by Roytor & Co. in trust for the shareholder. |

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| 221 | These shares are held by TD Ameritrade in trust for the shareholder. |
| 222 | Chris Natevski is a Principal of Terra Capital and has voting control and investment discretion over the securities reported herein. Shareholder's ownership amounts to greater than 1% of total shares outstanding. |
| 223 | Patrick H. Ryan is the principal of THE IRA CLUB F/B/O PATRICK H. RYAN, JR. and has voting control and investment discretion over the securities reported herein. |
| 224 | Theodore Strein is the principal of Theodore Streine Soehne Holding GmbH and has voting control and investment discretion over the securities reported herein. |
| 225 | Leonard Clough is the principal of TORO PACIFIC MANAGEMENT INC and has voting control and investment discretion over the securities reported herein. |
| 226 | Mike Smith is the principal of TRAILER PARK BOYS INCORPORATED and has voting control and investment discretion over the securities reported herein. |
| 227 | These shares are held by Ventum Financial Corp in trust for 1135541 Alberta. Jeff Hines is the President of 1135541 Alberta and has voting control and investment discretion over the securities reported herein. |
| 228 | These shares are held by Ventum Financial Corp. in trust for the shareholder. |
| 229 | Richard Butterworth is COO & CFO of Ventum Financial Corp. |
| 230 | Bob Siskind is the principal of Alkin Corporation and has voting control and investment discretion over the securities reported herein which are held by CIBC Wood Gundy |
| 231 | Brad Aelicks is President of Bronze Resources Ltd. and has voting control and investment discretion over the securities reported herein which are held by Ventum Financial Corp in trust for Bronze Resources Ltd. |
| 232 | Justin Kales is the principal of Broughdale Holdings Inc. and has voting control and investment discretion over the securities reported herein which are held by Ventum Financial Corp. in trust for Broughdale Holdings Inc. |
| 233 | Neil Currie is a principal of Capital Event Management and has voting control and investment discretion over the securities reported herein which are held by Ventum Financial Corp. in trust for Capital Event Management. |
| 234 | Frank Hogel is the principal of Concept Capital Management Ltd., and has voting control and investment discretion over the securities reported herein which are held by Ventum Financial Corp. in trust for Concept Capital Management Ltd. |
| 235 | Alex Bajin is the principal of Estate of Natalija Bajin, and has voting control and investment discretion over the securities reported herein which are held by Ventum Financial Corp. in trust for Estate of Natalija Bajin. |
| 236 | Wendy Jarvis is President of Weldwood Inc. and has voting control and investment discretion over the securities reported herein which are held by Ventum Financial Corp. in trust for Weldwood Inc. |
| 237 | These shares are held by Ventum Financial in trust for 576112 BC Ltd. Craig Taylor is the Princiapal, who has voting control and investment discretion over the securities reported herein. |
| 238 | These shares are held by Ventum Financial in trust for Bull Markets Media GmbH. Andre Doerk is the Principal, who has voting control and investment discretion over the securities reported herein. |
| 239 | These shares are held by Ventum Financial in trust for Andrew Kohler Professional Corp., the Principal of which is Andrew Kohler, who has voting control and investment discretion over the securities reported herein |
| 240 | Barkatali Lalani is the principal of Water Street Assets Inc., has voting control and investment discretion over the securities reported herein which are held by CANACCORD GENUITY CORP in trust for Water Street Assets Inc.. |
| 241 | Andrew Donaldson is the principal of WESTLAKE CONSULTING, LLC and has voting control and investment discretion over the securities reported herein. |
| 242 | W. Ray Boreham has voting control and investment discretion over the securities reported herein |
| 243 | Walter Neil is the principal of WKN LLC and has voting control and investment discretion over the securities reported herein. |
| 244 | Bruce Young is the principal of YOUNG STRATEGIES LTD and has voting control and investment discretion over the securities reported herein. |
| 245 | Jeff Steinke is the principal of ZERO GRAVITY CAPITAL CORP. and has voting control and investment discretion over the securities reported herein. |
| 246 | <br> Avi Geller, the manager of Leonite Fund I, LP, holds voting and dispositive power over the shares of common stock held by Leonite Fund I, LP. The address of Leonite Fund I, LP is 600 E Crescent Ave suite 104 Upper Saddle River New Jersey 07458 |
| 247 | Voting and dispositive power for Kips Bay Select LP is held by Roman Rogol |
| 248 | Helena HoldCo Inc., incorporated under the laws of the Commonwealth of The Bahamas, solely owns Helena Global Investment Opportunities I Ltd. Mr. Jeremy Weech is the sole shareholder of Helena HoldCo Inc. and exercises voting and dispositive power of the securities held by Helena HoldCo Inc. The address of Helena HoldCo Inc is Suite 205A, Saffrey Square, Bank Lane & Bay Street, P.O. Box N-9934, Nassau, Bahamas. |
| 249 | <br> Eli Fireman Managing member, Firstfire Global Opportunities Fund LLC 1040 1ST AVE STE 90 NY NY 10022<br>|
| 250 | Jeffrey Pazdro as the Manager of Evergreen Capital Management LLC as the natural person is who exercises voting and dispositive power over the securities that are beneficially owned. |
| 251 | <br> 3i Management LLC is the general partner of 3i, LP, and Maier Joshua Tarlow is the manager of 3i Management LLC. As such, Mr. Tarlow exercises sole voting and investment discretion over securities beneficially owned directly or indirectly by 3i, LP and 3i Management LLC. Mr. Tarlow disclaims beneficial ownership of the securities beneficially owned directly by 3i, LP and indirectly by 3i Management LLC. The business address of each of the aforementioned parties is 2 Wooster Street, 2nd Floor, New York, NY 10013. <br>|

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**DESCRIPTION OF SECURITIES**

**General**

Our authorized capital stock currently consists of 220,000,000 shares of common stock as of September 3, 2025, par value $0.00001 per share and 1,000,000 shares of preferred stock.

The following description summarizes important terms of the classes of our capital stock following the filing of our articles of incorporation. This summary does not purport to be complete and is qualified in its entirety by the provisions of our articles of incorporation and our bylaws which have been filed as exhibits to the registration statement of which this prospectus is a part.

As of the date of this prospectus, there are 7,027,255 shares of common stock issued and outstanding. Upon funding of the private placement, 100,000 shares of Class A Convertible Preferred Stock and 80,000 shares of Class B Convertible Preferred Stock will be outstanding.

**Common Stock**

*Voting Rights.* The holders of common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the shareholders. Under our articles of incorporation and bylaws, any corporate action to be taken by vote of shareholders other than for election of directors shall be authorized by the affirmative vote of the majority of votes cast. Directors are elected by a plurality of votes. Shareholders do not have cumulative voting rights.

*Dividend Rights*. Subject to preferences that may be applicable to any then-outstanding preferred stock, holders of common stock are entitled to receive ratably those dividends, if any, as may be declared from time to time by the board of directors out of legally available funds.

*Liquidation Rights*. In the event of our liquidation, dissolution or winding up, holders of common stock will be entitled to share ratably in the net assets legally available for distribution to shareholders after the payment of all of our debts and other liabilities and the satisfaction of any liquidation preference granted to the holders of any then-outstanding shares of preferred stock.

*Other Rights*. Holders of common stock have no preemptive, conversion or subscription rights and there are no redemption or sinking fund provisions applicable to the common stock. The rights, preferences and privileges of the holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock.

**Restricted stock options**

Upon the closing of this offering, there will be up to 4,500,000 restricted stock units issuable at the discretion of the board of directors of the Company.

**Anti-Takeover Provisions**

**Certain Anti-takeover Provisions of Delaware Law, our Certificate of Incorporation and Bylaws**

As a Delaware corporation, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally has an anti-takeover effect for transactions not approved in advance by our Board. This may discourage takeover attempts that might result in payment of a premium over the market price for the shares of common stock held by stockholders. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a "business combination" with an "interested stockholder" for a three-year period following the time that such stockholder becomes an interested stockholder, unless the business combination is approved in a prescribed manner. A "business combination" includes, among other things, a merger, asset or stock sale or other transaction resulting in a financial benefit to the interested stockholder. An "interested stockholder" is a person who, together with affiliates and associates, owns, or did own within three years prior to the determination of interested stockholder status, 15% or more of Functional Brands' voting stock.

Under Section 203, a business combination between a corporation and an interested stockholder is prohibited unless it satisfies one of the following conditions:

● before the stockholder became interested, the board of directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder; or

● upon consummation of the transaction which resulted in the stockholder becoming an interested outstanding, shares owned by:

● persons who are directors and also officers, and

● employee stock plans, in some instances; or

● at or after the time the stockholder became interested, the business combination was approved by the board of directors are authorized at an annual or special meeting of the stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder.

***Special meeting of stockholders***

Our bylaws provide that special meetings of our stockholders may be called by the Chairman of the Board, the Board, President of the Company, or by the Board upon written request by the holders of a majority of the voting stock of the Company.

  ****

***Removal of directors***

Subject to any limitations imposed by applicable law (and assuming the corporation is not subject to Section 2115 of the CGCL), the Board of Directors or any director may be removed from office at any time (i) with cause by the affirmative vote of the holders of a majority of the voting power of all then-outstanding shares of capital stock of the corporation entitled to vote generally at an election of directors or (ii) without cause by the affirmative vote of the holders of a majority of the voting power of all then-outstanding shares of capital stock of the corporation, entitled to elect such director.

During such time or times that the corporation is subject to Section 2115(b) of the CGCL, the Board of Directors or any individual director may be removed from office at any time without cause by the affirmative vote of the holders of at least a majority of the outstanding shares entitled to vote on such removal; provided, however, that unless the entire Board is removed, no individual director may be removed when the votes cast against such director's removal, or not consenting in writing to such removal, would be sufficient to elect that director if voted cumulatively at an election which the same total number of votes were cast (or, if such action is taken by written consent, all shares entitled to vote were voted) and the entire number of directors authorized at the time of such director's most recent election were then being elected.

**Limitation of Liability and Indemnification of Directors and Officers**

Our bylaws provide that our directors and officers will be indemnified by us to the fullest extent authorized by Delaware law.

These provisions may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder's investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions. We believe that these provisions, insurance and the indemnity agreements are necessary to attract and retain talented and experienced directors and officers.

We are not aware of any threatened litigation or proceeding that might result in a claim for such indemnification, except as disclosed below. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

***Cumulative Voting***

The holders of our common stock do not have cumulative voting rights in the election of our directors. The combination of the present ownership by a few shareholders of a significant portion of our issued and outstanding common stock and lack of cumulative voting makes it more difficult for other shareholders to replace our board of directors or for a third party to obtain control of our company by replacing its board of directors.

**Transfer Agent and Registrar**

We have appointed Endeavor Trust Corporation as the transfer agent for our common stock. Endeavor Trust Corporation is located at 702 - 777 Hornby Street, Vancouver, BC, V6Z 1S4.

**SHARES ELIGIBLE FOR FUTURE SALE**

There previously has not been a public market for shares of our common stock. Future sales of substantial amounts of shares of our common stock, including shares issued upon the conversion of convertible preferred stock, convertible notes, the exercise of outstanding options and warrants, in the public market after this offering, or the possibility of these sales occurring, could cause the prevailing market price for our common stock to fall or impair our ability to raise equity capital in the future.

As of September 3, 2025 there are 7,027,255 shares of our common stock issued and outstanding.

Previously issued shares of common stock that were not registered hereby, as well as shares issuable upon the exercise of warrants and subject to employee stock options, are or will be upon issuance, "restricted securities," as that term is defined in Rule 144 under the Securities Act. These restricted securities are eligible for public sale only if such public resale is registered under the Securities Act or if the resale qualifies for an exemption from registration under Rule 144 or Rule 701 under the Securities Act, which are summarized below.

**Rule 144**

In general, a person who has beneficially owned restricted shares of our common stock for at least twelve months, or at least six months in the event we have been a reporting company under the Exchange Act for at least ninety (90) days before the sale, would be entitled to sell such securities, provided that such person is not deemed to be an affiliate of ours at the time of sale or to have been an affiliate of ours at any time during the ninety (90) days preceding the sale. A person who is an affiliate of ours at such time would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of shares that does not exceed the greater of the following:

● 1% of the number of shares of our common stock then outstanding; or

● 1% of the average weekly trading volume of our common stock during the four calendar weeks preceding the filing by such person of a notice on Form 144 with respect to the sale;

provided that, in each case, we are subject to the periodic reporting requirements of the Exchange Act for at least 90 days before the sale. Rule 144 trades must also comply with the manner of sale, notice and other provisions of Rule 144, to the extent applicable.

As of September 3, 2025, there are approximately 159,855 shares of the Company's common stock outstanding that are not being registered hereunder, but that have been held by non-affiliates for six months or more and may be subject to sale pursuant to Rule 144.

**Rule 701**

In general, Rule 701 allows a shareholder who purchased shares of our capital stock pursuant to a written compensatory plan or contract and who is not deemed to have been an affiliate of ours during the immediately preceding 90 days to sell those shares in reliance upon Rule 144, but without being required to comply with the public information, holding period, volume limitation or notice provisions of Rule 144. All holders of Rule 701 shares, however, are required to wait until ninety (90) days after the date of this prospectus before selling shares pursuant to Rule 701.

**Lock-Up Agreements**

We, all of our directors and officers and holders of 5% or more of our common stock have agreed, subject to certain exceptions, not to sell, transfer or dispose of, directly or indirectly, any of our common stock or securities convertible into or exercisable or exchangeable for our common stock for a period of six months after the closing of this offering. See the *"Plan of Distribution*" section below for more information.

**MATERIAL U.S. FEDERAL TAX CONSIDERATIONS FOR NON-U.S. HOLDERS OF OUR SECURITIES**

The following is a summary of the material U.S. federal income and estate tax consequences of the ownership and disposition of our common stock that is being issued pursuant to this offering. This summary is limited to Non-U.S. Holders (as defined below) that hold our common stock as a capital asset (generally, property held for investment) for U.S. federal income tax purposes. This summary does not discuss all of the aspects of U.S. federal income and estate taxation that may be relevant to a Non-U.S. Holder in light of the Non-U.S. Holder's particular investment or other circumstances. Accordingly, all prospective Non-U.S. Holders should consult their own tax advisors with respect to the U.S. federal, state, local and non-U.S. tax consequences of the ownership and disposition of our common stock.

This summary is based on provisions of the Code, applicable U.S. Treasury regulations and administrative and judicial interpretations, all as in effect or in existence on the date of this prospectus. Subsequent developments in U.S. federal income or estate tax law, including changes in law or differing interpretations, which may be applied retroactively, could alter the U.S. federal income and estate tax consequences of owning and disposing of our common stock as described in this summary. There can be no assurance that the Internal Revenue Service, or IRS, will not take a contrary position with respect to one or more of the tax consequences described herein and we have not obtained, nor do we intend to obtain, a ruling from the IRS with respect to the U.S. federal income or estate tax consequences of the ownership or disposition of our common stock.

As used in this summary, the term "Non-U.S. Holder" means a beneficial owner of our common stock that is not, for U.S. federal income tax purposes:

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

● a corporation (or other entity treated as a corporation) created or organized in or under the laws of the United States, any state thereof, or the District of Columbia;

● an entity or arrangement treated as a partnership;

● an estate whose income is includible in gross income for U.S. federal income tax purposes regardless of its source; or

● a trust, if (1) a U.S. court is able to exercise primary supervision over the trust's administration and one or more "United States persons" (within the meaning of the Code) has the authority to control all of the trust's substantial decisions, or (2) the trust has a valid election in effect under applicable U.S. Treasury regulations to be treated as a United States person.

If an entity or arrangement treated as a partnership for U.S. federal income tax purposes holds our common stock, the tax treatment of a partner in such a partnership generally will depend upon the status of the partner, the activities of the partnership and certain determinations made at the partner level. Partnerships, and partners in partnerships, that hold our common stock should consult their own tax advisors as to the particular U.S. federal income and estate tax consequences of owning and disposing of our common stock that are applicable to them.

This summary does not consider any specific facts or circumstances that may apply to a Non-U.S. Holder and does not address any special tax rules that may apply to particular Non-U.S. Holders, such as:

● a Non-U.S. Holder that is a financial institution, insurance company, tax-exempt organization, pension plan, broker, dealer or trader in securities, dealer in currencies, U.S. expatriate, controlled foreign corporation or passive foreign investment company;

● a Non-U.S. Holder holding our common stock as part of a conversion, constructive sale, wash sale or other integrated transaction or a hedge, straddle or synthetic security;

● a Non-U.S. Holder that holds or receives our common stock pursuant to the exercise of any employee stock option or otherwise as compensation; or

● a Non-U.S. Holder that at any time owns, directly, indirectly or constructively, 5% or more of our outstanding common stock.

In addition, this summary does not address any U.S. state or local, or non-U.S. or other tax consequences, or any U.S. federal income or estate tax consequences for beneficial owners of a Non-U.S. Holder, including shareholders of a controlled foreign corporation or passive foreign investment company that holds our common stock.

**Each Non-U.S. Holder should consult its own tax advisor regarding the U.S. federal, state, local and non-U.S. income and other tax consequences of owning and disposing of our common stock.**

**Distributions of Our Common Stock**

We do not currently expect to pay any cash dividends on our common stock. If we make distributions of cash or property (other than certain pro rata distributions of our common stock) with respect to our common stock, any such distributions generally 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 rules. If a distribution exceeds our current and accumulated earnings and profits, the excess will be treated as a nontaxable return of capital to the extent of the Non-U.S. Holder's adjusted tax basis in our common stock and will reduce (but not below zero) such Non-U.S. Holder's adjusted tax basis in our common stock. Any remaining excess will be treated as gain from a disposition of our common stock subject to the tax treatment described below in "*— Dispositions of Our Common Stock*."

Distributions on our common stock that are treated as dividends and that are effectively connected with a Non-U.S. Holder's conduct of a trade or business in the United States will be taxed on a net income basis at the regular graduated rates and in the manner applicable to United States persons. An exception may apply if the Non-U.S. Holder is eligible for, and properly claims, the benefit of an applicable income tax treaty and the dividends are not attributable to a permanent establishment or fixed base maintained by the Non-U.S. Holder in the United States. In such case, the Non-U.S. Holder may be eligible for a lower rate under an applicable income tax treaty between the United States and its jurisdiction of tax residence. Dividends that are effectively connected with a Non-U.S. Holder's conduct of a trade or business in the United States will not be subject to the U.S. withholding tax if the Non-U.S. Holder provides to the applicable withholding agent a properly executed IRS Form W-8ECI (or other applicable form) in accordance with the applicable certification and disclosure requirements. A Non-U.S. Holder treated as a corporation for U.S. federal income tax purposes may also be subject to a "branch profits tax" at a 30% rate (unless the Non-U.S. Holder is eligible for a lower rate under an applicable income tax treaty) on the Non-U.S. Holder's earnings and profits (attributable to dividends on our common stock or otherwise) that are effectively connected with the Non-U.S. Holder's conduct of a trade or business within the United States. The amount of taxable earnings and profits is generally reduced by amounts reinvested in the operations of the U.S. trade or business and increased by any decline in its equity.

The certifications described above must be provided to the applicable withholding agent prior to the payment of dividends and must be updated periodically. A Non-U.S. Holder may obtain a refund or credit of any excess amounts withheld by timely filing an appropriate claim for a refund with the IRS. Non-U.S. Holders should consult their own tax advisors regarding their eligibility for benefits under any relevant income tax treaty and the manner of claiming such benefits.

The foregoing discussion is subject to the discussions below under "*Backup Withholding and Information Reporting*" and "*FATCA Withholding*."

**Dispositions of Our Common Stock**

A Non-U.S. Holder generally will not be subject to U.S. federal income tax (including U.S. withholding tax) on gain recognized on any sale or other disposition of our common stock unless:

● the gain is 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, is attributable to a permanent establishment or fixed base maintained by the Non-U.S. Holder in the United States); in such case, the gain would be subject to U.S. federal income tax on a net income basis at the regular graduated rates and in the manner applicable to United States persons (unless an applicable income tax treaty provides otherwise) and, if the Non-U.S. Holder is treated as a corporation for U.S. federal income tax purposes, the "branch profits tax" described above may also apply;

● 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 disposition and meets certain other requirements; in such case, except as otherwise provided by an applicable income tax treaty, the gain, which may be offset by certain U.S. source capital losses, generally will be subject to a flat 30% U.S. federal income tax, even if the Non-U.S. Holder is not treated as a resident of the United States under the Code; or

● we are or have been a "United States real property holding corporation" for U.S. federal income tax purposes at any time during the shorter of (i) the five-year period ending on the date of disposition and (ii) the period that the Non-U.S. Holder held our common stock.

Generally, a corporation is a "United States real property holding corporation" if the fair market value of its "United States real property interests" equals or exceeds 50% of the sum of the fair market value of its worldwide real property interests plus its other assets used or held for use in a trade or business. We believe that we are not currently, and we do not anticipate becoming in the future, a United States real property holding corporation. However, because the determination of whether we are a United States real property holding corporation is made from time to time and depends on the relative fair market values of our assets, there can be no assurance in this regard. If we were a United States real property holding corporation, the tax relating to disposition of stock in a United States real property holding corporation generally will not apply to a Non-U.S. Holder whose holdings, direct, indirect and constructive, constituted 5% or less of our common stock at all times during the applicable period, provided that our common stock are "regularly traded on an established securities market" (as provided in applicable U.S. Treasury regulations) at any time during the calendar year in which the disposition occurs. However, no assurance can be provided that our common stock will be regularly traded on an established securities market for purposes of the rules described above. Non-U.S. Holders should consult their own tax advisors regarding any possible adverse U.S. federal income tax consequences to them if we are, or were to become, a United States real property holding corporation.

The foregoing discussion is subject to the discussions below under "*Backup Withholding and Information Reporting*" and "*FATCA Withholding*."

**Federal Estate Tax**

Any shares of our common stock that are owned (or treated as owned) by an individual who is not a U.S. citizen or resident of the United States (as specially defined for U.S. federal estate tax purposes) at the time of death will be included in that individual's gross estate for U.S. federal estate tax purposes, unless an applicable estate tax or other treaty provides otherwise and, therefore, may be subject to U.S. federal estate tax.

**Backup Withholding and Information Reporting**

Backup withholding (currently at a rate of 24%) may apply to dividends paid by U.S. corporations in some circumstances, but will not apply to payments of dividends on our common stock to a Non-U.S. Holder if the Non-U.S. Holder provides to the applicable withholding agent a properly executed IRS Form W-8BEN or W-8BEN-E (or other applicable form) certifying under penalties of perjury that the Non-U.S. Holder is not a United States person or is otherwise entitled to an exemption. However, the applicable withholding agent generally will be required to report to the IRS (and to such Non-U.S. Holder) payments of dividends on our common stock and the amount of U.S. federal income tax, if any, withheld from those payments. In accordance with applicable treaties or agreements, the IRS may provide copies of such information returns to the tax authorities in the country in which the Non-U.S. Holder resides.

The gross proceeds from sales or other dispositions of our common stock may be subject, in certain circumstances discussed below, to U.S. backup withholding and information reporting. If a Non-U.S. Holder sells or otherwise disposes of any of our common stock outside the United States through a non-U.S. office of a non-U.S. broker and the disposition proceeds are paid to the Non-U.S. Holder outside the United States, the U.S. backup withholding and information reporting requirements generally will not apply to that payment. However, U.S. information reporting, but not U.S. backup withholding, will apply to a payment of disposition proceeds, even if that payment is made outside the United States, if a Non-U.S. Holder sells our common stock through a non-U.S. office of a broker that is a United States person or has certain enumerated connections with the United States, unless the broker has documentary evidence in its files that the Non-U.S. Holder is not a United States person and certain other conditions are met or the Non-U.S. Holder otherwise qualifies for an exemption.

If a Non-U.S. Holder receives payments of the proceeds of a disposition of our common stock to or through a U.S. office of a broker, the payment will be subject to both U.S. backup withholding and information reporting unless the Non-U.S. Holder provides to the broker a properly executed IRS Form W-8BEN or W-8BEN-E (or other applicable form) certifying under penalties of perjury that the Non-U.S. Holder is not a United States person, or the Non-U.S. Holder otherwise qualifies for an exemption.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be credited against the Non-U.S. Holder's U.S. federal income tax liability (which may result in the Non-U.S. Holder being entitled to a refund), provided that the required information is timely furnished to the IRS.

**FATCA Withholding**

The Foreign Account Tax Compliance Act and related Treasury guidance (commonly referred to as FATCA) impose U.S. federal withholding tax at a rate of 30% on payments to certain foreign entities of (i) U.S.-source dividends (including dividends paid on our common stock) and (ii) the gross proceeds from the sale or other disposition of property that produces U.S.-source dividends (including sales or other dispositions of our common stock). This withholding tax applies to a foreign entity, whether acting as a beneficial owner or an intermediary, unless such foreign entity complies with (i) certain information reporting requirements regarding its U.S. account holders and its U.S. owners and (ii) certain withholding obligations regarding certain payments to its account holders and certain other persons. Accordingly, the entity through which a Non-U.S. Holder holds its common stock will affect the determination of whether such withholding is required. While withholding under FATCA would have also applied to payments of gross proceeds from the sale or other disposition of our common stock on or after January 1, 2019, U.S. Treasury regulations proposed in December 2018 eliminate such withholding on payments of gross proceeds entirely. Taxpayers generally may rely on these proposed U.S. Treasury regulations until final U.S. Treasury regulations are issued. Non-U.S. Holders are encouraged to consult their tax advisors regarding FATCA.

**PLAN OF DISTRIBUTION**

The Registered Stockholders, and their pledgees, donees, transferees, assignees, or other successors in interest may sell their shares of common stock covered hereby pursuant to brokerage transactions on Nasdaq, or other public exchanges or registered alternative trading venues, at prevailing market prices at any time after the common stock are listed for trading. We are not party to any arrangement with any Registered Stockholder or any broker-dealer with respect to sales of shares of common stock by the Registered Stockholders, except we have engaged the Advisor with respect to certain other matters relating to the registration of our common stock and listing of our common stock, as further described below. As such, we do not anticipate receiving notice as to if and when any Registered Stockholder may, or may not, elect to sell their shares of common stock or the prices at which any such sales may occur, and there can be no assurance that any Registered Stockholders will sell any or all of their shares of common stock covered by this prospectus.

We will not receive any proceeds from the sale of shares of common stock by the Registered Stockholders. We will recognize costs related to this Direct Listing and our transition to a publicly-traded company consisting of professional fees and other expenses. We will expense these amounts in the period incurred and not deduct these costs from net proceeds to the issuer as they would be in an initial public offering.

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 on the basis of such accepted orders. The Current Reference Price is calculated each second and, during a 10-minute "Display Only" period, is disseminated, along with other indicative imbalance information, to market participants by Nasdaq on its NOII and BookViewer tools. Following the "Display Only" period, a "Pre-Launch" period begins, during which the Advisor, in its capacity as our financial advisor, must notify Nasdaq that our shares are "ready to trade." Once the Advisor has notified Nasdaq that our shares of common stock are ready to trade, Nasdaq will confirm the Current Reference Price for our shares of common stock, in accordance with Nasdaq rules. If the Advisor then approves proceeding at the Current Reference Price, the applicable orders that have been entered will then be executed at such price and regular trading of our shares of common stock on Nasdaq will commence, subject to Nasdaq conducting validation checks in accordance with Nasdaq rules.

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

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.

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

The Advisor will determine when our shares of common stock are ready to trade and approve proceeding at the Current Reference Price primarily based on considerations of volume, timing and price. In particular, the Advisor will determine, based primarily on pre-opening buy and sell orders, when a reasonable amount of volume will cross on the opening trade such that sufficient price discovery has been made to open trading at the Current Reference Price. If the Advisor does not approve proceeding at the Current Reference Price (for example, due to the absence of adequate pre-opening buy and sell interest), the Advisor will request that Nasdaq delay the opening until such a time that sufficient price discovery has been made to ensure that a reasonable amount of volume crosses on the opening trade. Further, in the highly unlikely event that Nasdaq consults with the Advisor as described in clause (iv) of the definition of Current Reference Price, the Advisor would request that Nasdaq delay the opening to ensure a single opening price within clauses (i), (ii) or (iii) of the definition of the Current Reference Price. Under Nasdaq rules, in the event of such delay, prior to terminating such delay, there will be a 10-minute "Display Only" period during which market participants may enter quotes and orders in shares of our common stock in Nasdaq systems. In addition, beginning at 4:00 a.m., market participants may enter orders in shares of our common stock on Nasdaq. Such orders will be accepted and entered into the system. After the conclusion of the 10-minute "Display Only" period, our common stock will enter a "Pre-Launch" period of indeterminate duration. The "Pre-Launch" period will end and shares of our common stock will be released for trading by Nasdaq when certain conditions are met, including Nasdaq's receipt of notice from the Advisor that our shares of common stock are ready to trade, after which the Nasdaq system will calculate the Current Reference Price at that time and display it to the Advisor. If the Advisor then approves proceeding, the Nasdaq system will conduct certain validation checks. The Advisor, with concurrence of Nasdaq, may determine at any point during the delay process up through the conclusion of the "Pre-Launch" period to postpone and reschedule the Direct Listing. The Registered Stockholders will not be involved in Nasdaq's price-setting mechanism and will not coordinate or be in communication with the Advisor including with respect to any decision by the Advisor to delay or proceed with trading; the Advisor will be issued of our common stock in connection with and at the time of the Direct Listing; such shares are not registered further to this prospectus and the Advisor is not a Registered Stockholder. While we will not be involved in Nasdaq's price-setting mechanism, it is expected that we may coordinate or communicate with the Advisor with respect to any decision 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, or 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.

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 (that is, an organized process pursuant to which buy and sell interest is coordinated in advance to some prescribed level – the "book"). 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.

In addition, to list on Nasdaq, we are also required to have at least four registered and active market makers. We expect that the Advisor will act as a registered and active market maker and will engage other market makers. In addition to sales made pursuant to this prospectus, the shares of common stock covered by this prospectus may be sold by the Registered Stockholders in private transactions exempt from the registration requirements of the Securities Act. Under the securities laws of some states, shares of common stock may be sold in such states only through registered or licensed brokers or dealers.

A Registered Stockholder may from time to time transfer, distribute (including distributions in kind by Registered Stockholders that are investment funds), pledge, assign, or grant a security interest in some or all the shares of common stock owned by it and, if it defaults in the performance of its secured obligations, the transferees, distributees, pledgees, assignees, or secured parties may offer and sell the shares of common stock from time to time under this prospectus, or under an amendment to this prospectus under applicable provisions of the Securities Act amending the list of the Registered Stockholders to include the transferee, distributee, pledgee, assignee, or other successors in interest as Registered Stockholders under this prospectus. The Registered Stockholders also may transfer the shares in other circumstances, in which case the transferees, distributes, pledgees, or other successors in interest will be the registered beneficial owners for purposes of this prospectus.

A Registered Stockholder that is an entity may elect to make an in-kind distribution of common stock to its members, partners, or stockholders pursuant to the registration statement of which this prospectus forms a part by delivering a prospectus.

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

We have engaged the Advisor, Joseph Gunnar & Co. LLC, as our financial advisor to advise and assist us with respect to certain matters relating to the Direct Listing. The services expected to be performed by the Advisor will include providing advice and assistance with respect to defining objectives, analyzing, structuring and planning the Direct Listing and developing and assisting with our investor communication strategy in relation to the Direct Listing. As a broker dealer with full service investment banking and sales capabilities, and both institutional and retail distribution, Joseph Gunnar has agreed in its capacity as Advisor in connection with the Direct Listing to use its professional resources to support the company as a newly listed public company in identifying potential sources of open market buying and potential endorsement from investors who otherwise would not have had the opportunity to hear the equity story or meet the management team alternatively in a traditional IPO process. To accomplish this, the advisor will make a market in the Company's stock, conduct retail and institutional non-deal roadshows on an as agreed upon basis, and assist the company with strategic, corporate finance, and capital markets advice with the goal of further building the Company's shareholder base, increasing market awareness and exposure, communicating effectively with existing and prospective investors, and creating an orderly market for the trading of the company's shares in a sustainable manner with the goal of long term capital markets presence and success.

In connection with its engagement as our financial advisor, the Company has agreed to pay the Advisor a total fee equal to one percent (1%) of the total valuation of the Company (the "Advisory Fee"), as agreed upon by the Advisor and the Company, and as approved by Nasdaq, for the Direct Listing. Thirty percent of (30%) of the Advisory Fee shall be paid in cash upon consummation of the Direct Listing, the balance shall be paid in our common stock within five days thereafter with the number of shares payable being the value of the non-cash portion of the Advisory Fee divided by the volume weighted average price of our common stock for the initial two trading days of our common stock. None of such stock is being registered hereby and the Company and the Advisor have agreed that such stock shall be subject to a six-month lock-up.

The Advisor will not be engaged to otherwise facilitate or coordinate price discovery activities or the solicitation and/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.

We previously engaged Joseph Gunnar & Co., LLC., as placement agent (the "Placement Agent", for a private placement of the Company's preferred stock with accredited investors and qualified institutional buyers. On July 22, 2025, the Company entered into securities purchase agreements with six such investors. Such investors have agreed to purchase from the Company in the aggregate 100,000 shares of its Series A Convertible Preferred Stock (the "Series A Preferred") with a stated value of $10,000,000, together with 80,000 shares of Series B Convertible Preferred Stock, for an aggregate funding amount of $8,000,000. For so long as the Series A Preferred remains outstanding, it shall pay a cash dividend, monthly in arrears from the date of funding, at a rate of 5% per annum for months 1-6, 10% per annum for months 7-12, 15% per annum for months 13-18 and an additional 3% per month thereafter. The dividend may, at the investor's option, be paid in common stock at the then applicable conversion price.

Following consummation of the Direct Listing, the holders of the Series A Preferred may on the date that is forty-five (45) days after the consummation of the Direct Listing convert such preferred into common stock at a price per share equal to the lowest of (i) the price per share equal to a valuation of $56,000,000 (the "Valuation Cap"), (ii) 75% of the closing price of the common stock on the date of the Direct Listing, (iii) the closing price of the common stock on the day prior to any conversion and (iv) a 25% discount to the lowest five (5) day volume weighted average price of the common stock prior to any such conversion, subject to a conversion floor price of $4.00 per share. The holders may, however, begin converting Series A Preferred at any time in the event (x) the price of our common stock exceeds $8.00 per share and (y) the trading volume of our common stock exceeds 125,000 shares.

In addition, the purchasers of the Series A Preferred shall receive a bonus in the form of shares of our Series B Convertible Preferred Stock (the "Series B Preferred") .The Series B Preferred will be convertible into our common stock at any time at a conversion price equal to the lower of (i) the closing price of the stock on the day prior to conversion and (ii) the price per share of our common stock equal to the Valuation Cap.

For as long as the Series B Preferred is outstanding, if the Company raises additional capital the holders of Series B Preferred Stock may require the Company to use up to 25% of the proceeds from any financing to pay, in cash, a portion of any unconverted Series B Preferred. The Company shall offer this redemption opportunity to each holder of the Series B Preferred within one (1) business day from the closing of such financing, and such holder shall have one (1) business day to respond to the Company of its intention to redeem.

The shares of our common stock underlying the Series A Preferred and the Series B Preferred are being registered hereunder. The purchasers of the Series A Preferred and the Series B Preferred will not be subject to any lock-up arrangements with respect to such convertible preferred stock nor will they be subject to lock-up arrangements with respect to the common stock underlying such convertible preferred stock.

As compensation for the services provided by the Placement Agent, the Company has agreed to pay the Placement Agent on the date the placement is funded:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) A
 cash fee payable in U.S. dollars equal to eight percent (8.0%) of the gross proceeds received
 by the Company from investors in the private placement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) Non-redeemable
 warrants (the " <u>Placement Warrants</u> ") to purchase eighty thousand (80,000)
 shares of our common stock((the " <u>Warrant Shares</u> "). The Placement Warrants
 will be non-exercisable for six (6) months after the date of funding by the investors and
 thereafter will be exercisable until their expiration five (5) years after such date at a
 price per share of $8.00. The Placement Agent will be entitled to customary "piggyback"
 and a one-time demand registration rights and anti-dilution rights (for stock dividends and
 splits and recapitalizations) pursuant to FINRA Rule 5110. If so registered, the Placement
 Warrants and the underlying securities may not be transferred, assigned or hypothecated for
 a period of six (6) months following the date of effectiveness or commencement of sales of
 the public offering pursuant to FINRA Rule 5110(g)(1). The Placement Warrants may be exercised
 in whole or in part and, provide for "cashless exercise."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) Subject to
 compliance with FINRA Rule 5110(f)(2)(D, the Company also agreed to reimburse Joseph Gunnar
 for all of Joseph Gunnar's actual out-of-pocket accountable expenses upon receipt of
 reasonably acceptable evidence of such expenditures, including the reasonable fees of legal
 counsel of Joseph Gunnar and other out-of-pocket expenses up to a maximum of $50,000.

**LEGAL MATTERS**

The validity of the shares of common stock being offered hereby will be passed upon for us by Sichenzia Ross Ference Carmel LLP, New York, New York.

**INTERESTS OF NAMED EXPERTS AND COUNSEL**

Except as noted below, 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 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, voting trustee, director, officer, or employee.

Sichenzia Ross Ference Carmel LLP, counsel to the Company in connection with this initial registration statement, owns 90,000 shares of the Company's common stock. as partial payment for legal services rendered in connection with the registration of the common stock.

**EXPERTS**

The financial statements of our company included in this registration statement and have been audited by TAAD LLP an independent registered public accounting firm, as indicated in its report with respect thereto, and have been so included in reliance upon the report of such firm given on the authority of said firm as experts in accounting and auditing.

**WHERE YOU CAN FIND MORE INFORMATION**

We have filed a registration statement, of which this prospectus is a part, on Form S-1 with the SEC relating to this offering. This prospectus does not contain all of the information in the registration statement and the exhibits included with the registration statement. For further information pertaining to us and the securities to be sold in this offering, you should refer to the registration statement and its exhibits, portions of which have been omitted as permitted by SEC rules and regulations. References in this prospectus to any of our contracts, agreements or other documents are not necessarily complete, and you should refer to the exhibits attached to the registration statement for copies of the actual contracts, agreements or documents. The SEC maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that file with the SEC at http://www.sec.gov.

Upon the effectiveness of the registration statement, we will be subject to the informational requirements of the Exchange Act, and, in accordance with the Exchange Act, will file reports, proxy and information statements and other information with the SEC. Annual, quarterly and special reports, proxy and information statements and other information can be inspected and copied at the locations set forth above. We will also make these documents publicly available, free of charge, on our website at https://functionalbrandsinc.com/ as soon as reasonably practicable after filing such documents with the SEC. Information on, or accessible through, our website is not part of this prospectus.

**FUNCTIONAL BRANDS INC. (formerly HT Naturals Inc.)** 

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
| [**CONSOLIDATED BALANCE SHEETS (UNAUDITED)**](#f_002) | F-2 |
| [**CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)**](#f_003) | F-3 |
| [**CONSOLIDATED STATEMENTS OF CHANGES IN DEFICIT (UNAUDITED)**](#f_004) | F-4 |
| [**CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)**](#f_005) | F-5 |
| [**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**](#f_006) | F-6 - F-31 |

---

**FUNCTIONAL BRANDS INC. (formerly HT Naturals Inc.)**

**CONSOLIDATED BALANCE SHEETS**

**(UNAUDITED)** 

***(In U.S. Dollars, except share data or otherwise noted)***

 ****

---

| | | |
|:---|:---|:---|
|  | **June 30,** <br> **2025**  | **December 31, <br> 2024**  |
| **Assets** | | |
|  ***Current Assets:*** | | |
| &nbsp;&nbsp;&nbsp; Cash | $257683 | $211642 |
| &nbsp;&nbsp;&nbsp; Accounts receivable, net | 367587 | 303471 |
| &nbsp;&nbsp;&nbsp; Inventories, net | 1733353 | 1709458 |
| &nbsp;&nbsp;&nbsp; Prepaid expenses and other current assets | 68820 | 45112 |
| &nbsp;&nbsp;&nbsp; Deferred offering costs | 1128702 | 588641 |
|  ***Total current assets*** | **3556145** | **2858324** |
|  ***Noncurrent Assets:*** |  |  |
| &nbsp;&nbsp;&nbsp; Property and equipment, net | 38516 | 49564 |
| &nbsp;&nbsp;&nbsp; Right-of-use assets, net | 1837580 | 2000092 |
| &nbsp;&nbsp;&nbsp; Intangible assets, net | 1420476 | 1443541 |
| &nbsp;&nbsp;&nbsp; Goodwill | 818139 | 818139 |
| ***Total non-current assets*** <br>| **4114711** | **4311336** |
| **Total assets** | $**7670856** | $**7169660** |
| **Liabilities and Stockholder' Equity** |  |  |
|  ***Current Liabilities*** |  |  |
| &nbsp;&nbsp;&nbsp; Accounts payable & accrued liabilities | $2180005 | $1956165 |
| &nbsp;&nbsp;&nbsp; Line of credit | 16298 | 32235 |
| &nbsp;&nbsp;&nbsp; Government loans, current | 3515 | 3436 |
| &nbsp;&nbsp;&nbsp; Lease liabilities, current | 352490 | 291213 |
| &nbsp;&nbsp;&nbsp; Other current liabilities | 34400 | 35332 |
| &nbsp;&nbsp;&nbsp; Payable for acquisition, current | 2227367 | 2342366 |
| &nbsp;&nbsp;&nbsp; Loans payable (related parties), current | 56254 | 370703 |
| &nbsp;&nbsp;&nbsp; Loans payable | 505200 | 171500 |
| &nbsp;&nbsp;&nbsp; ***Total current liabilities***  | **5375529** | **5202950** |
|  ***Non-current Liabilities*** |  |  |
| &nbsp;&nbsp;&nbsp; Lease liabilities, net of current | 1622744 | 1844819 |
| &nbsp;&nbsp;&nbsp; Government loans, net of current | 138680 | 140468 |
| &nbsp;&nbsp;&nbsp; Loan payable (related parties), net of current | 276739 |  |
| &nbsp;&nbsp;&nbsp; Convertible debenture | - | 100000 |
| ***Total non-current liabilities*** <br>| **2038163** | **2085287** |
| **Total liabilities** | **7413692** | $**7288237** |
| **Stockholders' equity (deficit)** |  |  |
| &nbsp;&nbsp;&nbsp; *Common stock, par value $0.00001, authorized 220,000,000 shares; 7,027,255 and 6,694,880 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively* | 70 | 67 |
| &nbsp;&nbsp;&nbsp; *Blank check preferred Stock, par value $0.001, authorized 1,000,000 shares; 0 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively**  |  |  |
| &nbsp;&nbsp;&nbsp; *Series A Preferred par value $0.001, authorized 12,000 shares; 0 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively**  |  |  |
| &nbsp;&nbsp;&nbsp; *Series B Preferred par value $0.001, authorized 10,000 shares; 0 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively**  |  |  |
| &nbsp;&nbsp;&nbsp; Additional paid-in capital | 8270862 | 7542286 |
| &nbsp;&nbsp;&nbsp; Accumulated deficit | (8013768) | (7660930) |
| **Total Stockholders' Equity (Deficit)** | **257164** | **(118577)** |
| **Total liabilities and holders' equity (deficit)** | $**7670856** | $**7169660** |

---

 ****

The accompanying notes are an integral part of these Unaudited Consolidated Financial Statements.

**FUNCTIONAL BRANDS INC. (formerly HT Naturals Inc.)** 

**CONSOLIDATED STATEMENTS OF OPERATIONS**

**(UNAUDITED)**

***(In U.S. Dollars, except share data or otherwise noted)***

 ****

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended<br> June 30,** | **For the Six Months Ended<br> June 30,** |
|  | **2025** | **2024** |
| **Revenue, net of returns** | $3422789 | $3490446 |
| **Costs and expenses:** |  |  |
| **Cost of goods sold** | 1587928 | 1636792 |
| **Sales & marketing** | 343669 | 298217 |
| **General and administrative expenses** | 1678728 | 1430011 |
| **Operating income / (loss)** | **(187536)** | **125426** |
| **Interest expense** | (166106) | (119914) |
| **Interest income** | 804 | 963 |
| **Net income / (loss) for the periods** | $**(352838)** | $**6475** |
| **Net income (loss) per share of common stock attributable to common stockholders** |  |  |
| **Basic** | $**(0.05)** | $**-** |
| **Diluted** | $**(0.05)** | $**-** |
| **Weighted average shares used in computing net loss per share of common stock** |  |  |
| **Basic** | **6950923** | **6694493** |
| **Diluted** | **6950923** | **6904237** |

---

 ****

The accompanying notes are an integral part of these Unaudited Consolidated Financial Statements.

**FUNCTIONAL BRANDS INC. (formerly HT Naturals Inc.)** 

**CONSOLIDATED STATEMENTS OF CHANGES IN DEFICIT**

**(UNAUDITED)**

***(In U.S. Dollars, except share data or otherwise noted)***

 ****

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **No. of<br> Shares** | **Common<br> Stock** | **Preferred<br> Stock** | **APIC** | **Accumulated<br> Deficit** | **Total<br> Shareholders'<br> Equity** |
| December 31, 2023 | 6694493 | 67 |  | 7127386 | (7101574) | 25879 |
| Odd-lot rounding | 387 |  |  |  |  |  |
| Net income for the six months ended June 30, 2024 |  | **-** |  | **-** | 6475 | 6475 |
| **June 30, 2024** | **6694880** | **67** |  | $**7127386** | $**(7095099)** | $**32354** |

---

 ****

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **No. of<br> Shares** | **Common<br> Stock** | **Preferred<br> Stock** | **APIC** | **Accumulated<br> Deficit** | **Total<br> Shareholders'<br> Equity** |
| December 31, 2024 | 6694880 | 67 |  | 7542286 | (7660930) | (118577) |
| Stock based compensation | 180866 | 1 |  | 510354 |  | 510355 |
| Common stocked issued for convertible notes payable and accrued interest | 133441 | 1 |  | 122330 |  | 122331 |
| Common stock issued for financing expense | 18082 | 1 |  | 50629 |  | 50630 |
| Warrants issued for note extension |  | **-** |  | 45263 |  | 45263 |
| Net loss for the six months ended June 30, 2025 | - | - |  | - | (352838) | (352838) |
| **June 30, 2025** | **7027269** | **70** |  | **8270862** | **(8013768)** | **257164** |

---

 ****

The accompanying notes are an integral part of these Unaudited Consolidated Financial Statements.

**FUNCTIONAL BRANDS INC. (formerly HT Naturals Inc.)** 

**CONSOLIDATED STATEMENTS OF CASH FLOW**

**(UNAUDITED)**

***(In U.S. Dollars, except share data or otherwise noted)***

 ****

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** |
| **Cash flows from operating activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Net income / (loss) | $(352838) | $6475 |
| &nbsp;&nbsp;&nbsp;Reconcile net loss to cash provided by operating activities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Allowance for doubtful accounts receivable | (3796) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Allowance for inventory obsolescence | 12895 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation of property & equipment | 11048 | 27967 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of right-of-use assets | 162512 | 150339 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | 510356 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financing expense on warrant issuance | 45263 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of intangible assets | 23065 | 11532 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance of shares for financing expense | 50630 |  |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (60320) | (89154) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | (36790) | 27114 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 101292 | 16036 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable & Accrued liabilities | 346170 | 141435 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current liabilities | (932) | (35227) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lease liabilities | (160798) | (140893) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to / from related parties | **-** | (111780) |
| &nbsp;&nbsp;&nbsp;**Net cash provided by operating activities** | **647757** | **3844** |
| **Cash flows from investing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase of property and equipment | - | 1881 |
| &nbsp;&nbsp;&nbsp;**Net provided by in investing activities:** | **-** | **1881** |
| **Cash flows from financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment for deferred offering costs | (540061) | (22075) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from long-term debt | 100000 | 280000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments for payable for acquisition | (114999) | (145001) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from debt facilities | 73379 | 86662 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term debt repayment | (29010) | (2197) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Line of credit repayment | (89316) | (129140) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Government debt repayment | (1709) | (1631) |
| &nbsp;&nbsp;&nbsp;**Net cash provided by (used in) financing activities** | **(601716)** | **66618** |
| &nbsp;&nbsp;&nbsp;Net increase in cash | 46041 | 72343 |
| &nbsp;&nbsp;&nbsp;Cash beginning of year | 211642 | 374435 |
| &nbsp;&nbsp;&nbsp;**Cash, period end** | $**257683** | $**446778** |
| **Supplemental disclosures of cash flow information** |  |  |
| &nbsp;&nbsp;&nbsp;Cash paid for interest | 166106 | 117644 |
| **Non-cash investing and financing activities** |  |  |
| &nbsp;&nbsp;&nbsp;Common stock issued for convertible note payable and accrued interest | 122331 |  |
| &nbsp;&nbsp;&nbsp;Related-party loan | 225000 | - |

---

 ****

The accompanying notes are an integral part of these Unaudited Consolidated Financial Statements.

**FUNCTIONAL BRANDS INC. (formerly HT Naturals Inc.)** 

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**

**1.** **ORGANIZATION AND NATURE OF OPERATIONS** 

Functional Brands Inc. (formerly HT Naturals Inc. - the "Company") was organized under the General Corporation Law in the State of Delaware on November 19, 2020. The Company's principal business is in the production, marketing, sales, and distribution of smokable hemp related products in certain states within the United States of America that permit such sales.

On March 22, 2023, the Company changed its name from HT Naturals Inc. to Functional Brands Inc. to better reflect its corporate identity.

On January 22, 2025, the Company effected a reverse stock split in its authorized common stock on a basis of 1-for-18.338622. The authorized capital stock of the Company remained the same at 220,000,000 shares of common stock. All references to share and per share amounts in the consolidated financial statements and accompanying notes thereto have been retroactively restated to reflect the reverse stock split. In addition, the Company authorized 1,000,000 shares of blank check preferred $0.001 par value.

As of June 30, 2025 and December 31, 2024, the Consolidated Financial Statements consist of the Company and its wholly owned subsidiary HTO Nevada Inc. (d/b/a Kirkman), which is a nutraceutical manufacturer and distributor based in the Pacific Northwest. All intercompany transactions and balances have been eliminated in consolidation.

**2.** **GOING CONCERN** 

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As of June 30, 2025 the Company had a net loss of $352,838, negative working capital of 1,819,384, and an accumulated deficit of $8,013,768. These conditions raise substantial doubt about the Company's ability to continue as a going concern.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. The Company is significantly dependent upon its ability and attempt to secure additional equity and/or debt financing. There are no assurances that the Company will be successful in obtaining additional capital.

The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence. These financial statements do not include any adjustments that might arise from this uncertainty.

**3.** **BASIS OF PRESENTATION** 

**Basis of preparation and principles of consolidation** 

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 consolidated financial statements comprise the financial statements of the Company and only subsidiary, HTO Nevada Inc. Subsidiary consists of entity over which the Company is exposed to, or has rights to, variable returns as well as the ability to affect these returns through the power to direct the relevant activities of the entity. To the extent that subsidiaries provide services that relate to the Company's activities, they are fully consolidated from the date control is transferred and are deconsolidated from the date control ceases. All intercompany balances and transactions have been eliminated.

The financial statements of the subsidiary are prepared for the same reporting period as the parent company, using consistent accounting policies.

*Functional Brands Inc. (formerly HT Naturals Inc.)*

 

Functional Brands Inc. (formerly HT Naturals Inc.) is the parent company.

*HTO Nevada Inc. dba Kirkman*

 

The principal subsidiary is HTO Nevada Inc. dba Kirkman, which is solely owned by the Company.

As part of the restructuring efforts, ownership of HTO Nevada Inc. dba Kirkman was transferred from HTO Holdings Inc. to Functional Brands Inc. (formerly HT Naturals Inc.) on May 19, 2023, in exchange 4,362,378 common shares of the Company. This was retroactively recorded in 2019 as the acquisition was completed on July 3, 2019, with entities under common control.

&nbsp;&nbsp;&nbsp;&nbsp;**4.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** 

The significant accounting policies used in the preparation of these consolidated financial statements are described below.

**Cash**

Cash consists of cash in readily available checking accounts and deposits in transit. As of June 30, 2025, and December 31, 2024, cash balances were deposited at major and other financial institutions.

**Trade and other receivables**

Accounts receivables are stated at the amount the Company expects to collect from outstanding balances and do not bear interest. The Company provides for probable uncollectible amounts through an allowance for doubtful accounts, if an allowance is deemed necessary. The allowance for doubtful accounts is the Company's best estimate of the amount of probable credit losses in the Company's existing accounts receivable; however, changes in circumstances relating to accounts receivable may result in a requirement for additional allowances in the future. On a periodic basis, management evaluates its accounts receivable and determines the requirement for an allowance for doubtful accounts based on its assessment of the current and collectible status of individual accounts with past due balances over 90 days. Account balances are charged against the allowance after all collection efforts have been exhausted and the potential for recovery is considered remote. As of June 30, 2025 allowance for doubtful accounts decreased by $3,976 resulting in a balance of $0, and as of December 31, 2024 it decreased by $32,941 resulting in a balance of $3,796.

**Inventories** 

Inventory consists of raw materials, work in process and finished goods. Inventory is measured at the lower of cost or net realizable value. Inventory costs include direct labor and certain overhead expenses such as in-bound shipping and handling costs incurred to bring the inventory to its present location and conditions. Cost is determined by using the weighted average method. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. If the Company determines that the estimated net realizable value of its inventory is less than the carrying value of such inventory, it records a charge to impairment expenses.

**Property and equipment**

Property and equipment are stated at cost. Depreciation of property and equipment is recorded using the straight-line method over the assets' estimated useful lives. Computer equipment and capitalized software are depreciated over two to five years and furniture, and fixtures are depreciated over five years. Amortization of fixed assets under capital leases is included in depreciation expense.

The categories of capital assets are amortized on a straight-line basis as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Machinery
 & equipment 7
 years, straight-line

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Furniture
 & fixtures 7
 years, straight-line

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Computer
 equipment 5
 years, straight-line

The Company allocates the amount initially recognized in respect of a capital asset to its significant parts and amortizes separately each such part. Residual values, methods of amortization and useful lives of the capital assets are reviewed annually and adjusted if appropriate.

Gains and losses on disposals of capital assets are determined by comparing the proceeds with the carrying amount of the capital asset and are included in the consolidated statement of operations and comprehensive loss.

The assets' residual values, useful lives and methods of depreciation are reviewed at each fiscal year-end and adjusted prospectively if appropriate. An item of equipment is retired upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising on sale or retirement of the asset (calculated as the difference between the net disposal proceeds and the carrying value of the asset) is included in the consolidated statement of operations in the year the asset is retired. Such assets are tested annually for impairment, or more frequently, if events or changes in circumstances indicate that they might be impaired.

**Intangible Assets**

Intangible assets are recorded at cost, less accumulated amortization and impairment losses, if any. Intangible assets acquired in a business combination are measured at fair value at the acquisition date. Amortization is provided on a straight-line basis over their estimated useful lives, which do not exceed the contractual period, if any. Intangible assets that have indefinite useful lives are not subject to amortization and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. The estimated useful lives, residual values, and amortization methods are reviewed at each year end, and any changes in estimates are accounted for prospectively.

The categories of the intangible assets are amortized on a straight-line basis as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Customer
 relationships 10
 years

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● cGMP
 certification Indefinite
 life

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Goodwill
 (including Assembled Workforce) Indefinite
 life

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Kirkman
 brand Indefinite
 life

Expenditures in the research phase and post-development maintenance costs are expensed as incurred.

**Goodwill**

Goodwill arises from business combinations and is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any non-controlling interests in the acquire, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill acquired in a business combination is not amortized but tested for impairment at least annually or more frequently if events and circumstances exist that indicate that a goodwill impairment test should be performed.

Goodwill is tested for impairment at the reporting unit level. A reporting unit is an operating segment or one level below an operating segment (referred to as a component). We allocate goodwill to reporting units based on the reporting unit expected to benefit from the business combination. Assets and liabilities are assigned to each reporting unit if they are employed by a reporting unit and are considered in the determination of the reporting unit fair value. We have one reporting unit with goodwill, which is the Kirkman business.

The Company's indefinite-lived intangible assets are tested for impairment at the consolidated level. In evaluating the recoverability of the Kirkman Brand name and CGMP License, we compare the fair value of the asset to it carrying amount to determine potential impairment. The Company's estimate of the fair value of the Kirkman Brand name is derived using the income approach, specifically the relief-from-royalty method and the fair value of the CGMP License is derived using the income approach.

The fair value determination of the reporting units and the indefinite-lived intangible asset is judgmental in nature and requires the use of significant estimates and assumptions that are sensitive to changes. Assumptions include estimation of the royalty rate, estimation of future revenue and projected margins, which are dependent on internal cash flow forecasts, estimation of the terminal growth rates and capital spending, and determination of discount rates. As a result, there can be no assurance that the estimates and assumptions made for purposes of quantitative goodwill and indefinite-lived intangible impairment tests will prove to be an accurate prediction of future results. Examples of events or circumstances that could reasonably be expected to negatively affect the underlying key assumptions and ultimately impact the estimated fair value of the reporting units may include such items as: (i) volatility in the equity and debt markets or other macroeconomic factors, (ii) an increase in the weighted-average cost of capital due to further increases in interest rates, (iii) decrease in future cash flows due to lower than expected sales, or (iv) fluctuations in foreign currency exchange rates that may negatively impact the Company's reported results of operations. Accordingly, if the current cash flow assumptions are not realized, we experience further increases in costs of capital, it is possible that an additional impairment charge may be recorded in the future, which could be material. The Company did not record an impairment loss during the six months ended June 30, 2025, and 2024.

**Right-of-use Assets and Lease Liabilities** 

The Company recognizes right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated amortization and impairment losses, and adjusted for any re-measurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Unless the Company is reasonably certain to obtain ownership of the leased asset at the end of the lease term, right-of-use assets are amortized on a straight-line basis over the shorter of its estimated useful life and the lease term.

At the commencement date of the lease, the Company recognizes lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees, if applicable. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating a lease, if the lease term reflects the Company exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognized as occupancy expense in the period on which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is re-measured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset.

**Leases as lessee**

The Company determines if an arrangement is a lease at inception of an arrangement. Operating and finance lease assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. Lease assets represent the Company's right to use an underlying asset for the lease term, while lease liabilities represent the Company's obligation to make lease payments arising from the lease. The Company uses the internal incremental borrowing rate based on the information available at the lease commencement date, in determining the present value of lease payments. The length of a lease term includes options to extend or terminate the lease when it is reasonably certain the Company will exercise those options. The Company made an accounting policy election to not recognize lease assets or liabilities for leases with a term of 12 months or less. Additionally, when accounting for leases, the Company combines payments for leased assets, related services and other components of a lease. The Company applies a portfolio approach to determine the discount rate for leases with similar characteristics.

For leases classified as operating, the ROU asset is subsequently measured throughout the lease term at the carrying amount of the lease liability, plus unamortized initial direct costs, plus/(minus) any unamortized prepaid/(accrued) lease payments, less the unamortized balance of lease incentives received. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

For leases classified as finance leases, the ROU asset is subsequently amortized using the straight-line method from the lease commencement date to the earlier of the end of its useful life or the end of the lease term unless the lease transfers ownership of the underlying asset to the Company, or the Company is reasonably certain to exercise an option to purchase the underlying asset. In those cases, the ROU asset is amortized over the useful life of the underlying asset. The Company expects to exercise the options to purchase the assets which are leased under finance leases. Accordingly, these assets are included in property and equipment, and depreciation thereon is recognized as depreciation expense. When the Company makes contractually required payments under finance leases, a portion is allocated to reduce the finance lease obligation, and a portion is recognized as interest expense.

**Stock-based compensation plans**

The Company has a stock-based compensation plan that is used to compensate the Board, officers, employees and consultants for services rendered.

The restricted share units ("RSUs") are measured by reference to the fair value of the Company's Common Share at the date on which they are granted. In situations where equity instruments are issued to non-employees and the fair value of goods or services received by the entity as consideration cannot be estimated reliably, they are measured at fair value of the equity instruments granted.

The costs of equity settled transactions are recognized as expenses, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant party becomes fully entitled to the award.

No expense is recognized for performance-based awards that do not vest. Expense for service-based award is recognized upon vesting. Where the terms of an equity settled award are modified, the minimum expense recognized is the expense as if the terms had not been modified. An additional expense is recognized for any modification which increases the total fair value of the share-based payment arrangement or is otherwise beneficial to the employee as measured at the date of modification.

Compensation expense is recognized for all share-based payments to employees and non-employees, including restricted stock units, in the statements of operation based on the fair value of the awards that are granted. As necessary, the Company's stock price at the date of grant was estimated using an acceptable valuation technique such as a recent round of fundraising or the probability-weighted expected return model. The fair value of RSUs is determined at the date of grant using the price per share offered at the most recent round of fundraising, the Reg CF campaign.

Compensation expense for restricted stock awards with performance-based vesting conditions is calculated based on the number of awards that are expected to vest during the performance period if it is probable that the performance metrics will be achieved. Generally, measured compensation cost, net of actual forfeitures, is recognized on a straight-line basis over the vesting period of the related share-based compensation award. The Company accounts for forfeitures of stock-based awards as they occur.

**Revenue recognition**

We account for revenue in accordance with the Financial Accounting Standards Board ("FASB") Accounting Standard Codification Topic 606, "Revenue from Contracts with Customers". Revenue is measured based on the amount of consideration that we expect to receive, reduced by discounts and estimates for credits and returns (calculated based upon previous experience and management's evaluation). Outbound shipping charged to customers is recognized at the time the related merchandise revenues are recognized and are included in net revenues.

Per Company policy, any product that doesn't meet the customer's expectations can be returned within the first 30 days of delivery in exchange for another product or for a full refund. Any product sold through a distributor or retailer must be returned to the original purchase location for any return or exchange. For the quarter ended June 30, 2025 and 2024, the Company did not record any reserves on revenue.

**Earning / Loss per Share**

Basic net loss per common share is calculated by dividing the net loss distributed to the common class, by the weighted-average number of common shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares and potentially dilutive securities outstanding for the period.

For purposes of the diluted net loss per share calculation, restricted stock units (RSUs) are considered to be potentially dilutive securities. As of June 30, 2025, there were 83,189 RSUs, of potentially common stock equivalents excluded from the diluted loss per share calculations as their effect is anti-dilutive. Since the Company has reported a net loss for the six months ended June 30, 2025, the diluted net loss per common share is the same as basic net loss per common share for this period.

The following is a reconciliation of the numerator and denominator used in the basic and diluted earnings per share ("EPS") calculations for the six months ended June 30, 2025 and 2024.

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended<br> June 30,** | **Six Months Ended<br> June 30,** |
|  | **2025** | **2024** |
| **Numerator:** |  |  |
| &nbsp;&nbsp;&nbsp;Net income (loss) | $(352838) | $6475 |
| **Denominator:** |  |  |
| &nbsp;&nbsp;&nbsp;Weighted-average shares of common stock | 6950923 | 6694493 |
| &nbsp;&nbsp;&nbsp;Dilutive effect of RSUs |  | 81771 |
| &nbsp;&nbsp;&nbsp;Dilutive effect of Warrants |  |  |
| &nbsp;&nbsp;&nbsp;Dilutive effect of convertible instruments | - | 127973 |
| &nbsp;&nbsp;&nbsp;Diluted weighted average of common stock | 6950923 | 6904237 |
| **Net income (loss) per common share from:** |  |  |
| &nbsp;&nbsp;&nbsp;Basic | $**(0.05)** | $**0.00** |
| &nbsp;&nbsp;&nbsp;Diluted | $**(0.05)** | $**0.00** |

---

**Business Combinations**

Business combinations are accounted for using the acquisition method. The fair value of total purchase consideration is allocated to the fair values of identifiable tangible and intangible assets acquired and liabilities assumed, with the remaining amount being classified as goodwill. All assets, liabilities and contingent liabilities acquired or assumed in a business combination are recorded at their fair values at the date of acquisition. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates, and selection of comparable companies. Estimates of fair value are based on assumptions believed to be reasonable, but are inherently uncertain and unpredictable and, as a result, actual results may differ from those estimates. During the measurement period, not to exceed one year from the date of acquisition, the Company may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill. At the conclusion of the measurement period, any subsequent adjustments are reflected in the statements of operations. Transaction costs associated with business combinations are expensed as incurred and are included in general and administrative expenses in the Company's statements of operations.

**Significant accounting estimates and judgments**

The most significant judgements made in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements include:

● Obsolescence of inventories

● Recoverability of the carrying value of long-lived assets including property & equipment and intangible assets

● Recoverability of carrying value of goodwill

● Discount rate used to calculate present value of future minimum lease payments for right-of-use asset and liabilities

● Recognition and measurement of provisions and contingencies

● Valuation of deferred income tax assets

*Inventories, net*

The Company periodically reviews the value of items in inventory and provides write-downs or write-offs of inventory based on its assessment of market conditions, including forecasted demand compared to quantities on hand, as well as other factors such as potential excess or aged inventories based on product shelf life, and other factors that affect inventory obsolescence. For the six months ended June 30, 2025 The allowance for inventory obsolescence increased by $12,895 resulting in a reserve of $77,722. For the year ended December 31, 2024 the inventory reserve was $64,827.

 ****

*Long-Lived Assets*

Long-lived assets consist primarily of property and equipment. Long-lived assets are tested for impairment when events and circumstances indicate the assets might be impaired by first comparing the estimated future undiscounted cash flows of the asset or asset group to the carrying value. If the carrying value exceeds the estimated future undiscounted cash flows, an impairment loss is recognized based on the amount that the carrying value exceeds the fair value of the asset or asset group. The Company did not recognize impairment losses during the six months ended June 30, 2025, and 2024.

*Fair value of financial instruments*

The individual fair values attributed to the different components of a financing transaction, notably investment in equity securities, derivative financial instruments, convertible debt and loans, are determined using valuation techniques. The Company uses judgment to select the methods used to make certain assumptions and in performing the fair value calculations in order to determine (a) the values attributed to each component of a transaction at the time of their issuance; (b) the fair value measurements for certain instruments that require subsequent measurement at fair value on a recurring basis; and (c) for disclosing the fair value of financial instruments subsequently carried at amortized cost. These valuation estimates could be significantly different because of the use of judgment and the inherent uncertainty in estimating the fair value of these instruments that are not quoted in an active market.

As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

*Segment Reporting*

In November 2023, the FASB issued ASU 2023-07, *Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,* which requires entities to report incremental information about significant segment expenses included in a segment's profit or loss measure as well as the title and position of the chief operating decision maker ("CODM"). The new standard also requires interim disclosures related to reportable segment profit or loss and assets that had previously only been disclosed annually. The Company adopted ASU 2023-07 effective December 31, 2024 on a retrospective basis.

 

*Income taxes*

The Company must exercise judgment in determining the provision for income taxes. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Company recognizes liabilities and contingencies for expected tax audit issues based on the Company's current understanding of the tax law. For matters where it is probable that an adjustment will be made, the Company records its best estimate of the tax liability including the related interest and penalties in the current tax provision.

In addition, the Company recognizes deferred tax assets relating to tax losses carried forward to the extent there are sufficient taxable temporary differences (deferred tax liabilities) relating to the same taxation authority and the same taxable entity against which the unused tax losses can be utilized. However, utilization of the tax losses also depends on the ability of the taxable entity to satisfy certain tests at the time the losses are recouped.

**Risks and uncertainties**

The Company's business and operations are sensitive to general business and economic conditions in the U.S. and worldwide along with local, state, and federal governmental policy decisions. A host of factors beyond the Company's control could cause fluctuations in these conditions. Adverse conditions may include but are not limited to changes in US laws surrounding the sale of smokable CBG/CBD products, consumer demand, and COVID-19 issues more fully described below. These adverse conditions could affect the Company's consolidated financial condition and the results of its operations.

**5.** **CASH** 

Cash consists of liquid funds and deposits in transit.

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2025** | **December 31, <br> 2024** |
| Cash | $256187 | $206890 |
| Deposits in transit | 1496 | 4752 |
| **Total Cash** | $**257683** | $**211642** |

---

**6.** **ACCOUNTS RECEIVABLE, NET** 

Accounts receivable consists of trade receivables, net of allowance.

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2025** | **December 31, <br> 2024** |
| Trade receivables | $367587 | $307267 |
| Allowance for doubtful accounts | - | (3796) |
| **Accounts receivable, net** | $367587 | $303471 |

---

This allowance is continually re-evaluated and adjusted as necessary.

**7.** **INVENTORIES, NET** 

Inventories consisted of raw materials (minerals – magnesium, Calcium, vitamins, botanical extracts, hemp, trim and flower – CBG and CBD), finished goods (capsules, tablets, powders, creams, cigs, gummies, tinctures, pre-rolls, and vapes) and packaging & supplies (bottles, labels, covers, filters, tipping paper and packaging materials).

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2025** | **December 31, <br> 2024** |
| Raw materials | $465980 | $472296 |
| Packaging, supplies & other | 240290 | 231912 |
| Finished goods | 1104805 | 1070077 |
| Allowance for inventory obsolescence | (77722) | (64827) |
| **Total Inventories, net** | $**1733353** | $**1709458** |

---

The allowance for inventory obsolescence is continually re-evaluated and adjusted as necessary.

**8.** **PREPAIDS & OTHER CURRENT ASSETS** 

Balance consists of prepayments made to vendors and legal retainers.

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2025** | **December 31,<br> 2024** |
| Prepaids & deposits | $68713 | $45005 |
| Other current assets | 107 | 107 |
| **Total prepaids and other current assets** | $**68820** | $**45112** |

---

**9.** **DEFERRED OFFERING COSTS** 

Schedule below represent capitalization of deferred cost incurred for the preparation of Initial Public Offering ("IPO"):

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2025** | **December 31,<br> 2024** |
| Legal services | $661682 | $364669 |
| Professional services | 467020 | 223972 |
| **Total Deferred cost** | $**1128702** | $**588641** |

---

**10.** **PROPERTY & EQUIPMENT** 

Property and equipment consist of the following:

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2025** | **December 31, <br> 2024** |
| Furniture & Fixtures | $3302 | $3302 |
| Computer Equipment | 30988 | 30988 |
| Machinery & Equipment | 730508 | 730508 |
| **Total property and equipment, gross** | **764798** | **764798** |
| Less: Accumulated depreciation | (726282) | (715234) |
| **Property and equipment, net** | $**38516** | $**49564** |

---

Depreciation expenses totaled $11,048 and $27,967 for the six months ended June 30, 2025 and 2024, respectively.

**11.** **RIGHT-OF-USE ASSETS & LEASE LIABILITY** 

Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The following are the expected lease payments as of June 30, 2025. The lease is considered an "operating lease" and consequently lease payments are calculated on a straight-line basis, including the total amount of interest related.

The movement in the right-of-use assets is as follows:

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2025** | **December 31, <br> 2024** |
| <u>Right of use assets:</u> |  |  |
| Right of use assets recognized as of January 1**<sup>st</sup>** | $2000092 | $2307027 |
| Additions |  |  |
| Amortization Expense | (162512) | (306935) |
| **Right of use assets, net** | $**1837580** | $**2000092** |

---

Lease amortization expense on the straight-line basis was $162,512 and $150,339 during the six months ended June 30, 2025 and 2024 respectively.

The movement in lease liability is as follows:

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2025** | **December 31, <br> 2024** |
| Lease liabilities recognized as of January 1**<sup>st</sup>** | $2136032 | $2397047 |
| Additions |  |  |
| Lease payments | (160798) | (261015) |
| **Lease liabilities at period end** | **1975234** | **2136032** |
| Less: current portion | (352490) | (291213) |
| **Long-term portion** | $**1622744** | $**1844819** |

---

The following table presents information about the future maturity of the lease liabilities under the Company's operating and financing leases as of June 30, 2025.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Maturity of Lease Liabilities** | **1.<br> Operating<br> Facility** | **2. Office<br> Equipment** | **3. Office<br> Equipment** | **Total<br> Amount** |
| **2025** | $237364 | $14425 | $534 | $252323 |
| **2026** | 488887 | 24984 | 890 | 514761 |
| **2027** | 503349 |  |  | 503349 |
| **2028 and beyond** | 1142785 | - | - | 1142785 |
| **Total future minimum lease payments** | **2372385** | **39409** | **1424** | **2413218** |
| **Less: Imputed interest** | (435758) | (2150) | (77) | (437984) |
| **Present value of lease liabilities** | $**1936627** | $**37259** | $**1347** | $**1975234** |
| **Remaining lease term (in years)** | 5.09 | 1.75 | 1.75 |  |

---

Right-of-use assets and lease liabilities comprise three leases.

LEASE 1 – OPERATING FACILITY

On January 1, 2023, the Company entered a 7-year and 2-months lease to lease approximately 24,400 square feet industrial building containing 9,095 square feet of office space and 9,663 square feet of production area. At inception of the lease, the Company recorded a right of use asset and liability. The Company used an effective borrowing rate of 9.0% within the calculation.

The base monthly rent is $28,114 per month, with subsequent annual increases of 3%. Operating expense came to $11,447 per month for 2025 incurred by the lessee.

LEASES 2 & 3 – OFFICE EQUIPMENT

On September 30, 2021, the Company entered into a 5-year lease to lease office equipment that consists of four copiers for daily office use. At inception of the lease, the Company recorded a right of use asset and liability. The Company used an effective borrowing rate of 9.0% within the calculation.

The base monthly payment amount is $2,357 per month, with subsequent annual increases of 6%. Operating expense came to $653 per month for 2025 incurred by the lessee.

On March 14, 2022, the Company also entered into a 4-year and 7-months lease agreement to lease a Paper Source Accessory for daily office use to complement the previous office equipment discussed above. At inception of the lease, the Company recorded a right of use asset and liability. The Company used an effective borrowing rate of 9.0% within the calculation. The base monthly payment amount is $89 per month, with no subsequent annual increases.

**12.** **BUSINESS COMBINATION** 

On July 3, 2019, the Company entered into an asset purchase agreement (the "APA") with the Kirkman Group Inc. ("Kirkman") to acquire certain tangible and intangible assets for a purchase price of $5,000,000. The present value of the acquisition fair value of the deferred cash payment transferred for Kirkman was $4,329,317, which consisted of the following:

**Kirkman Group Inc.** 

---

| | |
|:---|:---|
| **Purchase consideration** | **Fair Value** |
| Cash | $1250000 |
| Deferred cash payment - $750,000 raise or 1<sup>st</sup> anniversary of closing | 722388 |
| Deferred cash payment - $1,500,000 on 1<sup>st</sup> anniversary of closing | 1270649 |
| Deferred cash payment - $1,500,000 on 2<sup>nd</sup> anniversary of closing | 1086280 |
| Total consideration - $5,000,000 | $**4329317** |

---

 

The following table summarizes the finalized fair value of assets acquired, and liabilities assumed as of the date of the acquisition in 2019:

**Kirkman Group Inc.**

---

| | |
|:---|:---|
| **Purchase consideration** | **Fair Value** |
| Net assets | $1513878 |
| Kirkman brand | 1226000 |
| cGMP certification | 310000 |
| Customer relationships | 461300 |
| Net assets acquired | 3511178 |
| Goodwill | 818139 |
| Total Consideration | $**4329317** |

---

The excess of purchase consideration over the fair value of net assets acquired was recorded as goodwill which is not deductible for tax purposes.

*Payable for acquisition*

As of June 30, 2025 and December 31, 2024, the Company owed $2,227,367 and $2,342,366, respectively, in connection with the aforementioned APA, which is due in its entirety on August 30, 2025, subject to the Forbearance Agreement and Confession of Judgement, executed on July 9, 2025.

The Forbearance Agreement allows the seller to postpone the payment of principal balance without pursuing rights under the APA and the Confession of Judgement allowed the seller to enter a judgement against the Company in The Circuit Court of The State of Oregon for the County of Clackamas.

The execution of these documents will impact the Company if it fails to settle the balance owed by the due date, August 30, 2025. As a result, the seller has the right to foreclose on the business.

**13.** **INTANGIBLE ASSETS & GOODWILL** 

Balance consists of intangible assets acquired from acquisition of Kirkman in July 2019. The Kirkman brand and the cGMP certification were assigned an indefinite useful life, whereas the customer relationships were assigned a life span of 10 years.

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2025** | **December 31, <br> 2024** |
| Kirkman brand, net | $925700 | $925700 |
| cGMP certification | 310000 | 310000 |
| Customer relationships | 461300 | 461300 |
| **Total intangible assets, gross** | **1697000** | **1697000** |
| Less: Accumulated amortization: Customer relationships | (276524) | (253459) |
| **Intangible assets, net** | $**1420476** | $**1443541** |

---

There were no impairments to the intangible assets during the six months ended June 30, 2025 and 2024.

Balance consists of goodwill (including assembled workforce) acquired from acquisition of Kirkman in July 2019 which was assigned an indefinite useful life.

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2025** | **December 31,<br> 2024** |
| **Goodwill** | $**818139** | $**818139** |

---

There were no impairments to goodwill during the six months ended June 30, 2025 and 2024.

**14.** **ACCOUNTS PAYABLE & ACCRUED LIABILITIES** 

Balance consists of trade payables and accruals.

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2025** | **December 31, <br> 2024** |
| **Trade payables** | $1410179 | $1103359 |
| **Accrued liabilities** | 684326 | 741106 |
| **Accrued compensation - shares earned but not issued** | 85500 | 111700 |
|  | $**2180005** | $**1956165** |

---

Accrued liabilities are comprised of accruals for consulting/advisory, professional and audit services and accrued interest loan payable.

**15.** **LINES OF CREDIT** 

During the year ended December 31, 2024 the Company entered into multiple agreements with a third party to finance invoices to satisfy multiple vendors of which the following agreements are to be repaid during the year ended December 31, 2025.

On January 20, 2023, the Company entered a line of credit agreement with a third-party whereby the Company received $300,000. The terms of the loan were for one year, with a 27% contract interest rate. On January 22, 2024, the loan was settled in full, at which point the security interest was released by the lender.

On July 14, 2023, the Company entered into an additional line of credit agreement with a third-party whereby the Company received $100,000. The terms of the loan were for 42 weeks, with a 5% contract interest rate. On July 7, 2024, the loan was settled in full, at which point the security interest was released by the lender.

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2025** | **December 31, <br> 2024** |
| Line of credit recognized as of January 1 | 32235 | $68315 |
| Proceeds from debt facilities | 73379 | 180662 |
| Payments on debt facilities | (89316) | (216742) |
| **Line of credit as of June 30** | **16298** | **32235** |
| **Less: current portion** | **(16298)** | **(32235)** |
| **Long-term portion** | $**-** | $**-** |

---

The Company has the following line of credit commitments as of June 30, 2025.

---

| | | | |
|:---|:---|:---|:---|
| **Agreement Date** | **Principal Amount** | **Finance Charge** | **End Date** |
| &nbsp;&nbsp;February 11, 2025 | $33002 | $2310 | &nbsp;&nbsp;July 12, 2025 |
| &nbsp;&nbsp;April 1, 2025 | $24432 | $2199 | &nbsp;&nbsp;September 29, 2025 |

---

**16.** **GOVERNMENT LOANS PAYABLE** 

On July 7, 2020, Kirkman applied and was granted thirty (30) year loan from the U.S. Small Business Administration for $150,000 with an interest of 3.75% per annum accrued daily, to alleviate financial burden caused due to COVID-19.

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2025** | **December 31, <br> 2024** |
| Government loans recognized as of January 1 | $143904 | $147168 |
| Proceeds from debt facilities |  |  |
| Payments on debt facilities | (1709) | (3264) |
| **Government loans at December 31** | **142195** | **143904** |
| Less: current portion | (3515) | (3436) |
| **Long-term portion** | $**138680** | $**140468** |

---

The Company has the following government loan commitments as of June 30, 2025.

---

| | |
|:---|:---|
|  | **Amount** |
| 2025 | $1727 |
| 2026 | 3595 |
| 2027 | 3702 |
| 2028 and beyond | 133171 |
| **Total** | $**142195** |

---

**17.** **OTHER CURRENT LIABILITIES** 

Balance consists of credit cards, employee benefits and sales tax payable.

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2025** | **December 31, <br> 2024** |
| Credit cards | $25971 | $30786 |
| Sales tax | 1652 | 1422 |
| Other | 6777 | 3124 |
| **Total other current liabilities** | $**34400** | $**35332** |

---

**18.** **LOANS PAYABLE (RELATED PARTY)** 

On March 11, 2024, the Company executed a loan agreement with a related party in the amount of $130,000, with an annual interest rate of 20% and a due date of March 11, 2031.

On March 10, 2025, the Company executed a loan agreement with a related party in the amount of $225,000, with an annual interest rate of 18% and a due date of March 7, 2029.

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br> **2025** | **December 31, <br> 2024** |
| **Related parties loan as of January 1** | $370703 | $247634 |
| Loan agreement executed with related parties during the periods | 225000 | 130000 |
| Reclass to loan payable | (247634) |  |
| Payments to related parties | (15076) | (6931) |
| **Related parties as of period end** | **332993** | **370703** |
| **Less: current portion** | (56254) | (370703) |
| **Long-term portion** | $**276739** | $**-** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**19.** **LOAN PAYABLE** 

In December 2023, the Company entered into a short-term debt facility with an officer and director of the parent company – Hemptown Organics Corp., whereby the Company received $247,634. The loan is non-interest-bearing and remains outstanding as of June 30, 2025. The officer and director resigned in January 2025, and therefore the loan was reclassed from related party to loans payable.

On June 18, 2024, the Company executed a loan agreement with a lender in the amount of $150,000. The payment terms are 12.5% Original Issue Discount ("OID"), initial principal amount consisting of a $150,000 loan plus $21,500 OID totaling $171,500. In addition, the loan required the Company to issue 37,500 warrants with anti-dilution protection as well as an equity interest in the amount of 2,045 shares of the Company's stock with reverse split protection through the Senior Exchange Listing

The loan is to mature the earlier of six months from execution, completion of a senior exchange listing of the Company or as mutually agreed, with an interest rate of the higher of 12% or WSJ Prime plus 4% guaranteed.

On December 11, 2024, the Company signed an amendment with the lender to extend the maturity date to February 28, 2025. In consideration for the extension of the maturity date, the Company agreed that the loan shall be paid in cash in full and shall not be converted into stock. In addition, the Company shall deliver 20,000 shares of the Company's common stock and a cash fee of $10,000.

On March 10, 2025, the Company signed an extension with a lender to extend the maturity date to May 15, 2025. In consideration for the extension of the maturity date, the Company agreed that the loan shall be paid in cash in full and shall not be converted into stock. In addition, the Company shall deliver a cash fee of $10,000. In addition, the Company issued the lender a total of 37,500 warrants at an exercise price of $8.50 per share. The warrants carry a term of 5 years, exercisable in whole or in part at any time or times during the exercise period – on or after the initial date of issuance and on or before the termination date. The warrants were assessed at a value of $23,138 based on the Black-Scholes pricing model. As of June 30, 2025, the Company recognized $23,138 in expenses related to the vesting of these warrants.

On April 29, 2025 the Company entered into a loan agreement with a third-party whereby the Company received $100,000. The term of the loan is for 1 year with a 22.95% finance charge.

On June 1, 2025, the Company signed an extension with a lender to extend the maturity date to August 15, 2025. In consideration for the extension of the maturity date, the Company agreed that the loan shall be paid in cash in full and shall not be converted into stock. In addition, the Company will owe an additional $10,000 cash fee on the maturity date. In addition, the Company issued the lender a total of 37,500 warrants at an exercise price of $8.50 per share. The warrants carry a term of 5 years, exercisable in whole or in part at any time or times during the exercise period – on or after the initial date of issuance and on or before the termination date. The warrants were assessed at a value of $22,125 based on the Black-Scholes pricing model. As of June 30, 2025, the Company recognized $45,263 in expenses related to the vesting of these warrants.

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br> **2025** | **December 31, <br> 2024** |
| **Loan payables as of January 1** | $171500 | $171500 |
| Loan agreement executed during the periods | 100000 |  |
| Reclass to loan payable | 247634 |  |
| Payments to related parties | (13934) | - |
| **Loan payable as of June 30** | **505200** | **171500** |
| **Less: current portion** |  |  |
| **Long-term portion** | $**505200** | $**171500** |

---

**20.** **CONVERTIBLE DEBENTURE** 

On October 7, 2022, the Company entered into Convertible Debenture Purchase Agreements pursuant to which the Company issued unsecured convertible promissory note ("Convertible Debenture"). The Company issued Convertible Debenture in the aggregate principal amount of $100,000 that was used to pay the expenses of the organization and reorganization and for other general corporate purposes. Interest accrued on the principal balance of the Convertible Debenture at 10.0% per annum totaled $2,338. The Convertible Debenture ranks on a parity with the Company's other existing debt and matured on December 31, 2022. The Convertible Debenture was to convert the outstanding principal and accrued interest into shares of the Company's common stock on maturity date at a price per share equal to $0.92 per share, however the maturity was delayed at the request of the debenture holder. As of December 31, 2024, the holder had still not converted the debenture.

On January 17, 2025, the holder of its Convertible Debenture converted an aggregate principal amount of $100,000 and accrued interest of $22,331 into 133,441 shares of common stock at a price equal to $0.91693 per share.

As of June 30, 2025, the Company has no outstanding debentures.

**21.** **RELATED PARTY TRANSACTIONS** 

**Executive contracts** 

We have entered into contractual agreements with our CEO and CFO.

*Employment Agreement – CEO* 

Effective as of March 11, 2025, the employment agreement has an original term of 12 months subject to automatic renewal unless terminated for cause. Effective upon achieving the Direct Listing, Mr. Gripentrog's annual salary will increase to $360,000. He is also entitled to an annual bonus up to 100% of his annual salary as determined by the Compensation Committee in its discretion. Mr. Gripentrog is also entitled to a performance-based equity awards based upon achieving the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Restricted Stock Units equal to
 $500,000 which vest six (6) months after the completion of the Direct Listing and valued
 at the price of the stock upon the date of vesting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) The value of $500,000 worth of
 Company common stock upon closing of each acquisition post Direct Listing with such shares
 valued at the price of the Company's stock upon completion of the acquisition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) The value of $250,000 worth of
 Company common stock upon the Company achieving positive EBIDTA for the first time in any
 calendar year with such shares valued at the price of the Company's stock at the end
 of such calendar year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) The value of $1,000,000 worth of
 Company common stock upon the Company achieving a positive EBIDTA of $5 million for the first
 time in any calendar year with such shares valued at the price of the Company's stock
 at the end of such calendar year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) The value of $1,000,000 worth of
 Company common stock upon the Company achieving a first-time market valuation of $100 Million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The value of $2,500,000 worth
 of Company common stock upon the Company achieving a first-time market valuation of $250
 Million.

*Employment Agreement – CFO*

Effective as of April 1, 2023, the employment agreement has an original term of 12 months subject to automatic renewal unless terminated for cause. The CFO will be issued 27,265 restricted stock units with an exercise price and vesting period to be determined after the initial public offering and 190,854 stock options with an exercise price and date of issuance to be determined by the Company's board of directors, with an expiration term of three years after termination of the employment agreement unless terminated for cause. The CFO is also entitled to a performance-based bonus payout as set forth in the chart below, after giving effect to the Reverse Stock Split:

---

| | |
|:---|:---|
| **Consolidated Revenue Target (USD)** | **Functional Brands Inc. Stock Payout (common shares)** |
| Below $10,000,000 | 27265 |
| $10000000 | 54530 |
| $15000000 | 81795 |
| $20000000 | 109059 |
| $25000000 | 136324 |
| $30000000 | 163589 |
| $35000000 | 190854 |
| $40000000 | 218119 |

---

&nbsp;&nbsp;&nbsp;&nbsp;**22.** **SHARE CAPITAL** 

**Authorized share capital**

*Common Shares*

Upon incorporation, the Company authorized 54,530 common shares with a par value of $0.001 per share were initially authorized for issuance. The Initial Share of the Company was allotted and issued to a former director of the Company as fully paid on November 19, 2020, the date of the organization. The issuance of the Initial Share was recorded in the central securities register of the Company and represents the only share initially issued. The Company purchased the Initial Share from a former director for the price of $0.01 and the Initial Shared formed part of the authorized but unissued share capital of the Company. The repurchase of the Incorporator's Share was recorded in the central securities register of the Company and the director confirms that no share certificate was issued or shall be issued in respect of the Initial Share.

On December 10, 2020, the Company altered its authorized share capital to 100,000,000 common shares with a par value of $0.00001 per share to be issued from its treasury.

On August 31, 2023, this was changed to 220,000,000 common shares with a par value of $0.00001 per share to be issued from its treasury.

On January 21, 2025, the Company effected a reverse stock split in its authorized common stock on a basis of 1-for-18.338622. The authorized capital stock of the Company remained the same at 220,000,000 shares of common stock. All references to share and per share amounts in the consolidated financial statements and accompanying notes thereto have been retroactively restated to reflect the reverse stock split. In addition, the Company authorized 1,000,000 shares of blank check preferred $0.001 par value.

All Common Shares are entitled to one vote in respect to each Common Share held at all meetings of shareholders of the Company.

*Preferred Shares*

On January 22, 2025, the Company authorized 1,000,000 blank check preferred stock at a par value of $0.001 per share.

On July 18, 2025, the Company authorized 12,000 Series A Preferred stock and 10,000 Series B Preferred stock, at a par value of $0.00001 per share.

**Issued share capital**

*Common share issuances*

On December 10, 2020, the Company entered into a licensing agreement with Hemptown Organics Corp. (the "licensor") to use the Hemptown Naturals brand (the "asset") on a non-exclusive, non-transferable basis for a period of 4 years. In return, 2,181,189 common shares were issued to the licensor at $0.018339 per share with deemed proceeds of $40,000 as consideration.

On May 19, 2023, the Company entered into a Share Exchange Agreement (SEA) to acquire HTO Nevada Inc. dba Kirkman from a related party, Hemptown Organics Corp. and its wholly owned subsidiary, HTO Holdings Inc. As part this SEA, HTO Holdings Inc. exchanged 1,000 restricted shares of common stock, par value $0.0001 per share of HTO Nevada Inc. dba Kirkman, being all of the issued and outstanding capital stock of HTO Nevada Inc. dba Kirkman, for issuance of 4,362,378 restricted shares of common stock of Functional Brands Inc., $0.018339 par value per share to Hemptown Organics Crop., with deemed proceeds of $80,000 as consideration, such that, HTO Nevada Inc. dba Kirkman shall be wholly-owned subsidiary of Functional Brands Inc. This was retroactively recorded in 2019 as the acquisition was completed on July 3, 2019.

This SEA was in respect of the asset purchase agreement (the "APA") the Company entered into on July 3, 2019, with the Kirkman Group ("Kirkman") to acquire certain tangible and intangible assets.

*Regulation Crowdfunding (Reg CF) Campaign*

 

Under the Securities Act of 1933, the offer and sale of securities must be registered unless an exemption from registration is available. Title III of the Jumpstart Our Business Startups (JOBS) Act of 2012 added Securities Act Section 4(a)(6) that provides and exemption from registration for certain crowdfunding transactions. The Company is currently completing a Regulation Crowdfunding offering ("Offering") subject to the above regulations and had filed its Offering statement on Form C through the EDGAR system and with the Title3Funds.com as intermediary.

The Offering was for a maximum of $5,000,000 at a price of $25.67 per share with an offering deadline of December 31, 2022, which was extended to May 31, 2023. The securities purchased in this Offering will be subject to a number of restrictions including restrictions on resale for a period of one year. The use of the proceeds will be towards the fees associated with this Offering, further development of the Company's business – sales & marketing, and for general working capital purposes.

During the six months ended June 30, 2025, the Company did not issue any common shares stemming from the Reg CF campaign.

*Regulation D (Reg D) Campaign*

During the six months ended June 30, 2025, the Company did not issue any common shares stemming from the Reg D campaign.

**Stock based compensation**

*Restricted Stock Units (RSUs) for services* 

---

| | | |
|:---|:---|:---|
|  | **Number of<br> shares RSUs** | **Share Capital** |
| RSUs issued for services rendered in prior years | 1216 | 3405 |
| RSUs issued for services rendered during the six months ended June 30, 2025 | 203 | 565 |
| **Total issuance for the six months ended June 30, 2025** | **1419** | **3970** |

---

For the six months ended June 30, 2025, the change in additional paid-in capital was $3,970 in respect of RSUs issued for services incurred during the period as well as the issuance of RSUs which were accrued but not yet issued from prior years.

*Shares for Services*

---

| | | |
|:---|:---|:---|
|  | **Number of<br> shares** | **Share Capital** |
| Common stock issued for professional services | 4446 | $12410 |
| Common stock issued for consulting services | 86420 | 241975 |
| Common stock issued for legal services | 90000 | 252000 |
| **Total issuance for services for the six months ended June 30, 2025** | **180866** | $**506385** |

---

Stock based compensation is comprised of 1,419 RSUs and 180,852 common shares issued for services rendered during the six months ended June 30, 2025, resulting in a change in share capital of $510,355.

The price per share of $2.80 is based on a 409a valuation report prepared by a third-party appraisal, subsequently completed on May 14, 2025.

**Shares for convertible note payable** 

---

| | | |
|:---|:---|:---|
|  | **Number of<br> shares** | **Share Capital** |
| **Common stock issued for convertible notes payable** | **133441** | $**122331** |

---

On January 17, 2025, the holder of its Convertible Debenture converted an aggregate principal amount of $100,000 and accrued interest of $22,331 into 133,441 shares of common stock at a price equal to $0.91674 per share.

**Shares for financing expense**

---

| | | |
|:---|:---|:---|
|  | **Number of<br> shares** | **Share Capital** |
| **Common stock issued for financing expense** | **18082** | $**50630** |

---

On June 25, 2025, the Company issued 18,082 shares of common stock to settle outstanding financing expense.

**Issued warrants**

---

| | | | |
|:---|:---|:---|:---|
|  | **Number of warrants** | **Weighted-Average Exercise Price per Share** | **Weighted-Average Remaining Life** |
| **Outstanding at December 31, 2024** |  |  |  |
| Granted | 75000 | 8.5 | 4.68 |
| Canceled or expired |  |  |  |
| **Outstanding at June 30, 2025** | **75000** | $**8.5** | **4.68 years** |
| **Exercisable at June 30, 2025** | 75000 | $8.5 | 4.68 years |
| **Intrinsic value at June 30, 2025** |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- |  |

---

On March 10, 2025, the Company issued a lender a total of 37,500 warrants at an exercise price of $8.50 per share. The warrants carry a term of 5 years, exercisable in whole or in part at any time or times during the exercise period – on or after the initial date of issuance and on or before the termination date. The options were valued at $23,138 using a Black-Scholes pricing model.

On June 1, 2025, the Company issued a lender a total of 37,500 warrants at an exercise price of $8.50 per share. The warrants carry a term of 5 years, exercisable in whole or in part at any time or times during the exercise period – on or after the initial date of issuance and on or before the termination date. The options were valued at $22,125 using a Black-Scholes pricing model.

During the six months ended June 30, 2025, the Company recorded $45,263 in expenses associated with the vesting of these stock warrants.

**23.** **SEGMENT REPORTING** 

The Company has two operating segments:

1) Kirkman, which sells a range of nutraceuticals, supplements and related products;

2) HT Naturals, which sells a range of hemp-based consumer products.

The Company has a corporate function, which is not an operating segment, and includes expenses related to corporate management and administration, including legal, audit, accounting, tax, SEC reporting, and investor/public relations, among other corporate expenses.

The Company follows ASC 280, Segment Reporting, as amended by ASU 2023-07, which requires entities to report financial and descriptive information about their reportable operating segments. ASC 280-10-50-1 states that an operating segment is a component of a public entity that:

● Engages in business activities from which it may earn revenues and incur expenses;

● Has operating results that are regularly reviewed by the Chief Operating Decision Maker (CODM), who is the Company's Chief Executive Officer, to make decisions about resource allocation and performance assessment; and

● Has discrete financial information available.

Under ASC 280-10-50-5, a public entity is required to report separately only those operating segments that meet certain quantitative thresholds. However, as specified in ASC 280-10-50-11, if a company's business activities are managed as a single operating segment and reviewed on a basis, the company may report as a single segment. The Company has determined that it operates as one reportable segment, as its CODM reviews the business as a whole rather than by distinct business components.

Management has evaluated the Hemp and Supplements operating segments under the qualitative aggregation criteria in ASC 280-10-50-11 and determined that:

● The segments have similar economic characteristics,

● They are similar in the nature of products and services, production processes, type of customers, distribution methods, and regulatory environment.

Accordingly, in accordance with ASC 280-10-50-11, the Hemp segment will be aggregated with the Supplements segment into a single reportable segment.

Furthermore, based on the quantitative thresholds in ASC 280-10-50-12 and management's assessment, only the Kirkman operating segment meets the criteria to be classified as a reportable segment. HT Naturals represents approximately 3% of consolidated revenue and does not meet any of the other quantitative thresholds for disclosure as a separate reportable segment.

Therefore, the Company has two operating segments that were aggregated to one reporting segment because the HT Natural segment is considered immaterial.

**Measure of Segment Profit or Loss**

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended<br> June 30,** | **For the Six Months Ended<br> June 30,** |
|  | **2025** | **2024** |
| **Revenue, net of returns** | $3422789 | $3490446 |
| **Costs and expenses:** |  |  |
| **Cost of goods sold** | 1587928 | 1636792 |
| **Sales & marketing** | 343669 | 298217 |
| **General and administrative expenses** | 1678728 | 1430011 |
| **Operating income / (loss)** | **(187536)** | **125426** |
| **Interest expense** | (166106) | (119914) |
| **Interest income** | 804 | 963 |
| **Net income / (loss) for the periods** | $**(352838)** | $**6475** |

---

**Significant Segment Expenses**

The Company considers the following significant expenses in evaluating its performance:

● General & Administrative: including personnel costs, professional fees, and other overhead expenses.

● Sales & Marketing: includes personnel costs and other sales-related expenses.

● Cost of Goods Sold: represents labor costs, material costs and manufacturing overhead costs associated with the production of materials transferred to the customer from the Company's facility.

Since the Company has only one reportable segment, no additional segment disclosures are required beyond entity-wide disclosures presented below.

**Entity-Wide Disclosures**

*Geographic Revenue Information*

For the six months ended June 30, 2025, and 2024, 92% of the Company's net sales were generated in North America.

*Concentration*

For the six months ended June 30, 2025, sales from two customers represented 31% and 24% for a total of 55% of sales totaling $1,870,264. For the six months ended June 30, 2024, sales from two customers represented 30% and 27% for a total of 57% of sales totaling $1,981,105.

As of June 30, 2025, accounts receivable balance from one customer represented 78% of total accounts receivable totaling $286,948. As of December 31, 2024, accounts receivable balance from one customer represented 70% of total accounts receivable, totaling $211,756.

**24.** **REVENUES, NET** 

This table shows revenue by product type:

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** |
| Nutraceutical (supplements) | $3323156 | $3429920 |
| Hemp derived products | 99633 | 60526 |
|  | $**3422789** | $**3490446** |

---

**25.** **CONCENTRATION** 

For the six-month period ended June 30, 2025, sales from two customers represented 31% and 24% for a total of 55% of sales totaling $1,870,264. For the six-month period ended June 30, 2024, sales from two customers represented 30% and 27% for a total of 57% of sales totaling $1,981,105.

As of June 30, 2025, accounts receivable balance from one customer represented 78% of total accounts receivable totaling $286,948. As of December 31, 2024, accounts receivable balance from one customer represented 70% of total accounts receivable, totaling $211,756.

**26.** **COMMITMENTS AND CONTINGENCIES** 

The Company has an exclusive license agreement with the Trailer Park Boys Incorporated (TPB) to market & sell hemp derived products. This license came into effect on July 21, 2021, and will expire on December 31, 2025. Under the license agreement and subsequent amendments, the Company will pay Trailer Park Boys an amount equal to $725,000 and 14,440 shares of common stock of the Company.

As of June 30, 2025, the Company owed $150,000 payable as follows:

---

| | |
|:---|:---|
| **Date** | **Amount** |
| &nbsp;&nbsp;&nbsp;July 1, 2025 | $75000 |
| &nbsp;&nbsp;&nbsp;October 1, 2025 | 75000 |
| **Total** | $**150000** |

---

The royalty rates under this agreement are between 15% - 30% of the net sales of the company derived from sales related to the license. During the six months ended June 30, 2025, the Company made payments in the amount of $50,000, with total life-to-date payments amounting to $575,000. The license agreement may be terminated with reasonable cause upon six months written notice or for certain triggering events without recourse or an opportunity to cure.

**27.** **LEGAL PROCEEDINGS** 

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. On May 25, 2021, True Health Medical Center, S.C. ("True Health") amended an existing complaint against Kirkman Group, Inc. ("Kirkman"), James Hall and David Humphries to assert claims against HTO Nevada, Inc. and HTO Holdings, Inc. (collectively, HTO Nevada, Inc. and HTO Holdings, Inc. are referred to as the "HTO Parties"). Kirkman is the seller of certain assets to the HTO Parties and is a separate legal entity. Affiliates of the HTO Parties were first named in the lawsuit on September 23, 2020. The case is pending in the Circuit Court for the Eighteenth Judicial Circuit, DuPage County, Illinois. Kirkman had terminated a royalty agreement prior to selling its assets to the HTO Parties but the royalty agreement has a provision that allows True Health to continue to receive royalties after the termination of the agreement. True Health claims that Kirkman underpaid the royalties due to True Health prior to the sale of assets to the HTO Parties. There is no dispute that Kirkman stopped paying royalties to True Health around the time it terminated the agreement and that the HTO Parties have never paid royalties to True Health. True Health contends that as the purchaser of certain Kirkman assets, the HTO Parties should be bound by the terms of the royalty agreement. There is no certain amount at this time in connection with the alleged in the damages claim against the HTO Parties. It is not possible to predict the outcome of this proceeding at this time. To date, the parties have engaged in some discovery including a limited number of depositions. True Health has filed a motion for summary judgment that addresses its claims against Kirkman but does not address any claim against the HTO Parties. The briefing is not yet complete on the summary judgment motion and a ruling is likely more than 60 days away. Regardless of how the court rules on summary judgment, there will be remaining claims in the case, and it is likely that additional discovery will be conducted. No trial date has been scheduled at this time. The parties have largely completed both fact and expert discovery. Kirkman Group has recently filed a motion for leave to amend its counterclaims against True Health. None of these proposed counterclaims are alleged against HTO Nevada. However, if the Court permits the amended counterclaims to be filed, it is possible that additional discovery will be needed on the amended counterclaims. It is also likely that True Health will move to dismiss some or all the amended counterclaims. Either additional discovery or motion practice would typically mean that the prospective trial date will not occur until a later date than would have been the case absent these additional steps in the litigation. As of today, the court has not set a trial date.

**28.** **SUBSEQUENT EVENTS** 

The Company follows the guidance in FASB ASC Topic 855, Subsequent Events ("ASC 855"), which provides guidance to establish general standards of accounting for and disclosures of events that occur after the balance sheet date but before the consolidated financial statements are issued or are available to be issued. ASC 855 sets forth the following:

&nbsp;&nbsp;&nbsp;&nbsp;(i) The period
 after the balance sheet date during which management of a reporting entity evaluates events
 or transactions that may occur for potential recognition or disclosure in the consolidated
 financial statements

&nbsp;&nbsp;&nbsp;&nbsp;(ii) The circumstances
 under which an entity should recognize events or transactions occurring after the balance
 sheet date in its consolidated financial statements, and

&nbsp;&nbsp;&nbsp;&nbsp;(iii) The disclosures
 that an entity should make about events or transactions that occurred after the balance sheet
 date. Accordingly, the Company did not have any subsequent events that require disclosure
 other than the following.

**Payable for acquisition** 

On July 9, 2025, the Company signed amendment to the Forbearance Agreement in respect of the principal owed in the amount of $2,227,366, extending the due date to August 30, 2025.

**Preferred stock** 

On July 18, 2025, the Company authorized 12,000 Series A Preferred stock and 10,000 Series B Preferred stock, at a par value of $0.00001 per share.

**FUNCTIONAL BRANDS INC. (formerly HT Naturals Inc.)** 

**TABLE OF CONTENTS** 

---

| | |
|:---|:---|
| [**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID NO. 5854)**](#d_001) | F-33 |
| [**CONSOLIDATED BALANCE SHEET<u>S</u>**](#d_002) | F-34 |
| [**CONSOLIDATED STATEMENTS OF OPERATIONS**](#d_003) | F-35 |
| [**CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY**](#d_004) | F-36 |
| [**CONSOLIDATED STATEMENTS OF CASH FLOWS**](#d_005) | F-37 |
| [**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**](#d_006) | F-38 - F-67 |

---

**FUNCTIONAL BRANDS INC. (formerly HT Naturals Inc.)** 

**INDEPENDENT AUDITORS' REPORT**

![](fin_001.jpg)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and<br> Stockholders of Functional Brands, Inc. (formerly HT Naturals Inc.)

**Opinion on the Consolidated Financial Statements**

We have audited the accompanying consolidated balance sheets of Functional Brands, Inc.(formerly HT Naturals Inc.) (the "Company") as of December 31, 2024 and 2023, and the related consolidated statements of operations, stockholders' equity, and cash flows for the years ended December 31, 2024 and 2023, 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, 2024, and the results of its operations and its cash flows for each of the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

**Going Concern**

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has incurred net losses and has an accumulated deficit. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

**Basis for Opinion**

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's 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. 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.

![](fin_002.jpg)

We have served as the Company's auditor since 2024.

Diamond Bar, CA

March 27, 2025 except for Notes 4 and 24, as to which the date is August 12, 2025

**FUNCTIONAL BRANDS INC. (formerly HT Naturals Inc.)** 

**CONSOLIDATED BALANCE SHEETS**

***(In U.S. Dollars, except share data or otherwise noted)***

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024** | **December 31,<br> 2023** |
| **Assets** | | |
| ***Current*** | | |
| &nbsp;&nbsp;&nbsp;Cash | $211642 | $374435 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 303471 | 170938 |
| &nbsp;&nbsp;&nbsp;Inventories, net | 1709458 | 1694020 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 45112 | 72441 |
| &nbsp;&nbsp;&nbsp;Deferred offering costs | 588641 | 231910 |
| ***Total current assets*** | **2858324** | **2543744** |
| ***Noncurrent*** |  |  |
| &nbsp;&nbsp;&nbsp;Property and equipment, net | 49564 | 96054 |
| &nbsp;&nbsp;&nbsp;Right-of-use assets, net | 2000092 | 2307027 |
| &nbsp;&nbsp;&nbsp;Intangible assets, net | 1443541 | 1489671 |
| &nbsp;&nbsp;&nbsp;Goodwill | 818139 | 818139 |
| ***Total non-current assets*** | **4311336** | **4710891** |
| **Total assets** | $**7169660** | $**7254635** |
| **Liabilities** |  |  |
| ***Current*** |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable & accrued liabilities | $1956165 | $1630399 |
| &nbsp;&nbsp;&nbsp;Line of credit | 32235 | 68315 |
| &nbsp;&nbsp;&nbsp;Government loans, current | 3436 | 3280 |
| &nbsp;&nbsp;&nbsp;Lease liabilities, current | 291213 | 261015 |
| &nbsp;&nbsp;&nbsp;Other current liabilities | 35332 | 40825 |
| &nbsp;&nbsp;&nbsp;Payable for acquisition, current | 2342366 |  |
| &nbsp;&nbsp;&nbsp;Loan payable (related parties) | 370703 | 247634 |
| &nbsp;&nbsp;&nbsp;Loan payable | 171500 | - |
| ***Total current liabilities*** | **5202950** | **2251468** |
| ***Noncurrent*** |  |  |
| &nbsp;&nbsp;&nbsp;Lease liabilities, net of current | 1844819 | 2136032 |
| &nbsp;&nbsp;&nbsp;Payable for acquisition, non-current |  | 2597368 |
| &nbsp;&nbsp;&nbsp;Government loans, net of current | 140468 | 143888 |
| &nbsp;&nbsp;&nbsp;Convertible debenture | 100000 | 100000 |
| ***Total non-current liabilities*** | **2085287** | **4977288** |
| **Total liabilities** | $**7288237** | $**7228756** |
| **Shareholders' equity / (deficit)** |  |  |
| &nbsp;&nbsp;&nbsp;*Common stock, par value $0.00001, authorized 220,000,000 shares; 6,694,880and 6,694,493shares issued and outstanding at December 31, 2024 and December 31, 2023, respectively* | 67 | 67 |
| &nbsp;&nbsp;&nbsp;*1,000,000 shares of blank check preferred $0.001 par value 0 shares issued and outstanding at December 31, 2024 and December 31, 2023, respectively* |  |  |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 7542286 | 7127386 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (7660930) | (7101574) |
| **Total Stockholders' Equity / (Deficit)** | **(118577)** | **25879** |
| **Total liabilities and shareholders' equity / (deficit)** | $**7169660** | $**7254635** |

---

The accompanying notes are an integral part of these consolidated financial statements.

**FUNCTIONAL BRANDS INC. (formerly HT Naturals Inc.)** 

**CONSOLIDATED STATEMENTS OF OPERATIONS**

***(In U.S. Dollars, except share data or otherwise noted)***

 ****

---

| | | |
|:---|:---|:---|
|  | **For the Year Ended<br> December 31,** | **For the Year Ended<br> December 31,** |
|  | **2024** | **2023** |
| **Revenue, net of returns** | 6566455 | 6820499 |
| **Costs and expenses:** |  |  |
| **Cost of goods sold** | 2959609 | 3641648 |
| **Sales & marketing** | 576315 | 588772 |
| **General and administrative expenses** | 3259623 | 3672582 |
| **Operating loss** | **(229092)** | **(1082503)** |
| **Other income / (expenses)** |  |  |
| **Interest expense** | (331836) | (158591) |
| **Interest income** | 1572 | - |
| **Net loss for the year** | $**(559356)** | $**(1241094)** |
| **Net loss per share of common stock attributable to common stockholders** |  |  |
| **Basic and diluted** | $(0.08) | $(0.19) |
| **Weighted average shares used in computing net loss per share of common stock** |  |  |
| **Basic** | **6694493** | **6689547** |
| **Diluted** | **6694493** | **6691217** |

---

The accompanying notes are an integral part of these consolidated financial statements.

**FUNCTIONAL BRANDS INC. (formerly HT Naturals Inc.)** 

**CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY / (DEFICIT)**

***(In U.S. Dollars, except share data or otherwise noted)***

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **No. of<br> Shares** | **Common<br> Stock** | **Preferred<br> Stock** | **APIC** | **Accumulated<br> Deficit** | **Total<br> Shareholders'<br> Equity / (Deficit)** |
| **December 31, 2022 (Restated)** | **6678415** | **67** |  | **4601340** | **(5860480)** | **(1259073)** |
| **Stock-based compensation** | 102 |  |  | 762825 |  | 762825 |
| **Shares issued as part of Reg CF campaign, net of refunds** | 354 |  |  | 9076 |  | 9076 |
| **Shares issued as part of Reg D** | 15622 |  |  | 106000 |  | 106000 |
| **Forgiveness of balances due to/from related parties** |  |  |  | 1648145 |  | 1648145 |
| **Net loss for the year ended December 31, 2023** | - | - |  | - | (1241094) | (1241094) |
| **December 31, 2023** | **6694493** | **67** |  | **7127386** | **(7101574)** | **25879** |
| **Stock-based compensation** |  |  |  | 414900 |  | 414900 |
| **Odd-lot rounding** | 387 |  |  |  |  |  |
| **Net loss for the year ended December 31, 2024** | - | - |  | - | (559356) | (559356) |
| **December 31, 2024** | **6694880** | **67** |  | $**7542286** | $**(7660930)** | $**(118577)** |

---

The accompanying notes are an integral part of these consolidated financial statements.

**FUNCTIONAL BRANDS INC. (formerly HT Naturals Inc.)** 

**CONSOLIDATED STATEMENTS OF CASH FLOW** 

***(In U.S. Dollars, except share data or otherwise noted)***

---

| | | |
|:---|:---|:---|
|  | **For The Year Ended<br> December 31, <br> 2024** | **For The Year Ended<br> December 31, <br> 2023** |
| **Cash flows from operating activities:** | | |
| &nbsp;&nbsp;&nbsp;Net loss | $(559356) | $(1241094) |
| &nbsp;&nbsp;&nbsp;Reconcile net loss to cash provided by operating activities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Allowance for doubtful accounts receivable | (32491) | 36287 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Allowance for inventory obsolescence | (14206) | 79033 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation of property & equipment | 48371 | 105175 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of right-of-use assets | 306935 | 283197 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | 414900 | 762825 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of intangible assets | 46130 | 46130 |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (100042) | 31702 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | (1231) | 346180 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 27329 | 74495 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable & Accrued liabilities | 132160 | 337976 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current liabilities | (5494) | (101519) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lease liabilities | (261015) | (196470) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to/from related parties | - | (315748) |
| &nbsp;&nbsp;&nbsp;**Net cash provided by operating activities** | **1990** | **248169** |
| **Cash flows from investing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases of property and equipment | (1881) | (3500) |
| &nbsp;&nbsp;&nbsp;**Net cash used in investing activities** | **(1881)** | **(3500)** |
| **Cash flows from financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment for deferred offering costs | (163125) | (211660) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from long-term debt | 301500 | 247634 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments for payable for acquisition | (255002) | (257632) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share issuance for cash from Reg CF |  | 9076 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share issuance for cash from Reg D |  | 106000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from debt facilities | 180662 | 400000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equipment loan repayment |  | (4125) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term debt repayment | (6931) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Line of credit repayment | (216742) | (359522) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Government debt repayment | (3264) | (2832) |
| &nbsp;&nbsp;&nbsp;**Net cash used in financing activities** | **(162902)** | **(73061)** |
| &nbsp;&nbsp;&nbsp;Net increase (decrease) in cash | (162793) | 171608 |
| &nbsp;&nbsp;&nbsp;Cash beginning of year | 374435 | 202827 |
| &nbsp;&nbsp;&nbsp;**Cash, end of year** | **211642** | **374435** |
| **Supplemental disclosures of cash flow information** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for interest | 224428 | 158591 |
| **Non-cash investing and financing activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Right-of-use and lease liability upon lease commencement | - | 2500613 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Forgiveness of balances due to/from related parties | - | 1648145 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred offering costs | 193606 | - |

---

The accompanying notes are an integral part of these consolidated financial statements.

**FUNCTIONAL BRANDS INC. (formerly HT Naturals Inc.)** 

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**1.** **ORGANIZATION AND NATURE OF OPERATIONS** 

Functional Brands Inc. (formerly HT Naturals Inc. - the "Company") was organized under the General Corporation Law in the State of Delaware on November 19, 2020. The Company's principal business is in the production, marketing, sales, and distribution of smokable hemp related products in certain states within the United States of America that permit such sales.

On March 22, 2023, the Company changed its name from HT Naturals Inc. to Functional Brands Inc. to better reflect its corporate identity.

As of December 31, 2024, and 2023, the Consolidated Financial Statements consist of the Company and its wholly owned subsidiary HTO Nevada Inc. (d/b/a Kirkman), which is a nutraceutical manufacturer and distributor based in the Pacific Northwest. All intercompany transactions and balances have been eliminated in consolidation.

On January 22, 2025, the Company effected a reverse stock split in its authorized common stock on a basis of 1-for-18.338622. The authorized capital stock of the Company remained the same at 220,000,000 shares of common stock. All references to share and per share amounts in the consolidated financial statements and accompanying notes thereto have been retroactively restated to reflect the reverse stock split. In addition, the Company authorized 1,000,000 shares of blank check preferred $0.001 par value.

**2.** **GOING CONCERN** 

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The Company had a net loss of $559,356 for the year ended December 31, 2024, and net loss in the amount of $1,241,094 for the year ended December 31, 2023. As of December 31, 2024, the Company has a shareholders' deficit and accumulated deficit of $118,577 and $7,660,930, respectively. These conditions raise substantial doubt about the Company's ability to continue as a going concern.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. The Company is significantly dependent upon its ability and attempt to secure additional equity and/or debt financing. There are no assurances that the Company will be successful in obtaining additional capital.

The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence. These financial statements do not include any adjustments that might arise from this uncertainty.

**3.** **BASIS OF PRESENTATION** 

**Basis of preparation and principles of consolidation** 

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 consolidated financial statements comprise the financial statements of the Company and only subsidiary, HTO Nevada Inc. Subsidiary consists of entity over which the Company is exposed to, or has rights to, variable returns as well as the ability to affect these returns through the power to direct the relevant activities of the entity. To the extent that subsidiaries provide services that relate to the Company's activities, they are fully consolidated from the date control is transferred and are deconsolidated from the date control ceases. All intercompany balances and transactions have been eliminated.

The financial statements of the subsidiary are prepared for the same reporting period as the parent company, using consistent accounting policies.

*Functional Brands Inc. (formerly HT Naturals Inc.)*

Functional Brands Inc. (formerly HT Naturals Inc.) is the parent company.

*HTO Nevada Inc. dba Kirkman*

 

The principal subsidiary is HTO Nevada Inc. dba Kirkman which is solely owned by the Company.

As part of the restructuring efforts, ownership of HTO Nevada Inc. dba Kirkman was transferred from HTO Holdings Inc. to Functional Brands Inc. (formerly HT Naturals Inc.) on May 19, 2023, in exchange 4,362,378 common shares of the Company. This was retroactively recorded in 2019 as the acquisition was completed on July 3, 2019, with entities under common control.

**4.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** 

The significant accounting policies used in the preparation of these consolidated financial statements are described below.

**Cash** 

Cash consists of cash in readily available checking accounts and deposits in transit. As of December 31, 2024, and 2023, cash balances were deposited at a major financial institution. Cash balances are subject to minimal credit risk as the balances are with high credit quality financial institutions.

**Trade and other receivables**

Accounts receivables are stated at the amount the Company expects to collect from outstanding balances and do not bear interest. The Company provides for probable uncollectible amounts through an allowance for doubtful accounts, if an allowance is deemed necessary. The allowance for doubtful accounts is the Company's best estimate of the amount of probable credit losses in the Company's existing accounts receivable; however, changes in circumstances relating to accounts receivable may result in a requirement for additional allowances in the future. On a periodic basis, management evaluates its accounts receivable and determines the requirement for an allowance for doubtful accounts based on its assessment of the current and collectible status of individual accounts with past due balances over 90 days. Account balances are charged against the allowance after all collection efforts have been exhausted and the potential for recovery is considered remote. The allowance for doubtful accounts amounted to $3,796 and $36,287, for the years ended December 31, 2024, and 2023, respectively.

**Inventories** 

Inventory consists of raw materials, work in process and finished goods. Inventory is measured at the lower of cost or net realizable value. Inventory costs include direct labor and certain overhead expenses such as in-bound shipping and handling costs incurred to bring the inventory to its present location and conditions. Cost is determined by using the weighted average method. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. If the Company determines that the estimated net realizable value of its inventory is less than the carrying value of such inventory, it records a charge to impairment expenses.

**Property and equipment**

Property and equipment are stated at cost. Depreciation of property and equipment is recorded using the straight-line method over the assets' estimated useful lives. Computer equipment and capitalized software are depreciated over two to five years and furniture, and fixtures are depreciated over five years. Amortization of fixed assets under capital leases is included in depreciation expense.

The categories of capital assets are amortized on a straight-line basis as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Machinery
 & equipment 7 years, straight-line

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Furniture
 & fixtures 7 years, straight-line

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Computer
 equipment 5 years, straight-line

The Company allocates the amount initially recognized in respect of a capital asset to its significant parts and amortizes separately each such part. Residual values, methods of amortization and useful lives of the capital assets are reviewed annually and adjusted if appropriate.

Gains and losses on disposals of capital assets are determined by comparing the proceeds with the carrying amount of the capital asset and is included in the consolidated statement of operations and comprehensive loss.

The assets' residual values, useful lives and methods of depreciation are reviewed at each fiscal year-end and adjusted prospectively if appropriate. An item of equipment is retired upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising on sale or retirement of the asset (calculated as the difference between the net disposal proceeds and the carrying value of the asset) is included in the consolidated statement of operations in the year the asset is retired. Such assets are tested annually for impairment, or more frequently, if events or changes in circumstances indicate that they might be impaired.

**Intangible Assets**

Intangible assets are recorded at cost less accumulated amortization and impairment losses, if any. Intangible assets acquired in a business combination are measured at fair value at the acquisition date. Amortization is provided on a straight-line basis over their estimated useful lives, which do not exceed the contractual period, if any. Intangible assets that have indefinite useful lives are not subject to amortization and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. The estimated useful lives, residual values, and amortization methods are reviewed at each year end, and any changes in estimates are accounted for prospectively.

The categories of the intangible assets are amortized on a straight-line basis as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Customer
 relationships 10 years

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● cGMP
 certification Indefinite life

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Goodwill
 (including Assembled Workforce) Indefinite life

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Kirkman
 brand Indefinite life

Expenditures in the research phase and post-development maintenance costs are expensed as incurred.

**Goodwill**

Goodwill arises from business combinations and is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any non-controlling interests in the acquire, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill acquired in a business combination is not amortized but tested for impairment at least annually or more frequently if events and circumstances exist that indicate that a goodwill impairment test should be performed.

Goodwill is tested for impairment at the reporting unit level. A reporting unit is an operating segment or one level below an operating segment (referred to as a component). We allocate goodwill to reporting units based on the reporting unit expected to benefit from the business combination. Assets and liabilities are assigned to each reporting units if they are employed by a reporting unit and are considered in the determination of the reporting unit fair value. We have one reporting unit with goodwill, which is the Kirkman business.

The Company's indefinite-lived intangible assets is tested for impairment at the consolidated level. In evaluating the recoverability of the Kirkman Brand name and CGMP License, we compare the fair value of the asset to its carrying amount to determine potential impairment. The Company's estimate of the fair value of the Kirkman Brand name is derived using the income approach, specifically the relief-from-royalty method and the fair value of the CGMP License is derived using the income approach.

The fair value determination of the reporting units and the indefinite-lived intangible asset is judgmental in nature and requires the use of significant estimates and assumptions that are sensitive to changes. Assumptions include estimation of the royalty rate, estimation of future revenue and projected margins, which are dependent on internal cash flow forecasts, estimation of the terminal growth rates and capital spending, and determination of discount rates. As a result, there can be no assurance that the estimates and assumptions made for purposes of the quantitative goodwill and indefinite-lived intangible impairment tests will prove to be an accurate prediction of future results. Examples of events or circumstances that could reasonably be expected to negatively affect the underlying key assumptions and ultimately impact the estimated fair value of the reporting units may include such items as: (i) volatility in the equity and debt markets or other macroeconomic factors, (ii) an increase in the weighted-average cost of capital due to further increases in interest rates, (iii) decrease in future cash flows due to lower than expected sales, or (iv) fluctuations in foreign currency exchange rates that may negatively impact the Company's reported results of operations. Accordingly, if the current cash flow assumptions are not realized, we experience further increases in costs of capital, it is possible that an additional impairment charge may be recorded in the future, which could be material. The Company did not record an impairment loss during the years ended December 31, 2024, and December 31, 2023.

**Right-of-use Assets and Lease Liabilities** 

The Company recognizes right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated amortization and impairment losses, and adjusted for any re-measurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Unless the Company is reasonably certain to obtain ownership of the leased asset at the end of the lease term, right-of-use assets are amortized on a straight-line basis over the shorter of its estimated useful life and the lease term.

At the commencement date of the lease, the Company recognizes lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees, if applicable. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating a lease, if the lease term reflects the Company exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognized as occupancy expense in the period on which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is re-measured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset.

**Leases as lessee**

The Company determines if an arrangement is a lease at inception of an arrangement. Operating and finance lease assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. Lease assets represent the Company's right to use an underlying asset for the lease term, while lease liabilities represent the Company's obligation to make lease payments arising from the lease. The Company uses the internal incremental borrowing rate based on the information available at the lease commencement date, in determining the present value of lease payments. The length of a lease term includes options to extend or terminate the lease when it is reasonably certain the Company will exercise those options. The Company made an accounting policy election to not recognize lease assets or liabilities for leases with a term of 12 months or less. Additionally, when accounting for leases, the Company combines payments for leased assets, related services and other components of a lease. The Company applies a portfolio approach to determine the discount rate for leases with similar characteristics.

For leases classified as operating, the ROU asset is subsequently measured throughout the lease term at the carrying amount of the lease liability, plus unamortized initial direct costs, plus/(minus) any unamortized prepaid/(accrued) lease payments, less the unamortized balance of lease incentives received. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

For leases classified as finance leases, the ROU asset is subsequently amortized using the straight-line method from the lease commencement date to the earlier of the end of its useful life or the end of the lease term unless the lease transfers ownership of the underlying asset to the Company, or the Company is reasonably certain to exercise an option to purchase the underlying asset. In those cases, the ROU asset is amortized over the useful life of the underlying asset. The Company expects to exercise the options to purchase the assets which are leased under finance leases. Accordingly, these assets are included in property and equipment, and depreciation thereon is recognized as depreciation expense. When the Company makes contractually required payments under finance leases, a portion is allocated to reduce the finance lease obligation, and a portion is recognized as interest expense.

**Stock-based compensation plans**

The Company has a stock-based compensation plan that is used to compensate the Board, officers, employees and consultants for services rendered.

The restricted share units ("RSU's) are measured by reference to the fair value of the Company's Common Share at the date on which they are granted. In situations where equity instruments are issued to non-employees and the fair value of goods or services received by the entity as consideration cannot be estimated reliably, they are measured at fair value of the equity instruments granted.

The costs of equity settled transactions are recognized as expenses, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant party becomes fully entitled to the award.

No expense is recognized for performance-based awards that do not vest. Expense for service-based award is recognized upon vesting. Where the terms of an equity settled award are modified, the minimum expense recognized is the expense as if the terms had not been modified. An additional expense is recognized for any modification which increases the total fair value of the share-based payment arrangement or is otherwise beneficial to the employee as measured at the date of modification.

Compensation expense is recognized for all share-based payments to employees and non-employees, including restricted stock units, in the statements of operation based on the fair value of the awards that are granted. As necessary, the Company's stock price at the date of grant was estimated using an acceptable valuation technique such as a recent round of fundraising or the probability-weighted expected return model. The fair value of RSUs is determined at the date of grant using the price per share offered at the most recent round of fundraising, the Reg CF campaign.

Compensation expense for restricted stock awards with performance-based vesting conditions is calculated based on the number of awards that are expected to vest during the performance period if it is probable that the performance metrics will be achieved. Generally, measured compensation cost, net of actual forfeitures, is recognized on a straight-line basis over the vesting period of the related share-based compensation award. The Company accounts for forfeitures of stock-based awards as they occur.

**Revenue recognition**

We account for revenue in accordance with the Financial Accounting Standards Board ("FASB") Accounting Standard Codification Topic 606, "Revenue from Contracts with Customers". Revenue is measured based on the amount of consideration that we expect to receive, reduced by discounts and estimates for credits and returns (calculated based upon previous experience and management's evaluation). Outbound shipping charged to customers is recognized at the time the related merchandise revenues are recognized and are included in net revenues.

Per Company policy, any product that doesn't meet the customer's expectations can be returned within the first 30 days of delivery in exchange for another product or for a full refund. Any product sold through a distributor or retailer must be returned to the original purchase location for any return or exchange. For the years ended December 31, 2024, and 2023, the Company has not recorded any reserves on revenue.

**Loss per Share**

Basic net loss per common share is calculated by dividing the net loss distributed to the common class, by the weighted-average number of common shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares and potentially dilutive securities outstanding for the period.

For purposes of the diluted net loss per share calculation, restricted stock units (RSUs) are considered to be potentially dilutive securities. As of December 31, 2024, and 2023, there were 82,986 and 76,194 RSUs, respectively, of potential common stock equivalents excluded from the diluted loss per share calculations as their effect is anti-dilutive. Because the Company has reported a net loss for the years ended December 31, 2024, and 2023, diluted net loss per common share is the same as basic net loss per common share for such years.

**Business Combinations**

Business combinations are accounted for using the acquisition method. The fair value of total purchase consideration is allocated to the fair values of identifiable tangible and intangible assets acquired and liabilities assumed, with the remaining amount being classified as goodwill. All assets, liabilities and contingent liabilities acquired or assumed in a business combination are recorded at their fair values at the date of acquisition. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates, and selection of comparable companies. Estimates of fair value are based on assumptions believed to be reasonable, but are inherently uncertain and unpredictable and, as a result, actual results may differ from those estimates. During the measurement period, not to exceed one year from the date of acquisition, the Company may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill. At the conclusion of the measurement period, any subsequent adjustments are reflected in the statements of operations. Transaction costs associated with business combinations are expensed as incurred and are included in general and administrative expenses in the Company's statements of operations.

**Significant accounting estimates and judgments**

The most significant judgements made in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements include:

● Obsolescence of inventories

● Recoverability of the carrying value of long-lived assets including property & equipment and intangible assets

● Recoverability of carrying value of goodwill

● Discount rate used to calculate present value of future minimum lease payments for right-of-use asset and liabilities

● Recognition and measurement of provisions and contingencies

● Valuation of deferred income tax assets

*Inventories, net*

The Company periodically reviews the value of items in inventory and provides write-downs or write-offs of inventory based on its assessment of market conditions, including forecasted demand compared to quantities on hand, as well as other factors such as potential excess or aged inventories based on product shelf life, and other factors that affect inventory obsolescence. The allowance for inventory obsolescence amounted to $64,827 and $79,033, for the years ended December 31, 2024 and 2023, respectively.

 ****

*Long-Lived Assets*

Long-lived assets consist primarily of property and equipment. Long-lived assets are tested for impairment when events and circumstances indicate the assets might be impaired by first comparing the estimated future undiscounted cash flows of the asset or asset group to the carrying value. If the carrying value exceeds the estimated future undiscounted cash flows, an impairment loss is recognized based on the amount that the carrying value exceeds the fair value of the asset or asset group. The Company did not recognize impairment losses during the years ended December 31, 2024, and 2023.

*Fair value of financial instruments*

The individual fair values attributed to the different components of a financing transaction, notably investment in equity securities, derivative financial instruments, convertible debt and loans, are determined using valuation techniques. The Company uses judgment to select the methods used to make certain assumptions and in performing the fair value calculations in order to determine (a) the values attributed to each component of a transaction at the time of their issuance; (b) the fair value measurements for certain instruments that require subsequent measurement at fair value on a recurring basis; and (c) for disclosing the fair value of financial instruments subsequently carried at amortized cost. These valuation estimates could be significantly different because of the use of judgment and the inherent uncertainty in estimating the fair value of these instruments that are not quoted in an active market.

As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

*Segment Reporting*

 

In November 2023, the FASB issued ASU 2023-07, *Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,* which requires entities to report incremental information about significant segment expenses included in a segment's profit or loss measure as well as the title and position of the chief operating decision maker ("CODM"). The new standard also requires interim disclosures related to reportable segment profit or loss and assets that had previously only been disclosed annually. The Company adopted ASU 2023-07 effective December 31, 2024 on a retrospective basis.

*Income taxes*

The Company must exercise judgment in determining the provision for income taxes. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Company recognizes liabilities and contingencies for expected tax audit issues based on the Company's current understanding of the tax law. For matters where it is probable that an adjustment will be made, the Company records its best estimate of the tax liability including the related interest and penalties in the current tax provision.

In addition, the Company recognizes deferred tax assets relating to tax losses carried forward to the extent there are sufficient taxable temporary differences (deferred tax liabilities) relating to the same taxation authority and the same taxable entity against which the unused tax losses can be utilized. However, utilization of the tax losses also depends on the ability of the taxable entity to satisfy certain tests at the time the losses are recouped.

**Risks and uncertainties**

The Company's business and operations are sensitive to general business and economic conditions in the U.S. and worldwide along with local, state, and federal governmental policy decisions. A host of factors beyond the Company's control could cause fluctuations in these conditions. Adverse conditions may include but are not limited to changes in US laws surrounding the sale of smokable CBG/CBD products, consumer demand, and COVID-19 issues more fully described below. These adverse conditions could affect the Company's consolidated financial condition and the results of its operations.

**5.** **CASH** 

Cash consists of liquid funds and deposits in transit.

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024** | **December 31,<br> 2023** |
| **Cash** | $206890 | $364350 |
| **Deposits in transit** | 4752 | 10085 |
| **Total Cash** | $**211642** | $**374435** |

---

**6.** **ACCOUNTS RECEIVABLE, NET** 

Accounts receivable consist of trade receivables, net of allowance.

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024** | **December 31,<br> 2023** |
| **Trade receivables** | $307267 | $207225 |
| **Allowance for doubtful accounts** | (3796) | (36287) |
| **Accounts receivable, net** | $**303471** | $**170938** |

---

During the year ended December 31, 2024, the Company adjusted the allowance for doubtful accounts in the amount of $32,491 bringing the balance to $3,796, down from $36,287 for the year ended December 31, 2023. This allowance is continually re-evaluated and adjusted as necessary.

**7.** **INVENTORIES, NET** 

Inventories consisted of raw materials (minerals – magnesium, Calcium, vitamins, botanical extracts, hemp, trim and flower – CBG and CBD), finished goods (capsules, tablets, powders, creams, cigs, gummies, tinctures, pre-rolls, and vapes) and packaging & supplies (bottles, labels, covers, filters, tipping paper and packaging materials).

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024** | **December 31,<br> 2023** |
| **Raw materials** | $472296 | $651513 |
| **Packaging, supplies & other** | 231912 | 240756 |
| **Finished goods** | 1070077 | 880784 |
| **Allowance for inventory obsolescence** | (64827) | (79033) |
| **Total Inventories, net** | $**1709458** | $**1694020** |

---

During the year ended December 31, 2024, the Company adjusted the allowance for obsolete raw materials and expired finished goods in the amount of $14,206 bringing the balance to $64,827, down from $79,033 for the year ended December 31, 2023. This obsolescence allowance is continually re-evaluated and adjusted as necessary.

**8.** **PREPAIDS & OTHER CURRENT ASSETS** 

Balance consists of prepayments made to vendors and legal retainers.

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024** | **December 31,<br> 2023** |
| **Prepaids & deposits** | $45005 | $45538 |
| **Other current assets** | 107 | 26903 |
| **Total prepaids and other current assets** | $**45112** | $**72441** |

---

**9.** **DEFERRED OFFERING COSTS** 

Schedule below represent capitalization of deferred cost incurred for the preparation of Initial Public Offering ("IPO"):

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024** | **December 31,<br> 2023** |
| **Legal services** | 364669 | 171063 |
| **Professional services** | 223972 | 60847 |
| **Total IPO Cost** | $**588641** | $**231910** |

---

**10.** **PROPERTY & EQUIPMENT** 

Property and equipment consist of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024** | **December 31,<br> 2023** |
| **Furniture & Fixtures** | 3302 | 3302 |
| **Computer Equipment** | 30988 | 30988 |
| **Machinery & Equipment** | 730508 | 728627 |
| **Total property and equipment, gross** | **764798** | **762917** |
| **Less: Accumulated depreciation** | (715234) | (666863) |
| **Property and equipment, net** | $**49564** | $**96054** |

---

Depreciation expenses totaled $48,371 and $105,175 for the years ended December 31, 2024, and 2023, respectively.

**11.** **RIGHT-OF-USE ASSETS & LEASE LIABILITY** 

Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The following are the expected lease payments as of December 31, 2024. The lease is considered an "operating lease" and consequently lease payments are calculated on a straight-line basis, including the total amount of interest related.

Lease expense, on the straight-line basis was $510,521 and $528,871 during the years ended December 31, 2024, and 2023.

The movement in the right-of-use assets is as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024** | **December 31,<br> 2023** |
| **Right of use assets:** | | |
| **Right of use assets recognized as of January 1<sup>st</sup>** | $2307027 | $89612 |
| **Additions** |  | 2500612 |
| **Amortization Expense** | (306935) | (283197) |
| **Right of use assets, net** | $**2000092** | $**2307027** |

---

The movement in lease liability is as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024** | **December 31,<br> 2023** |
| **Lease liabilities recognized as of January 1<sup>st</sup>** | $2397047 | $92904 |
| **Additions** |  | 2500612 |
| **Lease payments** | (261015) | (196469) |
| **Lease liabilities at December 31** | **2136032** | **2397047** |
| **Less: current portion** | **(291213)** | **(261015)** |
| **Long-term portion** | $**1844819** | $**2136032** |

---

The following table presents information about the future maturity of the lease liabilities under the Company's operating and financing leases as of Dec 31, 2024.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Maturity of Lease Liabilities** | **1. Operating Facility** | **2. Office Equipment** | **3. Office Equipment** | **Total<br> Amount** |
| **2025** | $474729 | $28567 | $1068 | $504364 |
| **2026** | 488887 | 24985 | 890 | 514762 |
| **2027** | 503349 |  |  | 503349 |
| **2028 and beyond** | 1142784 | - | - | 1142784 |
| **Total future minimum lease payments** | **2609749** | **53552** | **1958** | **2665259** |
| **Less: Imputed interest** | (525037) | (4044) | (146) | (529227) |
| **Present value of lease liabilities** | $**2084712** | $**49508** | $**1812** | $**2136032** |
| **Remaining lease term (in years)** | 5.09 | 1.75 | 1.75 |  |

---

Right-of-use assets and lease liabilities comprise three leases.

LEASE 1 – OPERATING FACILITY

On January 1, 2023, the Company entered a 7-year and 2-month lease to lease approximately 24,400 square feet industrial building containing 9,095 square feet of office space and 9,663 square feet of production area. At inception of the lease, the Company recorded a right of use asset and liability. The Company used an effective borrowing rate of 9.0% within the calculation.

The base monthly rent is $26,500 per month, with subsequent annual increases of 3%. Operating expense came to $10,774 per month for 2023 incurred by the lessee.

LEASES 2 & 3 – OFFICE EQUIPMENT

The Company entered into a 5-year lease to lease office equipment that consists of four copiers for daily office use commencing on September 30, 2021. At inception of the lease, the Company recorded a right of use asset and liability. The Company used an effective borrowing rate of 9.0% within the calculation.

The base monthly payment amount is $1,979 per month, with subsequent annual increases of 6%. Operating expense came to $2,119 per month for 2023 borne by the lessee.

In addition, The Company also entered into a 4-year and 7-month lease agreement to lease a Paper Source Accessory for daily office use commencing on March 14, 2022, to complement the previous office equipment discussed. At inception of the lease, the Company recorded a right of use asset and liability. The Company used an effective borrowing rate of 9.0% within the calculation. The base monthly payment amount is $89 per month, with no subsequent annual increases.

**12.** **BUSINESS COMBINATION** 

On July 3, 2019, the Company entered into an asset purchase agreement (the "APA") with the Kirkman Group Inc. ("Kirkman") to acquire certain tangible and intangible assets for a purchase price of $5,000,000. The present value of the acquisition fair value of the deferred cash payment transferred for Kirkman was $4,329,317, which consisted of the following:

**Kirkman Group Inc.**

---

| | |
|:---|:---|
| **Purchase consideration** | **Fair Value** |
| Cash | $1250000 |
| Deferred cash payment - $750,000 raise or 1st anniversary of closing | 722388 |
| Deferred cash payment - $1,500,000 on 1st anniversary of closing | 1270649 |
| Deferred cash payment - $1,500,000 on 2nd anniversary of closing | 1086280 |
| Total consideration - $5,000,000 | $**4329317** |

---

 

 

The following table summarizes the finalized fair value of assets acquired, and liabilities assumed as of the date of the acquisition in 2019:

**Kirkman Group Inc.**

---

| | |
|:---|:---|
| **Purchase consideration** | **Fair Value** |
| Net assets | $1513878 |
| Kirkman brand | 1226000 |
| cGMP certification | 310000 |
| Customer relationships | 461300 |
| Net assets acquired | 3511178 |
| Goodwill | 818139 |
| Total Consideration | $**4329317** |

---

The excess of purchase consideration over the fair value of net assets acquired was recorded as goodwill which is not deductible for tax purposes.

*Payable for acquisition*

As of December 31, 2024, and 2023, the Company owed $2,342,366 and $2,597,368, respectively, in connection with the aforementioned APA, which is due in its entirety on January 1, 2025, subject to the Forbearance Agreement and Confession of Judgement.

On September 24, 2024, the Company executed a Forbearance Agreement which allows the seller to postpone the payment of principal balance without pursuing rights under the APA.

On September 24, 2024, the Company executed a Confession of Judgement in respect of the principal owed in the amount of $2,417,366 which allowed the seller to enter a judgement against the Company in The Circuit Court of The State of Oregon for the County of Clackamas.

The execution of these documents will impact the Company if it fails to settle the balance owed by the due date, January 1, 2025. As a result, the seller has the right to foreclose on the business.

On March 5, 2025, the Company signed amendment to the Forbearance Agreement in respect of the principal owed in the amount of $2,297,366 which allowed the seller to enter a judgement against the Company in The Circuit Court of The State of Oregon for the County of Clackamas.

The execution of these documents will impact the Company if it fails to settle the balance owed by the due date, May 31, 2025. As a result, the seller has the right to foreclose on the business.

**13.** **INTANGIBLE ASSETS & GOODWILL** 

Balance consists of intangible assets acquired from acquisition of Kirkman in July 2019. The Kirkman brand and the c-GMP certification were assigned an indefinite useful life, whereas the customer relationships were assigned a life span of 10 years.

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024** | **December 31,<br> 2023** |
| Kirkman brand, net | $925700 | $925700 |
| cGMP certification | 310000 | 310000 |
| Customer relationships | 461300 | 461300 |
| **Total intangible assets, gross** | **1697000** | **1697000** |
| Less: Accumulated amortization: Customer relationships | (253459) | (207329) |
| **Intangible assets, net** | $**1443541** | $**1489671** |

---

There were no impairments to the intangible assets during the years ended December 31, 2024, and 2023.

Balance consists of goodwill (including assembled workforce) acquired from acquisition of Kirkman in July 2019 which was assigned an indefinite useful life.

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024** | **December 31,<br> 2023** |
| Goodwill | $**818139** | $**818139** |

---

There were no impairments to goodwill during the years ended December 31, 2024, and 2023.

**14.** **ACCOUNTS PAYABLE & ACCRUED LIABILITIES** 

Balance consists of trade payables and accruals.

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024** | **December 31, <br> 2023** |
| **Trade payables** | $1103359 | $562519 |
| **Accrued liabilities** | 741106 | 796180 |
| **Accrued compensation - shares earned but not issued** | 111700 | 271700 |
|  | $**1956165** | $**1630399** |

---

Accrued liabilities are comprised of accruals consulting, advisory and audit services and accrued interest from convertible note and loan payable.

**15.** **LINES OF CREDIT** 

During the year ended December 31, 2024 the Company entered into multiple agreements with a third party to finance invoices to satisfy multiple vendors of which the following agreements are to be repaid during the year ended December 31, 2025.

On January 20, 2023, the Company entered a line of credit agreement with a third-party whereby the Company received $300,000. The terms of the loan were for one year, with a 27% contract interest rate. On January 22, 2024, the loan was settled in full, at which point the security interest was released by the lender.

On July 14, 2023, the Company entered into an additional line of credit agreement with a third-party whereby the Company received $100,000. The terms of the loan were for 42 weeks, with a 5% contract interest rate. On July 7, 2024, the loan was settled in full, at which point the security interest was released by the lender.

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024** | **December 31,<br> 2023** |
| **Line of credit recognized as of January 1** | $68315 | $27837 |
| **Proceeds from debt facilities** | 180662 | 400000 |
| **Payments on debt facilities** | (216742) | (359522) |
| **Line of credit at December 31** | **32235** | **68315** |
| **Less: current portion** | **(32235)** | **(68315)** |
| **Long-term portion** | $**-** | $**-** |

---

The Company has the following line of credit commitments as of December 31, 2024.

---

| | | | |
|:---|:---|:---|:---|
| **Agreement Date** | **Principal Amount** | **Finance Charge** | **End Date** |
| **July 18, 2024** | $25000 | $2750 | **January 14, 2025** |
| **July 18, 2024** | $11804 | $1298 | **January 16, 2025** |
| **October 3, 2024** | $7870 | $433 | **January 30, 2025** |
| **October 3, 2024** | $3199 | $176 | **February 9, 2025** |
| **October 17, 2024** | $46127 | $4151 | **April 17, 2025** |

---

Subsequent to year end line of credit commitments were paid off on schedule.

**16.** **GOVERNMENT LOANS PAYABLE** 

On July 7, 2020, Kirkman applied and was a granted thirty (30) year loan from the U.S. Small Business Administration for $150,000 with an interest of 3.75% per annum accrued daily, to alleviate financial burden caused due to COVID-19.

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024** | **December 31,<br> 2023** |
| **Government loans recognized as of January 1** | $147168 | $150000 |
| **Proceeds from debt facilities** |  |  |
| **Payments on debt facilities** | (3264) | (2832) |
| **Government loans at December 31** | **143904** | **147168** |
| **Less: current portion** | **(3436)** | **(3280)** |
| **Long-term portion** | $**140468** | $**143888** |

---

The Company has the following government loan commitments as of December 31, 2024.

---

| | |
|:---|:---|
|  | **Amount** |
| 2025 | $3436 |
| 2026 | 3595 |
| 2027 | 3702 |
| 2028 and beyond | 133171 |
| **Total** | $**143904** |

---

**17.** **OTHER CURRENT LIABILITIES** 

Balance consists of credit cards, employee benefits and sales tax payable.

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024** | **December 31,<br> 2023** |
| **Credit cards** | $30786 | $25787 |
| **Sales tax** | 1422 | 1242 |
| **Other** | 3124 | 13796 |
| **Total other current liabilities** | $**35332** | $**40825** |

---

**18.** **LOAN PAYABLE (RELATED PARTY)** 

In December 2023, the Company entered into a short-term debt facility with a related party, an officer and director of the parent company – Hemptown Organics Corp., whereby the Company received $247,634. The loan is non-interest-bearing and remains outstanding as at December 31, 2024.

On March 11, 2024, the Company executed a loan agreement with a related party in the amount of $130,000, with an annual interest rate of 20% to be paid off in 7 years.

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024** | **December 31,<br> 2023** |
| **Related parties loan as of January 1** | 247634 |  |
| **Proceeds from related parties** | 130000 | 247634 |
| **Payments to related parties** | (6931) | - |
| **Related parties at December 31** | **370703** | **247634** |

---

**19.** **LOAN PAYABLE** 

On June 18, 2024, the Company executed a loan agreement with a lender in the amount of $150,000. The payment terms are 12.5% OID, initial principal amount consisting of a $150,000 loan plus $21,500 OID totaling $171,500. In addition, the loan required the Company to issue 37,500 warrants with anti-dilution protection as well as an equity interest in the amount of 2,045 shares of the Company's stock with reverse split protection through the Senior Exchange Listing

Loan is to mature the earlier of six months from execution, completion of a senior exchange listing of the Company or as mutually agreed, with an interest rate of the higher of 12% or WSJ Prime plus 4% guaranteed.

On December 11, 2024, the Company signed an amendment with the lender to extend the maturity date to February 28, 2025. In consideration for the extension of the maturity date, the Company agreed that the loan shall be paid in cash in full and shall not be converted into stock. In addition, the Company shall deliver 1,091 shares of the Company's common stock and a cash fee of $10,000.

On March 10, 2025, the Company signed an extension with a lender to extend the maturity date to May 15, 2025. In consideration for the extension of the maturity date, the Company agreed that the loan shall be paid in cash in full and shall not be converted into stock. In addition, the Company shall deliver a cash fee of $10,000.

In addition, on March 10, 2025, the Company issued 37,500 Series C Common Stock Purchase Warrants.

**20.** **CONVERTIBLE DEBENTURE** 

On October 7, 2022, the Company entered into Convertible Debenture Purchase Agreements pursuant to which the Company issued unsecured convertible promissory note ("Convertible Debenture"). The Company issued Convertible Debenture in the aggregate principal amount of $100,000 that was used to pay the expenses of the organization and reorganization and for other general corporate purposes. Interest accrued on the principal balance of the Convertible Debenture at 10.0% per annum totaled $2,338. The Convertible Debenture ranks on a parity with the Company's other existing debt and matured on December 31, 2022. The Convertible Debenture was to convert the outstanding principal and accrued interest into shares of the Company's common stock on maturity date at a price per share equal to $0.92 per share, however the maturity was delayed at the request of the debenture holder. As of December 31, 2024, the holder had still not converted the debenture.

On January 17, 2025, the holder of its Convertible Debenture converted an aggregate principal amount of $100,000 and accrued interest of $22,356.16 into 133,441 shares of common stock at a price equal to $0.91693 per share.

**21.** **RELATED PARTY TRANSACTIONS** 

**Executive contracts** 

We have entered into contractual agreements with our CEO and CFO.

*Employment Agreement – CEO* 

Effective as of April 1, 2023, the employment agreement has an original term of 12 months subject to automatic renewal unless terminated for cause. The CEO will be issued 54,300 company restricted stock units with an exercise price and vesting period to be determined after the initial public offering. The CEO is also entitled to a performance-based bonus payout.

The bonus is based upon a combination of achieving the consolidated revenue targets as set forth in the chart below, after giving effect to the Reverse Stock Split:

---

| | |
|:---|:---|
| **Consolidated Revenue Target (USD)** | **Functional Brands Inc. Stock Payout (common shares)** |
| Below $10,000,000 | 54300 |
| $10000000 | 109059 |
| $15000000 | 163589 |
| $20000000 | 218119 |
| $25000000 | 272649 |
| $30000000 | 327178 |
| $35000000 | 381708 |
| $40000000 | 436238 |

---

*Employment Agreement – CFO*

Effective as of April 1, 2023, the employment agreement has an original term of 12 months subject to automatic renewal unless terminated for cause. The CFO will be issued 27,265 company restricted stock units with an exercise price and vesting period to be determined after the initial public offering and 190,854 stock options with an exercise price and date of issuance to be determined by the Company's board of directors, with an expiration term of three years after termination of the employment agreement unless terminated for cause. The CFO is also entitled to a performance-based bonus payout as set forth in the chart below, after giving effect to the Reverse Stock Split:

---

| | |
|:---|:---|
| **Consolidated Revenue Target (USD)** | **Functional Brands Inc. Stock Payout (common shares)** |
| Below $10,000,000 | 27265 |
| $10000000 | 54530 |
| $15000000 | 81795 |
| $20000000 | 109059 |
| $25000000 | 136324 |
| $30000000 | 163589 |
| $35000000 | 190854 |
| $40000000 | 218119 |

---

**22.** **DEFERRED TAXES** 

The provision for income taxes for the years ended December 31, 2024, and 2023 consists of the following:

---

| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
| **Current:** |  |  |
| **Federal** | $(117465) | $(259139) |
| **State** | (28340) | (64341) |
| **Permanent differences** | 6382 |  |
| **Temporary differences** | 219504 |  |
| **Change in Valuation Allowance** | (80081) | 323480 |
| **Income Tax Expense** | $- | $- |

---

The Company has the following net deferred tax asset (liability):

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31,<br> 2024** | **As of<br> December 31,<br> 2023** |
| **Net Operating Losses** | $1276931 | $1204862 |
| **Inventory Reserve** | 24442 | 20718 |
| **Accounts Receivable Provision for uncollectable** | 8517 | 9512 |
| **ROU Assets** | 35635 | 23598 |
| **Accrued Liabilities** | 159141 | 188330 |
| **Stock Compensation** | 363745 | 254983 |
| **Capitalized costs** | 26214 |  |
| **Book to Tax Depreciation – Property, Plant & Equipment** | (12747) | (25033) |
| **Book to tax amortization – Intangible Assets** | (160274) | (120646) |
| **Valuation Allowance** | (1721604) | (1556324) |
| **Net Deferred Tax Assets (liabilities)** | $- | $- |

---

In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. We consider the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. The Company has net loss carry forwards of approximately $5,813,862 available to offset future taxable income. Tax returns for the years 2019 through 2024 remain open to review by both Federal and State Tax Authorities.

**23.** **SHARE CAPITAL** 

**Authorized share capital**

*Common Shares*

Upon incorporation, the Company authorized 54,530 common shares with a par value of $0.001 per share were initially authorized for issuance. The Initial Share of the Company was allotted and issued to a former director of the Company as fully paid on November 19, 2020, the date of the organization. The issuance of the Initial Share was recorded in the central securities register of the Company and represents the only share initially issued. The Company purchased the Initial Share from a former director for the price of $0.01 and the Initial Shared formed part of the authorized but unissued share capital of the Company. The repurchase of the Incorporator's Share was recorded in the central securities register of the Company and the director confirms that no share certificate was issued or shall be issued in respect of the Initial Share.

On December 10, 2020, the Company altered its authorized share capital to 100,000,000 common shares with a par value of $0.00001 per share to be issued from its treasury.

On August 31, 2023, this was changed to 220,000,000 common shares with a par value of $0.00001 per share to be issued from its treasury.

On January 21, 2025, the Company effected a reverse stock split in its authorized common stock on a basis of 1-for-18.338622. The authorized capital stock of the Company remained the same at 220,000,000 shares of common stock. All references to share and per share amounts in the consolidated financial statements and accompanying notes thereto have been retroactively restated to reflect the reverse stock split. In addition, the Company authorized 1,000,000 shares of blank check preferred $0.001 par value.

All Common Shares are entitled to one vote in respect to each Common Share held at all meetings of shareholders of the Company.

**Issued share capital**

*Common share issuances*

On December 10, 2020, the Company entered into a licensing agreement with Hemptown Organics Corp. (the "licensor") to use the Hemptown Naturals brand (the "asset") on a non-exclusive, non-transferable basis for a period of 4 years. In return, 2,181,189 common shares were issued to the licensor at $0.018339 per share with deemed proceeds of $40,000 as consideration.

On May 19, 2023, the Company entered into a Share Exchange Agreement (SEA) to acquire HTO Nevada Inc. dba Kirkman from a related party, Hemptown Organics Corp. and its wholly owned subsidiary, HTO Holdings Inc. As part this SEA, HTO Holdings Inc. exchanged 1,000 restricted shares of common stock, par value $0.0001 per share of HTO Nevada Inc. dba Kirkman, being all of the issued and outstanding capital stock of HTO Nevada Inc. dba Kirkman, for issuance of 4,362,378 restricted shares of common stock of Functional Brands Inc., $0.018339 par value per share to Hemptown Organics Crop., with deemed proceeds of $80,000 as consideration, such that, HTO Nevada Inc. dba Kirkman shall be wholly-owned subsidiary of Functional Brands Inc. This was retroactively recorded in 2019 as the acquisition was completed on July 3, 2019.

This SEA was in respect of the asset purchase agreement (the "APA") the Company entered into on July 3, 2019, with the Kirkman Group ("Kirkman") to acquire certain tangible and intangible assets.

*Regulation Crowdfunding (Reg CF) Campaign*

 

Under the Securities act of 1933, the offer and sale of securities must be registered unless an exemption from registration is available. Title III of the Jumpstart Our Business Startups (JOBS) Act of 2012 added Securities Act Section 4(a)(6) that provides and exemption from registration for certain crowdfunding transactions. The Company is currently completing a Regulation Crowdfunding offering ("Offering") subject to the above regulations and had filed its Offering statement on Form C through the EDGAR system and with the Title3Funds.com as intermediary.

The Offering is for up to a maximum of $5,000,000 at a price of $25.67 per share with an offering deadline of December 31, 2022, which was extended to May 31, 2023. The securities purchased in this Offering will be subject to a number of restrictions including restrictions on resale for a period of one year. The use of the proceeds will be towards the fees associated with this Offering, further development of the Company's business – sales & marketing, and for general working capital purposes.

During the year ended December 31, 2024, the Company did not issue any common shares stemming from the Reg CF campaign.

---

| | | | |
|:---|:---|:---|:---|
|  | **Number of<br> shares issued** | **Price per<br> Share** | **Amount** |
| May 2023 | 354 | $25.67 | $9087 |
| **Total issuance for the year** | **354** |  | $**9087** |

---

During the year ended December 31, 2023, the Company issued 354 common shares with net proceeds of $9,087 as part of Reg CF campaign in pre-IPO funding at a price of $25.67 per share.

*Regulation D (Reg D) Campaign*

During the year ended December 31, 2024, the Company did not issue any common shares stemming from the Reg CF campaign.

---

| | | | |
|:---|:---|:---|:---|
|  | **Number of<br> shares issued** | **Price per<br> share** | **Amount** |
| April 2023 | 14728 | $6.79 | $100000 |
| May 2023 | 884 | 6.79 | 6000 |
| **Total issuance for the year** | **15612** |  | $**106000** |

---

During the year ended December 31, 2023, the Company issued 15,612 shares with net proceeds of $106,000 as part of Reg D campaign in pre-IPO funding at a price of $6.79 per share.

**Stock based compensation**

---

| | | |
|:---|:---|:---|
|  | **Number of<br> shares RSUs** | **Net Amount** |
| **RSUs issued for services rendered in prior years** | 10583 | 271700 |
| **RSUs issued for services rendered during the year** | 5578 | 143200 |
| **Total issuance for the year** | **16161** | $**414900** |

---

 

For the year ended December 31, 2024, the change in additional paid-in capital was $414,900 stemming from RSUs for services incurred during the year as well as issuance of RSUs outstanding from prior years.

For the year ended December 31, 2023, the change in additional paid-in capital was $762,825 resulting for shares and RSUs for services incurred for the year.

 

*Restricted stock units (RSUs) for services* 

---

| | | |
|:---|:---|:---|
|  | **Number of<br> shares RSUs** | **Net Amount** |
| **January 2024** | 1294 | 33200 |
| **February 2024** | 1294 | 33200 |
| **March 2024** | 1294 | 33200 |
| **April 2024** | 1294 | 33200 |
| **May 2024** | 203 | 5200 |
| **Jun 2024** | 203 | 5200 |
| **July 2024** | 203 | 5200 |
| **August 2024** | 203 | 5200 |
| **September 2024** | 203 | 5200 |
| **October 2024** | 203 | 5200 |
| **November 2024** | 203 | 5200 |
| **December 2024** | 203 | 5200 |
| **Total issuance for the year** | **6800** | $**174400** |

---

 

 

During the year ended December 31, 2024, the Company incurred $174,400 in contracting services resulting from 6,800 of restricted stock units for consultants providing sales & marketing services at fair value of $25.67 per share.

---

| | | |
|:---|:---|:---|
|  | **Number of<br> shares RSUs** | **Amount** |
| January 2023 | 1800 | 46200 |
| February 2023 | 1800 | 46200 |
| March 2023 | 1800 | 46200 |
| April 2023 | 1800 | 46200 |
| May 2023 | 2345 | 60200 |
| Jun 2023 | 2345 | 60200 |
| July 2023 | 2384 | 61200 |
| August 2023 | 2384 | 61200 |
| September 2023 | 1294 | 33200 |
| October 2023 | 1294 | 33200 |
| November 2023 | 1294 | 33200 |
| December 2023 | 1294 | 33200 |
| **Total issuance for the year** | **21834** | $**560400** |

---

During the year ended December 31, 2023, the Company incurred $560,400 in contracting services resulting from 21,834 of restricted stock units for consultants providing sales & marketing services at fair value of $25.67 per share.

**24.** **SEGMENT REPORTING** 

The Company has two operating segments:

1) Kirkman: sells a range of nutraceuticals, supplements and related products;

2) HT Naturals: sells a range of hemp-based consumer products.

The Company has a corporate function, which is not an operating segment, and includes expenses related to corporate management and administration, including legal, audit, accounting, tax, SEC reporting, and investor/public relations, among other corporate expenses.

The Company follows ASC 280, Segment Reporting, as amended by ASU 2023-07, which requires entities to report financial and descriptive information about their reportable operating segments. ASC 280-10-50-1 states that an operating segment is a component of an entity that:

● Engages in business activities from which it may earn revenues and incur expenses;

● Has operating results that are regularly reviewed by the Chief Operating Decision Maker (CODM), who is the Company's Chief Executive Officer, to make decisions about resource allocation and performance assessment; and

● Has discrete financial information available.

Under ASC 280-10-50-5, entities are required to report separately only those operating segments that meet certain quantitative thresholds. However, as specified in ASC 280-10-50-11, if a company's business activities are managed as a single operating segment and reviewed on a basis, the company may report as a single segment. The Company has determined that it operates as one reportable segment, as its CODM reviews the business as a whole rather than by distinct business components.

Management has evaluated the Hemp and Supplements operating segments under the qualitative aggregation criteria in ASC 280-10-50-11 and determined that:

● The segments have similar economic characteristics,

● They are similar in the nature of products and services, production processes, type of customers, distribution methods, and regulatory environment.

Accordingly, in accordance with ASC 280-10-50-11, the Hemp segment will be aggregated with the Supplements segment into a single reportable segment.

Furthermore, based on the quantitative thresholds in ASC 280-10-50-12 and management's assessment, only the Kirkman operating segment meets the criteria to be classified as a reportable segment. HT Naturals represents approximately 2% of consolidated revenue and does not meet any of the other quantitative thresholds for disclosure as a separate reportable segment.

Therefore, the Company has two operating segments that were aggregated to one reporting segment because the HT Natural segment is considered immaterial.

**Measure of Segment Profit or Loss**

---

| | | |
|:---|:---|:---|
|  | **For the Year Ended<br> December 31,** | **For the Year Ended<br> December 31,** |
|  | **2024** | **2023** |
| **Revenue, net of returns** | 6566455 | 6820499 |
| **Costs and expenses:** |  |  |
| **Cost of goods sold** | 2959609 | 3641648 |
| **Sales & marketing** | 576315 | 588772 |
| **General and administrative expenses** | 3259623 | 3672582 |
| **Operating loss** | **(229092)** | **(1082503)** |
| **Other income / (expenses)** |  |  |
| **Interest expense** | (331836) | (158591) |
| **Interest income** | 1572 | - |
| **Net loss for the year** | $**(559356)** | $**(1241094)** |

---

**Significant Segment Expenses**

The Company considers the following significant expenses in evaluating its performance:

● General & Administrative: including personnel costs, professional fees, and other overhead expenses.

● Sales & Marketing: includes personnel costs and other sales-related expenses.

● Cost of Goods Sold: represents labor costs, material costs and manufacturing overhead costs associated with the production of materials transferred to the customer from the Company's facility.

Since the Company has only one reportable segment, no additional segment disclosures are required beyond entity-wide disclosures presented below.

**Entity-Wide Disclosures**

*Geographic Revenue Information*

For the years ended December 31, 2024 and 2023, approximately 92% of the Company's net sales were generated in North America.

*Concentration*

During the year ended December 31, 2024, sales from two customers represented 27% and 26% for a total of 54% of sales totaling $3,475,395. During the year ended December 31, 2023, sales from two customers represented 22% and 19% for a total of 41% of sales totaling $2,918,058.

As of December 31, 2024, accounts receivable balance from one customer represented 70% of total accounts receivable, totaling $211,756. As at December 31, 2023, accounts receivable balance from three customers represented 17%, 13%, and 11% for a total of 41% of accounts receivable totaling $68,928.

**25.** **REVENUES, NET** 

This table shows revenue by product type – Functional Brands (formerly HT Naturals) reflects hemp derived products whereas Kirkman reflects nutraceutical products.

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024** | **December 31,<br> 2023** |
| **Kirkman** | $6437990 | $6435735 |
| **Functional Brands (formerly HT Naturals)** | 128465 | 384764 |
|  | $**6566455** | $**6820499** |

---

**26.** **CONCENTRATION** 

During the year ended December 31, 2024, sales from two customers represented 27%and 26% for a total of 54% of sales totaling $3,475,395. During the year ended December 31, 2023, sales from two customers represented 22% and 19% for a total of 41% of sales totaling $2,918,058.

As at December 31, 2024, accounts receivable balance from one customer represented 70% of total accounts receivable, totaling $211,756. As at December 31, 2023, accounts receivable balance from three customers represented 17%, 13%, and 11% for a total of 41% of accounts receivable totaling $68,928.

**27.** **COMMITMENTS AND CONTINGENCIES** 

The Company has an exclusive license agreement with the Trailer Park Boys Incorporated (TPB) to market & sell hemp derived products. This license came into effect on July 21, 2021, and will expire on December 31, 2025. Under the license agreement, the Company will pay Trailer Park Boys an amount equal to $700,000 with $50,000 advance against royalties payable upon execution of the agreement and $150,000 to be paid during the second year of the agreement. Additionally, the Trailer Park Boys are entitled to 1,000,000 shares of common stock of the Company.

The Company executed an amendment on September 25, 2024, to settle the balance owing by October 2025 as per the following schedule.

---

| | |
|:---|:---|
| **Date** | **Amount** |
| November 1, 2024 | $25000 |
| January 1, 2025 | 50000 |
| April 1, 2025 | 50000 |
| July 1, 2025 | 75000 |
| October 1, 2025 | 75000 |
| **Total** | **275000** |

---

In addition, the Company paid $25,000 upon execution of this amendment.

The royalty rates under this agreement are between 15% - 30% of the net sales of the company derived from sales related to the license. During the years ended December 31, 2024, and 2023, the Company made payments in the amount of $100,000 and $200,000, respectively, with total life-to-date payments amounting to $525,000. The license agreement may be terminated with reasonable cause upon six months' written notice or for certain triggering events without recourse or an opportunity to cure.

**28.** **LEGAL PROCEEDINGS** 

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. On May 25, 2021, True Health Medical Center, S.C. ("True Health") amended an existing complaint against Kirkman Group, Inc. ("Kirkman"), James Hall and David Humphries to assert claims against HTO Nevada, Inc. and HTO Holdings, Inc. (collectively, HTO Nevada, Inc. and HTO Holdings, Inc. are referred to as the "HTO Parties"). Kirkman is the seller of certain assets to the HTO Parties and is a separate legal entity. Affiliates of the HTO Parties were first named in the lawsuit on September 23, 2020. The case is pending in the Circuit Court for the Eighteenth Judicial Circuit, DuPage County, Illinois. Kirkman had terminated a royalty agreement prior to selling its assets to the HTO Parties but the royalty agreement has a provision that allows True Health to continue to receive royalties after the termination of the agreement. True Health claims that Kirkman underpaid the royalties due to True Health prior to the sale of assets to the HTO Parties. There is no dispute that Kirkman stopped paying royalties to True Health around the time it terminated the agreement and that the HTO Parties have never paid royalties to True Health. True Health contends that as the purchaser of certain Kirkman assets, the HTO Parties should be bound by the terms of the royalty agreement. There is no certain amount at this time in connection with the alleged in the damages claim against the HTO Parties. It is not possible to predict the outcome of this proceeding at this time. To date, the parties have engaged in some discovery including a limited number of depositions. True Health has filed a motion for summary judgment that addresses its claims against Kirkman but does not address any claim against the HTO Parties. The briefing is not yet complete on the summary judgment motion and a ruling is likely more than 60 days away. Regardless of how the court rules on summary judgment, there will be remaining claims in the case, and it is likely that additional discovery will be conducted. No trial date has been scheduled at this time. The parties have largely completed both fact and expert discovery. Kirkman Group has recently filed a motion for leave to amend its counterclaims against True Health. None of these proposed counterclaims are alleged against HTO Nevada. However, if the Court permits the amended counterclaims to be filed, it is possible that additional discovery will be needed on the amended counterclaims. It is also likely that True Health will move to dismiss some or all the amended counterclaims. Either additional discovery or motion practice would typically mean that the prospective trial date will not occur until a later date than would have been the case absent these additional steps in the litigation. As of today, the court has not set a trial date.

**29.** **SUBSEQUENT EVENTS** 

The Company follows the guidance in FASB ASC Topic 855, Subsequent Events ("ASC 855"), which provides guidance to establish general standards of accounting for and disclosures of events that occur after the balance sheet date but before the consolidated financial statements are issued or are available to be issued. ASC 855 sets forth the following:

&nbsp;&nbsp;&nbsp;&nbsp;(iv) The
 period after the balance sheet date during which management of a reporting entity evaluates
 events or transactions that may occur for potential recognition or disclosure in the consolidated
 financial statements

&nbsp;&nbsp;&nbsp;&nbsp;(v) The
 circumstances under which an entity should recognize events or transactions occurring after
 the balance sheet date in its consolidated financial statements, and

&nbsp;&nbsp;&nbsp;&nbsp;(vi) The
 disclosures that an entity should make about events or transactions that occurred after the
 balance sheet date. Accordingly, the Company did not have any subsequent events that require
 disclosure other than the following.

**Equity issuance**

*Share issuance*

On January 15, 2025, the Company issued shares pursuant to an Advisory Agreement with a consultant provider to support the IPO process. The scope of work includes strategic review, consulting services, IPO readiness & execution as well as capital market advisory. Pursuant to the Advisory Agreement, the Company sold 86,420 shares of common stock for $100 to the consultant.

On January 17, 2025, the Company issued 2,485 shares of common stock for services.

On January 17, 2025, the holder of its Convertible Debenture converted an aggregate principal amount of $100,000 and accrued interest of $22,356.16 into 133,441 shares of common stock at a price equal to $0.91693 per share.

*RSU issuance*

Subsequent to December 31, 2024, the Company issued a total of 1,419 RSUs and incurred an additional 281 RSUs which vest upon the completion of the Company's initial public offering.

**Short-term debt**

*Invoice Financing*

 

Subsequent to December 31, 2024, the Company executed a lending agreement to satisfy vendor debt, with the following terms.

---

| | | | |
|:---|:---|:---|:---|
| **Date** | **Amount<br> Financed** | **Finance<br> Charges** | **Repayment<br> Terms** |
| January 2, 2025 | $15945 | $1116 | 17 weeks |
| February 11, 2025 | $33002 | $2310 | 21 weeks |

---

**Related party transactions** 

On March 10, 2025, the Company executed a loan agreement with a related party in the amount of $225,000, with an annual interest rate of 18% to be paid off in 4 years.

**Loan payable**

On March 10, 2025, the Company signed an extension with a lender to extend the maturity date to May 15, 2025. In consideration for the extension of the maturity date, the Company agreed that the loan shall be paid in cash in full and shall not be converted into stock. In addition, the Company shall deliver a cash fee of $10,000.

In addition, on March 10, 2025, the Company issued 37,500 Series C Common Stock Purchase Warrants.

**Payable for acquisition**

On March 5, 2025, the Company signed amendment to the Forbearance Agreement in respect of the principal owed in the amount of $2,297,366, extending the due date to May 31, 2025.

**Functional Brands Inc.**

**PRELIMINARY PROSPECTUS**

, 2025

Until , 2025, 25 days after the date of this prospectus, all dealers that buy, sell or trade our securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as Underwriter and with respect to their unsold allotments or subscriptions.

**PART II**

**INFORMATION NOT REQUIRED IN THE PROSPECTUS**

**Item 13. Other Expenses of Issuance and Distribution**

The following table sets forth the costs and expenses, other than underwriting discounts and commissions, payable by us in connection with the sale of common stock being registered. All amounts, other than the SEC registration fee and NASDAQ listing fee, are estimates. We will pay all these expenses.

---

| | |
|:---|:---|
|  | **Amount** |
| SEC registration fee | $21903.95 |
| NASDAQ listing fee | 50000 |
| Accounting fees and expenses | 175000 |
| Legal fees and expenses | 505000 |
| Transfer agent fees and expenses | 20000 |
| Printing and related fees | 25000 |
| Miscellaneous | 10000 |
| **Total** | $806903.95 |

---

**Item 14. Indemnification of Directors and Officers**

Section 102 of the General Corporation Law of the State of Delaware (the "DGCL") permits a corporation to eliminate the personal liability of directors of a corporation to the corporation or its shareholders for monetary damages for a breach of fiduciary duty as a director, except where the director breached his duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of Delaware corporate law or obtained an improper personal benefit. Our certificate of incorporation provides that none of our directors shall be personally liable to us or our shareholders for monetary damages for any breach of fiduciary duty as a director, notwithstanding any provision of law imposing such liability, except to the extent that the DGCL prohibits the elimination or limitation of liability of directors for breaches of fiduciary duty.

Section 145 of the DGCL provides that a corporation has the power to indemnify a director, officer, employee, agent of the corporation or a person serving at the request of the corporation for another corporation, partnership, joint venture, trust or other enterprise in related capacities against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with an action, suit or proceeding to which he was or is a party or is threatened to be made a party to any threatened, ending or completed action, suit or proceeding by reason of such position, if such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, in any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful, except that, in the case of actions brought by or in the right of the corporation, no indemnification shall be made with respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or other adjudicating court determines that, despite the adjudication of liability.

Our Certificate of Incorporation and our Bylaws provide for indemnification of our directors and officers. Our Bylaws provide that we will indemnify any person who was or is a party or threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative (other than an action by or in the right of the corporation) by reason of the fact that such person is or was a legal representative, director, officer or employee or agent of our company, against expenses (including attorney's fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of our company, and with respect to any criminal action or proceeding, had no reasonable cause to believe such person's conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent will not, without more, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interest of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

**Item 15. Recent Sales of Unregistered Securities**

During the past three years, we issued the following securities, which were not registered under the Securities Act.

The Company completed a Regulation Crowdfunding offering ("Offering") under Section 4(a)(6) which provided an exemption from registration for certain crowdfunding transactions. The company filed its Offering statement on Form C through the EDGAR system and with Title3Funds.com as intermediary. The offering was for up to a maximum of $5,000,000 at a price of $1.40 per share with an offering deadline of Dec 31, 2023. The securities purchased in such offering were subject to a number of restrictions including a restriction on resale for a period of one year.

*Share Issuances*

On January 15, 2025 the Company issued shares pursuant to an Advisory Agreement with a consultant provider to support the IPO process. The scope of work includes strategic review, consulting services, IPO readiness & execution as well as capital market advisory. Pursuant to the Advisory Agreement, the Company sold 86,240 shares of common stock for $100 to the consultant.

On January 17, 2025, the Company issued 2,485 shares of common stock for services.

On January 17, 2025 the holder of its Convertible Debenture converted an aggregate principal amount of $100,000 and accrued interest of $22,356.16 into 133,441 shares of common stock at a price equal to $0.92 per share.

Subsequent to September 30, 2024 the Company issued a total of 1,418 RSU's that vest upon the completion of the Company's initial public offering.

On July 22, 2025 the Company agreed that, upon satisfaction of standard closing conditions and the closing of the Direct Listing, to issue 180,000 shares of convertible preferred stock to 6 accredited investors in a private placement transaction. Such preferred stock is convertible into shares of common stock. Thirteen million shares of such common stock are being registered pursuant to this registration statement.

On May 29, 2025, the Company issued 90,000 shares of its common stock to Sichenzia Ross Ference Carmel LLP as partial compensation for legal services rendered.

**Item 16. Exhibits**

(a) Exhibits.

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 3.1\*\*\* | [Articles of Incorporation](http://www.sec.gov/Archives/edgar/data/1837254/000121390025007595/ea022831201ex3-1_function.htm) |
| 3.2\*\*\* | [Amended and Restated Articles of Incorporation](http://www.sec.gov/Archives/edgar/data/1837254/000121390025007595/ea022831201ex3-2_function.htm) |
| 3.3\*\*\* | [Bylaws of Functional Brands Inc.](http://www.sec.gov/Archives/edgar/data/1837254/000121390025007595/ea022831201ex3-3_function.htm) |
| 3.4\*\*\* | [Amendment Name Change](http://www.sec.gov/Archives/edgar/data/1837254/000121390025007595/ea022831201ex3-4_function.htm) |
| 3.5\*\*\* | [Cert of Amendment Increase Authorized Shares](http://www.sec.gov/Archives/edgar/data/1837254/000121390025007595/ea022831201ex3-5_function.htm) |
| 3.6\*\*\* | [Cert of Amendment Reverse Split and Increase of authorized](http://www.sec.gov/Archives/edgar/data/1837254/000121390025007595/ea022831201ex3-6_function.htm) |
| 3.7\*\*\* | [Consent Resolution – Reverse Split](http://www.sec.gov/Archives/edgar/data/1837254/000121390025007595/ea022831201ex3-7_function.htm) |
| 3.8\*\*\* | [Form of Certificate of Designation, Preferences and Rights of the Series A Convertible Preferred Share](http://www.sec.gov/Archives/edgar/data/1837254/000121390025075072/ea025255301ex3-8_function.htm) |
| 3.9\*\*\* | [Form of Certificate of Designation, Preferences and Rights of the Series B Convertible Preferred Share](http://www.sec.gov/Archives/edgar/data/1837254/000121390025075072/ea025255301ex3-9_function.htm) |
| 4.1\*\*\* | [Specimen Common Stock Certificate](http://www.sec.gov/Archives/edgar/data/1837254/000121390025013149/ea023094101ex4-2_functional.htm) |
| 4.2\*\*\* | [Form of Placement Agent's Warrant](https://www.sec.gov/Archives/edgar/data/1837254/000121390025075072/ea025255301ex4-2_function.htm) |
| 4.3\* | [Amendment to the Placement Agent's Warrant](ea025559001ex4-3_function.htm) |
| 5.1\*\*\* | [Opinion of Sichenzia Ross Ference Carmel LLP](https://www.sec.gov/Archives/edgar/data/1837254/000121390025049411/ea024336701ex5-1_fun.htm) |
| 10.1\*\*\* | [License Agreement, dated July 7, 2021, between Trailer Park Boys Incorporated and Hemptown Organics Corp.](http://www.sec.gov/Archives/edgar/data/1837254/000121390025007595/ea022831201ex10-1_function.htm) |
| 10.2\*\*\* | [Amendment to the License Agreement, dated August 16, 2023, between Trailer Park Boys Incorporated and Hemptown Organics Corp.](http://www.sec.gov/Archives/edgar/data/1837254/000121390025007595/ea022831201ex10-2_function.htm) |
| 10.3\*\*\* | [Agreement, dated January 20, 2023, between HS Wholesale and Hemptown Naturals, Inc.](http://www.sec.gov/Archives/edgar/data/1837254/000121390025007595/ea022831201ex10-3_function.htm) |
| 10.4\*\*\* | [Asset Purchase Agreement dated June 28, 2019](http://www.sec.gov/Archives/edgar/data/1837254/000121390025007595/ea022831201ex10-4_function.htm) |
| 10.5\*\*\* | [Amendment No. 1 to the Asset Purchase Agreement dated November 30, 2021](http://www.sec.gov/Archives/edgar/data/1837254/000121390025007595/ea022831201ex10-5_function.htm) |
| 10.6\*\*\* | [Amendment No. 2 to the Asset Purchase Agreement dated May 16, 2022](http://www.sec.gov/Archives/edgar/data/1837254/000121390025007595/ea022831201ex10-6_function.htm) |
| 10.7\*\*\* | [Trademark Assignment Agreement dated July 11, 2019](http://www.sec.gov/Archives/edgar/data/1837254/000121390025007595/ea022831201ex10-7_function.htm) |
| 10.8\*\*\* | [Domain Names Transfer Agreement dated July 11, 2019](http://www.sec.gov/Archives/edgar/data/1837254/000121390025007595/ea022831201ex10-8_function.htm) |
| 10.9\*\*\* | [Assignment of Intangible Assets dated July 11, 2019](http://www.sec.gov/Archives/edgar/data/1837254/000121390025007595/ea022831201ex10-9_function.htm) |
| 10.10\*\*\* | [First Amended Forbearance Agreement dated December 27, 2022](http://www.sec.gov/Archives/edgar/data/1837254/000121390025007595/ea022831201ex10-10_function.htm) |
| 10.11\* | [Employment Agreement, effective March 11, 2025, between, Functional Brands Inc. and Eric Gripentrog](ea025559001ex10-11_function.htm) |
| 10.12\*\*\* | [Employment Agreement, dated April 1, 2023, between HTO Holdings Inc., Functional Brands Inc. and Hemptown Organics Corp., and Tariq Rahim](http://www.sec.gov/Archives/edgar/data/1837254/000121390025007595/ea022831201ex10-12_function.htm) |
| 10.13\*\*\* | [ISO Certification - Purity Labs](http://www.sec.gov/Archives/edgar/data/1837254/000121390025007595/ea022831201ex10-13_function.htm) |
| 10.14\*\*\* | [Kirkman Certification validation from Purity](http://www.sec.gov/Archives/edgar/data/1837254/000121390025007595/ea022831201ex10-14_function.htm) |
| 10.15\*\*\* | [Testing Standards - The Forum](http://www.sec.gov/Archives/edgar/data/1837254/000121390025007595/ea022831201ex10-15_function.htm) |
| 10.16\*\*\* | [Schedule A to the Asset Purchase Agreement (Warranty Bill of Sale)](http://www.sec.gov/Archives/edgar/data/1837254/000121390025007595/ea022831201ex10-16_function.htm) |
| 10.17\*\*\* | [iHerb Inc agreement - Kirkman](http://www.sec.gov/Archives/edgar/data/1837254/000121390025007595/ea022831201ex10-17_function.htm) |
| 10.18\*\*\* | [Amendment to License Agreement with the Trailer Park Boys 9/25/2024](http://www.sec.gov/Archives/edgar/data/1837254/000121390025007595/ea022831201ex10-18_function.htm) |
| 10.19\*\*\* | [Fourth Amended Forbearance](http://www.sec.gov/Archives/edgar/data/1837254/000121390025007595/ea022831201ex10-19_function.htm) |
| 10.20\*\*\* | [Confession of Judgement](https://www.sec.gov/Archives/edgar/data/1837254/000121390025049411/ea024336701ex10-20_fun.htm) |
| 10.21\* | [Sixth Amended Forbearance](ea025559001ex10-21_function.htm) |
| 10.22\* | [Seventh Amended Forbearance](ea025559001ex10-22_function.htm) |
| 10.23\*\*\* | [Form of Securities Purchase Agreement](https://www.sec.gov/Archives/edgar/data/1837254/000121390025075072/ea025255301ex10-23_function.htm) |
| 10.24\*\*\* | [Form of Lock up](https://www.sec.gov/Archives/edgar/data/1837254/000121390025075072/ea025255301ex10-24_function.htm) |
| 10.25\*\*\* | [Marketing Services Agreement, dated July 23, 2025, between the Company and Outside The Box Capital Inc.](https://www.sec.gov/Archives/edgar/data/1837254/000121390025075072/ea025255301ex10-25_function.htm) |
| 10.26\* | [Escrow Agreement, dated August 6, 2025](ea025559001ex10-26_function.htm) |
| 10.27\* | [Amendment to the Placement Agency Agreement](ea025559001ex10-27_function.htm) |
| 10.28\* | [Eighth Amended Forbearance](ea025559001ex10-28_function.htm) |
| 10.29\*\* | Form of Amendment to Securities Purchase Agreement |
| 23.1\* | [Consent of TAAD LLP](ea025559001ex23-1_function.htm) |
| 23.2\*\*\* | [Consent of Sichenzia Ross Ference Carmel LLP (included in Exhibit 5.1)](http://www.sec.gov/Archives/edgar/data/1837254/000121390025049411/ea024336701ex5-1_fun.htm) |
| 99.1\*\*\* | [Audit Committee Charter](http://www.sec.gov/Archives/edgar/data/1837254/000121390025007595/ea022831201ex99-1_function.htm) |
| 99.2\*\*\* | [Compensation Committee Charter](http://www.sec.gov/Archives/edgar/data/1837254/000121390025007595/ea022831201ex99-2_function.htm) |
| 99.3\*\*\* | [Nominating and Corporate Governance Committee Charter](http://www.sec.gov/Archives/edgar/data/1837254/000121390025007595/ea022831201ex99-3_function.htm) |
| 99.4\*\*\* | [Consent of Girard Smith as Director Nominee](http://www.sec.gov/Archives/edgar/data/1837254/000121390025007595/ea022831201ex99-4_function.htm) |
| 99.5\*\*\* | [Consent of Blake Janover as Director Nominee](http://www.sec.gov/Archives/edgar/data/1837254/000121390025007595/ea022831201ex99-5_function.htm) |
| 99.6\*\*\* | [Consent of Lourdes Felix as Director Nominee](http://www.sec.gov/Archives/edgar/data/1837254/000121390025007595/ea022831201ex99-6_function.htm) |
| 99.7\*\*\* | [Executive Compensation Clawback Policy](http://www.sec.gov/Archives/edgar/data/1837254/000121390025007595/ea022831201ex99-7_function.htm) |
| 107\*\*\* | [Filing Fee Table](https://www.sec.gov/Archives/edgar/data/1837254/000121390025075072/ea025255301ex-fee_function.htm) |

---

\*\*\* Previously filed. <br> \*\* To be filed by Amendment <br> \* Filed herewith

(b) Financial Statement Schedules.

All financial statement schedules are omitted because the information called for is not required or is shown either in the financial statements or in the notes thereto.

**Item 17. Undertakings**

(a) The
 undersigned registrant hereby undertakes:

&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;(i) To
 include any prospectus required by Section 10(a)(3) of the Securities Act;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) To
 reflect in the prospectus any facts or events arising after the effective date of the registration
 statement (or the most recent post-effective amendment thereof) which, individually or in
 the aggregate, represent a fundamental change in the information set forth in the registration
 statement. Notwithstanding the foregoing, any increase or decrease in volume of securities
 offered (if the total dollar value of securities offered would not exceed that which was
 registered) and any deviation from the low or high end of the estimated maximum offering
 range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b)
 if, in the aggregate, the changes in volume and price represent no more than 20% change in
 the maximum aggregate offering price set forth in the "Calculation of Registration
 Fee" table in the effective registration statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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;(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;(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;(4) That,
 for the purpose of determining liability under the Securities Act to any purchaser, 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, 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;(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;(i) Any
 preliminary prospectus or prospectus of the undersigned registrant relating to the offering
 required to be filed pursuant to Rule 424;

&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;(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;(iv) Any
 other communication that is an offer in the offering made by the undersigned registrant to
 the purchaser.

(b) 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.

(c) 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.

(d) 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 on September 3, 2025.

---

| | |
|:---|:---|
| **Functional Brands Inc.** | **Functional Brands Inc.** |
| By: | /s/ Eric Gripentrog |
|  | Eric Gripentrog |
|  | Chief Executive Officer, and Director |

---

---

| | | |
|:---|:---|:---|
| **SIGNATURE** | **TITLE** | **DATE** |
| /s/ Eric Gripentrog | Chief Executive Officer and Director | September 3, 2025 |
| Eric Gripentrog | (Principal Executive Officer) |  |
| /s/ Tariq Rahim | Chief Financial Officer, and Director | September 3, 2025 |
| Tariq Rahim | (Principal Financial & Accounting Officer) |  |

---

## Exhibit 4.3

**Exhibit 4.3**

**AMENDMENT TO **<br> PLACEMENT AGENT COMMON STOCK PURCHASE WARRANT**

This AMENDMENT TO PLACEMENT AGENT COMMON STOCK PURCHASE WARRANT (this "<u>Amendment</u>") is entered into as of August 21, 2025, by and between Functional Brands Inc., a Delaware Corporation (the "<u>Company</u>"), and Joseph Gunnar & Co., LLC, a Delaware limited liability company (the "<u>Holder</u>").

WHEREAS, the Holder is the holder of Placement Agent Common Stock Purchase Warrants, issued by the Company on July 22, 2025 (the "<u>Original Warrants</u>"), to purchase common stock of the Company, par value $0.00001 per share (the "<u>Common Stock</u>");

WHEREAS, pursuant to Section 6(l) of the Original Warrant, the Original Warrants may be modified or amended or the provisions thereof waived with the written consent of the Company and the Holder; and

WHEREAS, the Company and the Holder desire to amend the Original Warrant as set forth in this Amendment.

NOW, THEREFORE, in consideration of the mutual agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Company and the Holder hereby agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Amendment to the Introductory Paragraph</u>. The Introductory Paragraph of the Original Warrant is hereby amended and restated in its entirety as follows:

"Warrant Shares: 80,000 Issue Date: July 22, 2025

THIS PLACEMENT AGENT COMMON STOCK PURCHASE WARRANT (the "<u>Warrant</u>") certifies that, for value received, Joseph Gunnar & Co., LLC, or its registered assigns (the "<u>Holder</u>") is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after January 22, 2026 (the "<u>Initial Exercise Date</u>") until 5:00 p.m. (New York City time) on the date that is five years following the Initial Exercise Date (the "<u>Termination Date</u>") but not thereafter, to subscribe for and purchase from FUNCTIONAL BRANDS INC., a Delaware corporation (the "<u>Company</u>"), up to 80,000 shares (as subject to adjustment hereunder, the "<u>Warrant Shares</u>") of common stock of the Company, par value $0.00001 per share (the "<u>Common Stock</u>"). The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b). This Warrant is issued pursuant to that certain Placement Agent Agreement, by and between the Company and the Holder, dated as of July 22, 2025, as amended on August 21, 2025 (the "<u>Placement Agent Agreement</u>")."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Amendment to "Exercise Price"</u>. Section 2(b) of the Original Warrant is hereby amended and restated in its entirety with the following:

"b) <u>Exercise Price</u>. The aggregate exercise price of this Warrant shall be $8.00 subject to adjustment hereunder (the "<u>Exercise Price</u>")."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>No Further Amendment</u>. Except as amended by this Amendment, the Original Warrant remains unaltered and shall remain in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Jurisdiction</u>. All questions concerning the construction, validity, enforcement and interpretation of this Amendment shall be determined in accordance with the provisions of that certain Securities Purchase Agreement, dated as of July 22, 2025, between the Company and the Holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Counterparts</u>. This Amendment may be executed in any number of counterparts, each of which will be deemed an original and all of which together will constitute one and the same instrument. Signatures delivered by facsimile, electronic mail (including as a PDF file) or other transmission method shall be deemed to be original signatures, shall be valid and binding, and, upon delivery, shall constitute due execution of this Amendment.

[*Signature Page Follows*]

IN WITNESS WHEREOF, each of the Company and the Holder has caused this Amendment to be executed and delivered by its officer thereunto duly authorized as of the date first above indicated.

---

| | |
|:---|:---|
| **COMPANY** | **COMPANY** |
| FUNCTIONAL BRANDS INC. | FUNCTIONAL BRANDS INC. |
| By: | */s/ Eric Gripentrog* |
| Name: | Eric Gripentrog |
| Title: | Chief Executive Officer |
| **HOLDER** | **HOLDER** |
| JOSEPH GUNNAR & CO., LLC | JOSEPH GUNNAR & CO., LLC |
| By: | */s/ Stephan A. Stein* |
| Name: | Stephan A. Stein |
| Title: | President and Chief Operating Officer |

---

## Exhibit 10.11

**Exhibit 10.11**

**EXECUTIVE EMPLOYMENT AGREEMENT**

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement") is dated and made effective as of the 1st day of March 2025 (the "Effective Date")

BETWEEN:

**Functional Brands Inc.,** a company incorporated under the laws of Delaware having its principal offices at 6400 SW Rosewood Street, Lake Oswego, OR 97035(Functional Brands Inc. and its subsidiaries is hereinafter referred to as (the **"Company"))**

AND:

**Eric Gripentrog,** an individual having an address at 7572 SW Hansen Lane, Tigard, OR 97224

(hereinafter referred to as the "Executive")

**WHEREAS:**

A. The Company carries on the business of manufacturing, marketing
and selling consumer packaged goods through its subsidiaries; and

B. The Company wishes to employ the Executive as its Chief Executive
Officer ("CEO") and the Executive wishes to accept such employment in accordance with and subject to the terms of this Agreement.

**NOW THEREFORE** in consideration of the premises and mutual covenants herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by both parties, the parties hereby covenant and agree with each other as follows:

**1.** **EMPLOYMENT** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.1 <u>Effective Date.</u>** This Agreement is effective as of March 1, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.2 <u>Position and Term.</u>** The Company hereby employs the Executive as CEO of the Company. The term of this Agreement commencing on the Effective Date with an original term of 12 months (the **"Term"),** subject to automatic twelve-month renewals for each subsequent year unless earlier terminated as provided herein..

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.3 <u>Duties and Reporting.</u>** The Executive shall report to and be directly responsible to the Board of Directors of the Company (the "Board"). The Executive is responsible for the duties and authorities as set out in Schedule "A", including those duties commonly associated with the position of CEO. The Executive shall also perform and execute such other duties as may be assigned by the Company from time to time. The Executive will devote his full time, attention and ability to the business and affairs of the Company and its subsidiaries as required to fulfil the Executive's duties outlined in this agreement and shall not engage in any other work for remuneration without the written consent of the Company.

2. COMPENSATION

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.1 <u>Base Salary Pre- Listing.</u>** Until such time as the common stock of the Company has been listed on a NASDAQ exchange (the "Listing"), Company will pay the Executive an annual salary of USD $280,000, paid in biweekly installments. 'Salary' means the remuneration described in this section (subject to adjustment under Section 2.2 below) and does not include any other payments such as incentives, bonuses, Restricted Stock Units (RSU's), Deferred Share Units (DSU's), stock options, benefits or amounts of a similar nature.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.2 <u>Base Salary Post-Listing.</u>** From and including the date the Listing is obtained, the Company will pay the Executive an annual salary of USD $360,000, paid in biweekly installments. 'Salary' means the remuneration described in this section (subject to adjustment under Section 2.2 below) and does not include any other payments such as incentives, bonuses, Restricted Stock Units (RSU's), Deferred Share Units (DSU's), stock options, benefits or amounts of a similar nature.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.3 <u>Annual Bonus</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) For each complete calendar year of the Employment Term, the
Executive shall be eligible to receive an annual bonus (the **"Annual Bonus").** The Executive's annual target bonus (the **"Target Bonus")** opportunity shall be equal to 100% of Base Salary. *(schedule B).* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Annual Bonus, if any, will be paid within three (3) months
after the end of each applicable calendar year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.4 <u>Performance Equity Awards:</u>** With respect to each calendar year of the Company ending during the Employment Term, the Executive shall be eligible to receive a Performance Equity Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) RSUs equal to $500,000 which vest six (6) months after the
completion of the Listing, and valued at the price of the stock upon the date of vesting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The value of $500,000 worth of Company common stock upon closing of each acquisition post Listing with such shares valued at the price
of the Company's stock upon completion of the acquisition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The value of $250,000 worth of Company common stock upon the Company achieving positive EBIDTA for the first time in any calendar
year with such shares valued at the price of the Company's stock at the end of such calendar year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The value of $1,000,000 worth of Company common stock upon the Company achieving a positive EBIDTA of $5 million for the first time
in any calendar year with such shares valued at the price of the Company's stock at the end of such calendar year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The value of $1,000,000 worth of Company common stock upon the Company achieving a first time market valuation of $100 Million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The value of $2,500,000 worth of Company common stock upon the Company achieving a first time market valuation of $250 Million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.5 <u>Review.</u>** The Board, with the approval and recommendation of the Compensation Committee of the Board, will review the Base Salary and Annual Bonus annually and will make adjustments it deems reasonable. These reviews will take into account, but shall not be limited to considering, the Executive's performance, the financial and operating success of the Company in the preceding twelve (12) months and salaries for comparable positions in the marketplace. Such review will take place within 90 days following the fiscal year end of the Company and Base Salary payable to the Executive hereunder shall thereafter, until the earlier of such determination by the Board or a further written agreement of the parties, be the Base Salary as so adjusted, without the need for a formal amendment of this Agreement. Except as contemplated in Section 2.1, the Base Salary shall not be reduced, except with the written consent of the Executive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.6 <u>Car Allowance.</u>** During the term of this Agreement, or until such time as this Agreement is terminated under Section 4, the Company will cover monthly vehicle insurance expenses of up to USD $300/month.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.7 <u>Phone.</u>** During the term of this Agreement, or until such time as this Agreement is terminated under Section 4, the Company will provide up to USD $70 monthly phone allowance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.8 <u>Expenses.</u>** The Executive shall be reimbursed by the Company for out-of-pocket expenses actually, necessarily and properly incurred on behalf of and for the benefit of the Company by the Executive in the discharge of his duties. The Executive agrees that such reimbursements shall be due only after the Executive has rendered an itemized expense account to the Company showing all monies actually expended on behalf of the Company and such other information as may be required and requested by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.9 <u>Group Benefits.</u>** The Executive will be enrolled in the Company's group medical benefits plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.10 <u>Vacation.</u>** The Executive shall be entitled to five (5) weeks of paid vacation, which will accrue pro rata on a monthly basis, to be taken at such time or times as shall be agreed between the Executive and the Board. Unused vacation, up to five (5) weeks, can be rolled over into the following year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.11 <u>Indemnity.</u>** The Company shall, to the extent permissible under law, indemnify the Executive from and against all actions, claims and demands brought against the Executive by any third party relating to the performance of the Executive's employment, provided that the Executive's actions were in good faith and did not involve gross negligence, criminal activity, breach of fiduciary duty, willful neglect or any willful failure to carry out a lawful instruction from the Company.

3. TERMINATION

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.1 <u>Resignation.</u>** The Executive may terminate this Agreement at any time by giving the Company a one- month advance written notice, in which event, the Executive shall be entitled to receive unpaid salary and vacation pay earned to the date of termination and payment of any reimbursable expenses, but shall not otherwise be entitled to a Severance (as defined below). The Company may waive all or part of such notice and pay compensation in lieu. The Executive will work diligently during the 30 day period to help with transition to a new CEO.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.2 <u>Termination without Cause and Resignation for Good Reason.</u>** The Company may terminate this Agreement and the employment of the Executive without Cause (as defined below) at any time by notice in writing stating the last day of employment and the Executive may resign for Good Reason (as defined below in 3.5) (in either case, the "Termination Date"), in which events the Company shall be obligated to provide the Executive with the compensation set out below (the "Severance"). Severance shall be payable by the fifth day following the Termination Date and shall consist of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The full amount of the installments falling due to the respect of the Executive's Salary through the Termination Date plus the amount
of any accrued unpaid vacation pay to the Termination Date, the amount of any expenses reimbursable, and the amount, if any, of any other
compensation actually accrued and then payable to the Executive which has not been paid, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) A payment which shall be comprised of

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) A cash amount equal to six (6) month's Salary as in effect as the Termination Date. If the EmployCLment agreement is terminated after
September 1<sup>st</sup>, 2025, the Executive will be entitled to twelve (12) month's salary as severance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Company shall maintain any existing benefits, including professional dues, but not including disability insurance coverage or
prerequisites of employment such as mobile phone, parking, etc. for the Executive on the same terms as while employed until the earlier
of the Executive securing comparable alternate benefits with another employer or the expiry of the period for which the Executive is receiving
Salary under subsection 3.2 (b) (i.). To the extent the Company is unable to extend any such Benefit coverage for any portion of such
period after reasonable efforts to obtain same; the Company shall pay the Executive the amount sufficient to purchase comparable coverages
for such time; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) All of the Executive's unexercised stock options; vested or unvested, shall survive the termination of the Agreement and continue
to vest and will remain exercisable for a period of (3) months following the Termination Date and the expiry date of such options.

The Executive agrees to accept the Severance in full satisfaction of any and all claims the Executive has or may have against the Company for a termination or resignation as contemplated hereunder, including the entitlement to reason or contractual notice of termination. The Company shall remain bound by the terms of any stock option or other incentive agreements between the Company and the Executive, as amended by subsection 4.2 (b) (iii).

The Severance shall be subject to all applicable withholdings required by law. In return for the Severance, the Executive shall execute a release in form and content acceptable to the Company, acting responsibly. Of all claims arising upon such termination of employment (other than the Executive's claim for the performance of the other obligations comprising the Severance). If the Executive does not execute such a release, the Executive shall, in lieu of the Severance, be provided with the minimum payments applicable under employment standards legislation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.3 <u>Termination for Cause.</u>** The Company may at any time terminate the employment of the Executive and this Agreement for Cause. Without limiting the generality of the foregoing, "Cause" shall include but not be limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any material act of fraud, breach of fiduciary duty or material dishonesty;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) willful neglect of duties to a material degree following a thirty-day opportunity to cure, after receipt of written notice from the
Company detailing such failure;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) personal conduct on the Executive's part which is of such a serious and substantial nature that it will substantially injure the reputation
of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) if the conduct of the Executive is determined by the Board, which determination shall be made in a bona fide and reasonable manner,
to be detrimental to the business of the Company and if the Executive persists in such conduct after being informed of the Company's determination;
or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) A material act of dishonesty by the Executive in connection with the performance of the Executive's duties to the Company.

In such event, the Executive shall not be entitled to any Severance, compensation or notice, but shall be entitled to receive any unpaid Salary and vacation pay earned to the termination date and payment of any reimbursable expenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.4 <u>Good Reason Defined.</u>** As used, herein, "Good Reason" means the occurrence of one of the following events without the Executive's express written consent:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) A reduction or pay or lack of pay by the Company in the Executive's Salary

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The failure by the Company to continue in effect, or a material change in the terms of the Executive's Benefits, including any life,
health, accident, disability or similar plan providing welfare benefits or any plan or program of fringe benefits in which the Executive
is participating, the effect of which would be to materially reduce the total value, in the aggregate, of the Benefits, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Company requiring the Executive to be based anywhere other than the location that the Executive is based as at the time of a Change
of Control, except for required travel on the Company's business to an extent substantially consistent with the Executive's business travel
obligations in the ordinary course of business immediately prior to the Change of Control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Company's inability to make the appropriate payments to acquire the Kirkman business

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.5 <u>No Mitigation.</u>** The Executive shall not be required to mitigate the amount of any payments provided for in Sections, 4.2 by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Part 4 be reduced by any compensation earned by the Executive as the result of employment by another employer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.6 <u>Satisfaction.</u>** The Executive acknowledges and agrees that the payments provided in Section 4.2 of this Agreement are inclusive of any compensation of payments including, but not limited to, benefits, notice and pay in lieu if notice or severance payments to which the Executive may be entitled under any employment legislation or otherwise at law.

**3.7 <u>Right to Deduct.</u>** The Company shall have the right to offset any amounts properly due by the Executive to the Company against any amounts payable by the Company to the Executive under this Agreement.

4. NON-COMPETITION, NON-SOLICITATION, CONFIDENTIALITY AND INTELLECTUAL
PROPERTY

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.1 <u>Non-Competition</u>.** The Executive acknowledges and agrees that for a period of three months following the termination of this Agreement, for any reason whatsoever, shall not, either directly or indirectly, as an agent, employee, or in any other capacity, engage or participate in any business that is operates in the hemp and/or cannabinoid industry. If the Company does not make the appropriate payments to acquire the Kirkman business, or provide consistent 'Salary' pay to the Executive, the noncompetition (4.1) clause is null and void.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.2 <u>Non-Solicitation of Employees.</u>** The Executive acknowledges and agrees that during the period of his employment with the Company and for a period of three (3) months following termination or resignation of employment with the Company for any reason whatsoever, he will not, directly or indirectly, solicit or attempt to induce any officer, employee, contractor, agent or consultant of the Company or any of its subsidiaries or its affiliates or who was such an officer, employee, contractor, agent or consultant within the year preceding the termination of this Agreement, away from employment with the Company or the Company's affiliate, as applicable, whether or not such person would commit a breach of contract by reason of leaving the Company or the affiliate, as applicable. If the Company does not make the appropriate payments to acquire the Kirkman business, the non-solicitation (4.2) clause is null and void.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.3 <u>Non-Solicitation of Customers.</u>** The Executive acknowledges and agrees that during the period of his employment with the Company and for a period of three (3) months following termination or resignation of employment with the Company for any reason whatsoever, he will not, directly or indirectly, contact or solicit any designated customers or clients of the Company or any of its affiliates for the purpose of selling to the designated customers or clients any products or services which are the same as or substantially similar to, or in any way competitive with, the products or services sold by the Company or any of its affiliates during the Executive's period of employment with the Company or at the end thereof, as the case may be. For the purposes hereof, a "designated customer or client" means a person who was a customer or client of the Company or of any of its affiliates during some part of the Executive's period of employment with the Company/and whom the Executive had direct dealings at any time within the last twelve (12) months of employment. If the Company does not make the appropriate payments to acquire the Kirkman business, the non-solicitation of customer (4.3) clause is null and void.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.4 <u>Confidentiality</u>.** The Executive understands, covenants and agrees that, in the performance of the Executive's obligations under this Agreement, the Executive will obtain knowledge of Confidential Information (as hereinafter defined) relating to the business or affairs of the Company or of any of its subsidiary or affiliated companies. The Executive agrees that the Executive shall not, without the prior written consent of the Board, either before or after termination of this Agreement, directly or indirectly, whether as owner, shareholder, director, agent, officer, employee, consultant, independent contractor or in any other capacity whatsoever, of a corporation, partnership or proprietorship:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) use or disclose any Confidential Information outside of the Company (or any of its subsidiary or affiliated companies) or for any
use or purpose other than those of the Company (or any of its subsidiary or affiliated companies);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) publish any article with respect thereto; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) except in providing the Services, remove or aid in the removal from the premises of the Company any Confidential Information or any
property or material relating thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.5 <u>Definition of Confidential Information.</u>** In this Agreement, "Confidential Information" means any information or knowledge including, without limitation, any formula, pattern, design, system, program, device, software, plan, budgets, costs, customer information, results of operations, process, know how, research, discovery, strategy, method, idea or compilation of information that: (i) relates to the business or affairs of the Company (or any of its subsidiary or affiliated companies) or to any inventions or results from its or their research and/or development activities; (ii) is private or confidential in that it is not generally known or available to the public; or (iii) gives or would give the Company (or any of its subsidiary or affiliated companies) an opportunity to obtain an advantage over competitors who do not know of or use it.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.6 <u>Ownership of Documents and Records.</u>** All documents, software, records, work papers, notes, memoranda and similar records of or containers of Confidential Information made or compiled by the Executive at any time for the Company or made available to the Executive at any time during his employment by the Company (whether before the effective date of this Agreement or thereafter) including all copies thereof, shall be the property of the Company and belong solely to it, and shall be held by the Executive solely for the benefit of the Company and shall be delivered to the Company by the Executive upon termination of the Executive's employment with the Company or at any other time upon request by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7 <u>**Ownership of Rights.**</u> The Executive shall during the term of this Agreement disclose promptly to the Company in writing all ideas, inventions, formulae and discoveries related to the Company's business, whether or not conceived or developed under direction of the Company or from knowledge and experience gained indirectly from other projects/departments of the Company. The Executive acknowledges that those ideas, inventions, formulae and discoveries shall be the property of the Company, which shall have the exclusive right to any patents, trademarks, copyrights, licenses or any other protection which may be issued thereon or which may arise with respect thereto. The Executive assigns to the Company all the Executive's right, title and interest in such ideas, inventions and discoveries and all the Executive's right, title and interest in any patent, copyright, trademark, license or other protection which may be issued or which may arise with respect thereto. The Executive shall execute and deliver all such instruments as the Company may require in order to establish and protect its rights of ownership in any patent, copyright, trademark, license or other protection referred to herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.8 <u>Notification of Claims.</u>** The Executive shall promptly notify the Board of any suit, proceeding or other action commenced or taken against the Company or of any fact or circumstances of which the Executive is aware which may reasonably form the basis of any suit, proceeding or action against the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.9 <u>Compliance with Policies.</u>** The Executive acknowledges that the Company maintains certain policies relating to the conduct of employees and relating to other matters. The parties agree that the introduction, administration, amendment and deletion of those policies is within the sole discretion of the Company, reasonably exercised, and that the Executive shall comply with all such policies in force from time to time. If the Company introduces, amends or deletes any such policies, such introduction, amendment or deletion shall not constitute a breach of this Agreement. The Executive shall abide by and carry out all such policies of the Company placed in effect to establish and protect the confidence of Confidential Information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.10 <u>Injunctive Relief.</u>** The Executive acknowledges that any unauthorized disclosure or use of Confidential Information by the Executive may result in material damages to the Company and consents to the issuance of an injunction or other equitable remedy to prohibit, prevent or enjoin unauthorized disclosure or use of Confidential Information by the Executive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.11 <u>Return.</u>** The Executive agrees that, upon the termination of his employment, for any reason whatsoever, he shall return to the Company, without reproducing or transmitting them in any manner whatsoever, all documents, drawings sketches, files, reports, notes, copies, media, samples, programs, codes or other property or material which belong to the Company or which relate to its business or that of its affiliates or any of its clients which are in his possession or under his control, and in addition to the foregoing, the Executive shall return to the Company, upon the termination of his employment, any computer, cellular telephone, credit card, key access or identification card which is the property of the Company and which is in his possession or under his control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.12 <u>Voice-mail and email.</u>** The Executive expressly agrees and acknowledges that the content of voice mail, email and computers or other hardware which is provided to him by the Company in connection with his employment are and shall at all times remain the exclusive property of the Company, and they shall be accessible at all times to any authorized representative of the Company.

5. CONFLICT OF INTEREST<br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.1 <u>Disclosure of Conflicts of Interest.</u>** The Executive shall promptly, fully and frankly disclose to the Company in writing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) the nature and extent of any interest the Executive, or any of his Associates (as hereinafter defined), has or may have, directly
or indirectly, in any contract or transaction or proposed contract or transaction of or with the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) every office the Executive, or any of his Associates, may hold or acquire, and every property the Executive or any of his Associates,
may possess or acquire, whereby directly or indirectly a duty or interest might be created in conflict with the interests of the Company
or the duties and obligations of the Executive under this Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) the nature and extent of any conflict referred to above.

ln this Agreement, the expression "Associate" shall include all those persons and entities that are included within the definition or meaning of "associate" as set forth in section 192(1) of the Business Corporations Act (British Columbia) as amended from time to time, and shall also include the parents, brothers and sisters of the Executive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.2 <u>Avoidance of Conflicts of Interest.</u>** The Executive shall not enter into any agreement, arrangement or understanding without written consent with any other person or entity that would in any way conflict or interfere with this Agreement or the duties and obligations of the Executive under this Agreement or that would otherwise prevent the Executive from performing the Services hereunder, and the Executive hereby represents and warrants that neither he nor any of his Associates has entered into any such agreement, arrangement or understanding.

<u>**6.**</u> <u>**CHANGE IN CONTROL**</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.1 <u>Change in Control Severance</u>**<u>.</u> Except as otherwise set forth herein, if a Change in Control (as defined below) occurs, and on, or at any time during the 24 months following, the Change in Control, (i) the Company terminates Executive's employment for any reason other than Cause , or (ii) Executive terminates Executive's employment for Good Reason, Executive shall be entitled to the following benefits:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Company shall pay Executive, in a lump sum within 60 days following termination of Executive's employment, severance equal to
two times the sum of Executive's Base Salary and Bonus (the full, non-prorated Bonus for the year of termination assuming attainment of
the targeted performance goals at the 100% payout level).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Executive also shall be entitled to receive any and all vested benefits accrued under any other incentive plans to the date of termination
of employment, the amount, entitlement to, form, and time of payment of such benefits to be determined by the terms of such incentive
plans. For purposes of calculating Executive's benefits under the incentive plans, Executive's employment shall be deemed to have terminated
under circumstances that have the most favorable result for Executive under the applicable incentive plan.

If, upon the date of termination of Executive's employment, Executive holds any awards with respect to securities of the Company, (i) all such awards that are RSUs/options shall immediately become vested and exercisable upon such date and shall be exercisable thereafter until the <u>earlier</u> of the third (3rd) year anniversary of Executive's termination of employment or the expiration of the full term of the restricted stock units/options; (ii) all restrictions on any such awards of restricted stock, RSUs or other awards shall terminate or lapse, and all such awards of restricted stock, RSUs or other awards shall be vested and payable; and (iii) all performance goals applicable to any such performance-based awards that are "in cycle" (i.e., the performance period is not yet complete) shall be deemed satisfied at the "target" level (assuming 100% payout), and (iv) all such awards shall be paid in accordance with the terms of the applicable award agreement. The provisions of this subsection shall be subject (and defer) to the provisions of any incentive plan, award agreement or other agreement as it relates to an individual award to the extent such provisions provide treatment that is more favorable to Executive than the treatment described in this subsection and such more favorable provisions in such incentive plan, award agreement or other agreement shall supersede any inconsistent or contrary provision of this subsection. All of Executive's awards with respect to securities of the Company that are outstanding upon the date of termination of Executive's employment shall continue to be subject to, and enjoy the benefits and protections under, the terms of the incentive plan, the award agreement and any other plan, agreement, policy or other arrangement to which such awards are subject as of the effective date of Executive's participation, including any employment security agreement or other written compensation arrangement (even if the remaining terms thereof are waived), without application of this subsection.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.2 "Change in Control"** means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) A transaction or series of transactions (other than an offering of common
stock to the general public through a registration statement filed by the Company with the Securities and Exchange Commission) whereby
any "Person" or related "group" of "persons" (as such terms are used in Sections 13(d) and 14(d)(2) of the
Exchange Act) (other than the Company, any of its subsidiaries, an Executive benefit plan maintained by the Company or any of its subsidiaries
or a "Person" that, prior to such transaction, directly or indirectly controls, is controlled by, or is under common control
with, the Company) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13(d)(3) under the Exchange Act) of
securities of the Company possessing more than fifty percent (50%) of the total combined voting power of the Company's securities outstanding
immediately after such acquisition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) The consummation by the Company (whether directly involving the Company or
indirectly involving the Company through one or more intermediaries) of (x) a merger, consolidation, reorganization, or business combination,
or (y) a sale or other disposition of all or substantially all of the Company's assets in any single transaction or series of related
transactions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) which results in the Company's voting securities outstanding immediately
before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the Company
or the Person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all
or substantially all of the Company's assets or otherwise succeeds to the business of the Company (the Company or such Person, the **"Successor Entity")** directly or indirectly, at least a majority of the combined voting power of the Successor Entity's outstanding voting
securities immediately after the transaction, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) after which no Person or group beneficially owns voting securities representing
fifty percent (50%) or more of the combined voting power of the Successor Entity; <u>*provided, however,*</u> that no Person or group shall be treated for purposes of this <u>Section ll(d)</u> as beneficially owning fifty percent (50%) or more of the combined voting power of the Successor Entity solely as a result
of the voting power held in the Company prior to the consummation of the transaction.

A transaction shall not constitute a Change in Control if its sole purpose is to change the State of the Company's incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company's securities immediately before such transaction.

<u>7.</u> SUCCESSORS OR ASSIGNS

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>**7. 1 Successors.**</u> This Agreement shall ensure to the benefit of and be binding upon and shall be enforceable by the Company and its successors and assigns. The Company will require any successor (whether direct or indirect, by purchase, amalgamation, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume liability, jointly and severally with the Company for the performance by the Company of its obligations under this Agreement.

<u>**7.2Assignment**</u>**.** The Company shall be entitled to assign this agreement without the Executive's consent to any affiliate of the Company (as defined in the B.C. *Business Corporations* Act) on written notice to the Executive, provided there is no material change to the Executive's terms of employment. The Company shall remain jointly and severally liable to the Executive with such assignee. The Executive shall not be entitled to assign this Agreement or to pledge or grant a security interest in any obligation of the Company to make payment hereunder.

<u>**7.3Benefit Binding.**</u> This Agreement shall ensure to the benefit of, shall be binding upon, and shall be enforceable by the Executive's legal representatives, executors, administrator, successors, heirs, distributees, devisees and legatees. If the Executive dies while any amounts are still payable to the Executive under this Agreement, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to such legal representatives, executors, administrator, successors, heirs, distributees, devisees and legatees or to the Executive's estate.

<u>**8.**</u> **MISCELLANEOUS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>**8.1 Applicable Laws.**</u> This Agreement takes effect upon its acceptance and execution by the Company. The validity, interpretation, and performance of this Agreement shall be governed, interpreted, and construed in accordance with the laws of the State of Delaware, without giving effect to the principles of comity or conflicts of laws thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>**8.2 Time.**</u> Time shall be of the essence of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>**8.3 Consideration**</u>**.** The parties acknowledge and agree that this Agreement has been executed by each of them in consideration of the mutual premises and covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is acknowledged. The parties waive any and all defenses relating to an alleged failure or lack of consideration in connection with this Agreement. All dollars in this Agreement are Canadian dollars.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>**8.4 Stock Exchange Approval.**</u> The obligations of the Company hereunder, including in particular the obligations with respect to the stock options to be issued hereunder, are subject to the rules of any stock exchange upon which the common shares of the Company are listed from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>**8.5 Entire Agreement.**</u> This Agreement represents the entire Agreement between the Executive and the Company concerning the subject matter hereof and supersedes any previous oral or written communications, representations, understandings or agreements with the Company or any officer or agent thereof. This Agreement may only be amended or modified in writing signed by the parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>**8.6 Notices.**</u> Any notice, acceptance or other document required or permitted hereunder shall be considered and deemed to have been duly given if delivered by hand, emailed, or mailed by postage prepaid and addressed to the party for whom it is intended at the party's address above or to such other address as the party may specify in writing to the other and shall be deemed to have been received if delivered, on the date of delivery, and if mailed as aforesaid, then on the second business day following the date of mailing thereof, provided that if there shall be at the time of mailing or within two business days thereof a strike, slowdown or other labour dispute which might affect delivery of notice by the mails, then the notice shall only be effective if actually delivered.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>**8.7 Waiver.**</u> The waiver by the Executive or by the Company of a breach of any provision of this Agreement by the Company or by the Executive shall not operate or be construed as a waiver of any subsequent breach by the Company or by the Executive.

IN WITNESS WHEREOF the parties have executed this Agreement as of the date first above written.

---

| | | |
|:---|:---|:---|
|  | **FUNCTIONAL BRANDS INC.** |  |
| | *<u>/s/ Tariq Rahim</u>* | |
| Per: | Tariq Rahim, Director |  |
| SIGNED AND DELIVERED by **ERIC GRIPENTROG** | SIGNED AND DELIVERED by **ERIC GRIPENTROG** | SIGNED AND DELIVERED by **ERIC GRIPENTROG** |
| in the presence of: Eric Gripentrog | in the presence of: Eric Gripentrog |  |
|  | 7572 SW Hansen Ln, Tigard, OR 97035 Address |  |
|  | <u>CEO</u> |  |
|  | Occupation |  |
| | *<u>/s/ Eric Gripentrog</u>* | |
|  | **ERIC GRIPENTROG** |  |

---

**SCHEDULE "A"**

**ESSENTIAL DUTIES AND RESPONSIBILITIES OF THE CHIEF EXECUTIVE OFFICER ("CEO")**

The Executive's primary duties, as CEO of the Company are to create a positive Company culture, build and maintain a senior management team, develop, implement and execute sound business strategies for the Company and provide general oversight to the management team and staff.

The responsibility of CEO is to align the Company, internally and externally, with the strategic vision as determined by the Board of Directors of the Company. The CEO is responsible for the Company's operations, marketing, strategy, financing, creation of Company culture, human resources, hiring, firing, compliance with safety regulations and applicable laws, including securities laws applicable to the Company, investor and public relations, etc. Many of these responsibilities will be delegated to management team members and staff or external service providers.

The CEO will regularly report, on a timely basis, to the Company's Board of Directors on the results of both his efforts and the business and prospects of the Company and makes himself available to respond to enquiries of directors.

**Main Duties:**

**Go-public Transaction**

The CEO will work alongside Board and the management team to prepare and lead the Company to achieve a listing of the Company's common stock on a NASDAQ exchange..

**Development to a Sales Focused Organization**

The CEO will transition the Company to a sales focus organization across B2B and B2C markets, leveraging wholesale and bulk products, and development of consumer-packaged goods business.

**Development of a Strategic Plan**

The CEO will work with the Board and management to develop a five-year strategic business plan that addresses immediate, mid-term and longer-term issues involving corporate structure, capital allocation, risk management, key markets, mergers/acquisitions, customers and related topics.

**Development of Processes & Procedures:**

The CEO will review, assess, and work with leadership to amend, codify and implement processes and procedures to support transparency and scaling of the business (e.g. inventory management, supply chain, processing, management reporting and sales force effectiveness) as well as establish parameters of the required organizational capabilities and competencies to support human capital related initiatives.

**Operational Effectiveness:**

The CEO will work with senior management to evaluate, modify, extend commercial and economic relationships with key constituencies, including but not limited to seed providers, farmers/growers, processors, innovation, D2C providers and end use customers.

**Benefits**

The CEO will be responsible for implementation of the Company's standard employee benefit plan in alignment with the Company's capital and financial capabilities.

**SCHEDULE "B"**

**Annual Bonus**

The Executive will earn the following Bonus based upon a combination of achieving Parent Company, consolidated-revenue targets ("Revenue Targets"), The Bonus will be based 100% on the achieving of Revenue Targets

<u>Revenue Targets:</u>

All Gross consolidated revenue figures used below shall only incorporate revenue from entities apart of the Parent Group at time of execution of this Agreement ("Consolidated Revenue"). Gross revenue includes all revenue from all entities prior to any discounts. Revenue from entities acquired or merged with after the date of execution of this Agreement shall be included in the calculation of Consolidated Revenue. Revenue captured from Joint Ventures that the Parent Company, or any of its subsidiaries, are party to, shall be included in the calculation of the Consolidated Revenue for the purposes of measure success against the Revenue Targets.

---

| | |
|:---|:---|
| Consolidated Gross<br> Revenue Target | % payout<br> of Base Salary |
| Below $10,00,000 | 50% of bonus payout |
| $10,000,000 + | 100% of bonus payout |
| $15,000,000 + | 150% of bonus payout |
| $20,000,000 + | 200% of bonus payout |

---

All figures in United States Dollars (USD)

## Exhibit 10.21

**Exhibit 10.21**

**SIXTH AMENDED FORBEARANCE AGREEMENT**

This Sixth Amended Forbearance Agreement ("Agreement"), effective as of May 1, 2025, is made by and among HTO Nevada Inc. ("HTO Nevada "), HTO Holdings Inc. ("HTO Holdings"), and Functional Brands Inc., ("Functional Brands"), fka HT Naturals, Inc., a Delaware Corporation, ("Functional Brands"), jointly and severally ("Purchaser") and Kirkman Laboratories, Inc. ("Kirlanan Lab"), Kirkman Group International, Inc. ("Kirkman International" and together with Kirkman Lab referred to as the "Kirkman Parties"), Kirkman Group, Inc. ("Kirkman Group" and together with the Kirkman Parties referred to as "Sellers"), and David K. Humphrey ("Humphrey") and collectively with Purchaser and the Sellers as the "Parties" or individually as a "Party").

**RECITALS**

WHEREAS, the Parties entered into that certain Asset Purchase Agreement dated as of June 28, 2019 (the "Original Asset Purchase Agreement), that certain Amendment No. 1 to the Asset Purchase Agreement dated November 30, 2021 (the "First Amendment"), and that certain Amendment No. 2 to the Asset Purchase Agreement dated May 16, 2022 (the "Second Amendment"), Amendment No. 3 to APA dated August 1, 2024, Amendment No. 4 dated September 24, 2024; (the Original Asset Purchase Agreement, First Amendment, Second Amendment, Third Amendment, Fourth Amendment collectively, the "Asset Purchase Agreement"), and various associated agreements (the "Collateral Agreements"), in which, among other things, Sellers sold to Purchaser various assets, including certain Intangible Assets including Intellectual Property;

WHEREAS, under the Original Asset Purchase Agreement, Purchaser and HTO Holdings Inc. were to make certain payments toward the purchase price set forth in the Asset Purchase Agreement;

WHEREAS, under the First Amendment, the Parties agreed to amend the Asset Purchase Agreement's payment schedule;

WHEREAS, under the Second Amendment, the Parties made corrections to the schedules and exhibits to the Asset Purchase Agreement and the Collateral Agreements listing and relating to the Intellectual Property;

WHEREAS, under the Third Amendment, the Parties made corrections to the schedules and exhibits to the Asset Purchase Agreement and the Collateral Agreements listing and relating to the Intellectual Property;

WHEREAS, under the Fourth Amendment, the Parties made corrections to the schedules and exhibits to the Asset Purchase Agreement and the Collateral Agreements listing and relating to the Intellectual Property;

WHEREAS, under a Letter Agreement dated May 31, 2022, Purchaser has paid Purity Labs, Inc. the total sum of$100,000 (the "Purity Payment") and has Humphrey the total sum of $250,000 (the "Humphrey Payment", and together with the Purity Payment, the "Immediate Payments");

WHEREAS, the Parties executed a Forbearance Agreement (the "Forbearance Agreement") extending the payment due under the Asset Purchase Agreement to August 31, 2022.

1 - SIXTH AMENDED FORBEARANCEAGREEMENT

WHEREAS, Purchaser is in default of the August 31, 2022 payment due under the Forbearance Agreement and (the "Obligations");

WHEREAS, Purchaser has paid Sellers $65,000 due under the Asset Purchase Agreement in September 2022.

WHEREAS, the Parties executed a First Amended Forbearance Agreement on or about December 27, 2022, under which Purchaser has made the following payments: $250,000 and $15,000 interest per month for each month between September and December 2023, inclusive, and a $7,500 payment in January 2024;

WHEREAS, HTO Nevada Inc. was acquired by Functional Brands Inc. on or about May 19, 2023, as part of a corporate restructuring; and, is now a wholly owned subsidiary of Functional Brands Inc. In this transaction, HTO Holdings Inc. transferred all outstanding shares ofHTO Nevada Inc. to Functional Brands Inc. a wholly owned subsidiary.

WHEREAS, the Parties executed a Second Amended Forbearance Agreement on or about March 1, 2024, under which the Purchaser has made the following payments: $130,000 and $20,000 per month ($15,000 interest and $5,000 principal) for each month beginning March 2024 through July 2024;

WHEREAS, the Parties executed a Third Amended Forbearance Agreement on or about August 1, 2024, under which the Purchaser has made the following payments: $20,000 per month ($15,000 interest and $5,000 principal) for each month beginning August 2024 through September 2024; and an additional $20,000 principal payments in August.

WHEREAS, the Parties executed a Fourth Amended Forbearance Agreement on or about September 24, 2024, under which the Purchaser has made the following payments: $20,000 per month ($15,000 interest and $5,000 principal) for each month beginning October 1, 2024 through December 31, 2024; and an additional $20,000 principal payments in October, November and December, 2024.

WHEREAS, the Parties executed a Fifth Amended Forbearance Agreement on or about December 31, 2024, under which the Purchaser has made the following payments: $20,000 per month ($15,000 interest and $5,000 principal) for January and February 2025.

WHEREAS, the Parties informally extended the Fifth Amended Forbearance Agreement providing for payments of$50,000 on or about March 5, 2025 and $50,000 on or about April 1, 2025 and $50,000 on or about May 1, 2025.

WHEREAS, the balance due as of the date of this Sixth Amended Forbearance Agreement is $2,227,366.00.

WHEREAS, Purchaser and HTO Holdings have requested Sellers to forbear from exercising their rights and remedies under the Asset Purchase Agreement and Forbearance Agreement; and

WHEREAS, Sellers are willing to forbear from exercising such rights and remedies for a limited period of time, provided that Purchaser and HTO Holdings complies with the terms and conditions of this Agreement.

2 - SIXTH AMENDED FORBEARANCEAGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants, terms, and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u><u>Purchaser Acknowledgments</u></u>. Purchaser acknowledges and agrees that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 <u><u>Recitals.</u></u> The above recitals are true and correct.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2 <u><u>Transaction Documents.</u></u> The Asset Purchase Agreement, Collateral Agreements, Forbearance Agreement, and all other agreements, instruments, and other documents executed in connection with or relating to the Asset Purchase Agreement (the "Transaction Documents") are legal, valid, binding, and enforceable against Purchaser in accordance with their terms. Except as otherwise set forth herein, the terms of the Transaction Documents remain unchanged. Undefined capitalized terms used herein shall have the meanings ascribed thereto in the Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3 <u><u>Default.</u></u> The following Event of Default has occurred and is continuing under the Transaction Documents:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Failure to make timely payments due under the Asset Purchase Agreement, the amendments thereto and subsequent Forbearance Agreements or payment in full, with a remaining balance due under the Asset Purchase Agreement and the Fifth Forbearance Agreement of$2,227,366.00 (the "Existing Default").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.4 <u><u>Obligations.</u></u> The Obligations are not subject to any setoff, deduction, claim, counterclaim, or defenses of any kind or character whatsoever.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.5 <u><u>Collateral.</u></u> Purchaser represents that Sellers have valid, enforceable, and first position, perfected security interests in and to and liens under the Collateral Agreements, as to which there are no setoffs, deductions, claims, counterclaims, or defenses of any kind or character whatsoever.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Consistent with that letter agreement dated May 31, 2022, Purchaser aclmowledges and agrees that Sellers have had and continue to retain a security interest in and to all of Purchasers respective assets, including but not limited to any machinery, equipment, furniture, furnishings, tools, fixtures, parts, accessories, accounts , inventory, raw materials, work-in-progress, finished goods, cash, deposit accounts, investments, investment accounts, leasehold interests, permits, licenses, intellectual property, patents, patent applications, trademarks, service marks, copyrights, trade secrets, domain names, software, any other intellectual property rights, contracts, contract rights, rights under purchase orders, instruments, chattel paper, notes, drafts, any obligations for the payment of money arising out of the sale or lease of goods, any and all after acquired assets and any and all proceeds derived from the assets. Functional Brands fuc. aclmowledges and agrees that pursuant to its purchase of all outstanding shares of HTO Nevada, Inc., that it acquired HTO Nevada, Inc. subject to Seller's security interest. To the extent necessary, Purchaser, jointly and severally, hereby grant Sellers a security interest in any and all collateral and assets set forth above and elsewhere in the Original Asset Purchase Agreement, Collateral Agreements, any and all Forbearance Agreements and this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Purchaser further hereby grants Sellers a "lien" on Purchaser's accounts receivable.

3 - SIXTH AMENDED FORBEARANCEAGREEMENT

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.6 <u><u>No Waiver of Default.</u></u> Neither this Agreement, nor any actions taken in accordance with this Agreement or the Transaction Documents, shall be construed as a waiver of or consent to the Existing Default or any other existing or future defaults under the Transaction Documents, as to which Sellers' rights shall remain reserved.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.7 <u><u>Preservation of Rights and Remedies.</u></u> Upon expiration of the Forbearance Period (as defined below), all of Sellers' rights and remedies under the Transaction Documents and at law and in equity shall be available without restriction or modification, as if the forbearance had not occurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.8 <u><u>Purpose of Forbearance.</u></u> The purpose of this Agreement is to provide Purchaser with a period of time to cure the Existing Default.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.9 <u><u>Request to Forbear.</u></u> Purchaser has requested Sellers' forbearance as provided herein, which shall inure to their direct and substantial benefit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u><u>Sellers Forbearance.</u></u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 <u><u>Forbearance Period.</u></u> Subject to compliance by Purchaser with the terms and conditions of this Agreement, Sellers hereby agree to forbear from exercising their rights and remedies against Purchaser under the Transaction Documents with respect to the Existing Default during the period (the "Forbearance Period") commencing on the Effective Date (as defined below) and ending on the earlier to occur of (i) July 20, 2025 and (ii) the date that any Forbearance Default (as defined below) occurs, upon which, Sellers' forbearance, as provided herein, shall immediately and automatically cease without any requirement of notice or further action by any party (the "Termination Date"). On and from the Termination Date, Sellers may, in their sole discretion, exercise any and all remedies available to them under the Transaction Documents that otherwise would be available only by reason of the occurrence of any Events of Default thereunder or the continuation of any Existing Default.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 <u><u>Extension of Forbearance Period.</u></u> In the sole and absolute discretion of Sellers and without obligation, after the Termination Date, Sellers may renew or extend the Forbearance Period, or grant additional forbearance periods.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 <u><u>Scope of Forbearance.</u></u> During the Forbearance Period only, Sellers will not (i) accelerate the maturity of the Obligations or initiate proceedings to collect the Obligations; (ii) initiate or join in filing any involuntary bankruptcy petition with respect to Purchaser under the Bankruptcy Code, or otherwise file or participate in any insolvency, reorganization, moratorium, receivership, or other similar proceedings against Purchaser under the laws of the US; or (iii) repossess or dispose of any of the Collateral, through judicial proceedings or otherwise.

4 - SIXTH AMENDED FORBEARANCEAGREEMENT

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u><u>Conditions Precedent.</u></u> This Agreement shall not become effective unless and until the date (the "Effective Date") that each of the following conditions shall have been satisfied in Sellers' sole and absolute discretion, unless waived in writing by Sellers:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 <u><u>Delivery of Certain Documents.</u></u> Purchaser shall deliver or cause to be delivered the following documents, each in substance and form acceptable to Sellers:

&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 copy of this Agreement, duly executed by 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;(b) an updated Confession of Judgment executed by Purchaser, in the form attached hereto and incorporated herein by this reference as Appendix 3.I; 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) such other documents as Sellers may request with respect to any matter relevant to this Agreement or the transactions contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u><u>Payments During Forbearance Period.</u></u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 <u><u>Interest-Only Payments.</u></u> Purchaser has already paid a $15,000 interest payment for February 2024 and March 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 <u><u>Payments of Interest and Principal.</u></u> Purchaser has already made payments of $20,000 per month, due the frrst day of each of April, May, June, July, August, September 2024, with $15,000 of each payment allocated to interest and the remaining $5,000 of each payment allocated to principal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 <u><u>Payments of Interest and Principal.</u></u> Purchaser has also made payments of $20,000 per month for October, November and December, 2024, with $15,000 of each payment allocated to interest and the remaining $5,000 of each payment allocated to principal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 <u><u>Additional Payments.</u></u> Purchaser has already made a principal payment of $130,000 against the remaining balance over the course of 3 payments. First payment occurred on March 15, 2024 of $45,000, and subsequent payments occurred for $40,000 on April 15, 2024 and $45,000 on May 15, 2024 to satisfy the $130,000 principle payment. Purchaser made another $20,000 payment towards principal on August 15, 2024, October 15, 2024, November 15, 2024

and December 15, 2024

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5 <u><u>Additional Principal & Interest Payment:</u></u> The Purchaser has also made payments of $20,000 payment for January and February 2025, with $ I5,000 of each payment allocated to interest and the remaining $5,000 of each payment allocated to principal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6 The Purchaser has made payments of $50,000 on March 5, 2025, $50,000 on April 1, 2025 and $50,000 on May 1, 2025, with $15,000 of each payment allocated to interest and the remaining $35,000 of each payment allocated to principal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7 The Purchaser will make payments in the amounts of$30,000 on June 1, 2025, and $30,000 payment on July 1, 2025. $30,000 of each payment is hereby designated as an interest only payment, and none to principal, regardless of rate.

5 - SIXTH AMENDED FORBEARANCEAGREEMENT

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.8 <u><u>Balance Due Payment.</u></u> As of May 1, 2025, the balance due and owing is $2,227,366.00. The Purchaser shall pay Seller $2,227,366.00 by wire transfer on or before July 20, 2025, before any additional principal payments or on the date the Purchaser closes any borrowing transaction, whichever occurs sooner (the "Balance Due Payment"). The Purchaser's payment of the Balance Due Payment under this Agreement shall fully satisfy the Obligations and cure the Existing Default. Payment of the Balance Due Payment shall not act as a cure to any other default whether known or unknown at the time of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.9 Time is of the Essence as to all payments due and owing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u><u>Representations and Warranties.</u></u> Purchaser represents and warrants as to itself that all representations and warranties relating to it contained in the Transaction Documents are true and correct as of the Effective Date, except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date. Purchaser further represents and warrants to Sellers as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 <u><u>Authorization.</u></u> The execution, delivery, and performance of this Agreement are within its corporate power and have been duly authorized by all necessary corporate action.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 <u><u>Enforceability</u></u>. This Agreement constitutes a valid and legally binding Agreement enforceable against Purchaser in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, and similar laws affecting creditors' rights generally and to general principles of equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 <u><u>No Violation.</u></u> The execution, delivery, and performance of this Agreement do not and will not (i) violate any law, regulation, or court order to which Purchaser is subject; (ii) conflict with Purchaser's organizational documents; or (iii) result in the creation or imposition of any lien, security interest, or encumbrance on any property of Purchaser, or any of its subsidiaries, whether now owned or hereafter acquired, other than liens in favor of Sellers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4 <u><u>No Litigation.</u></u> No action, suit, litigation, investigation, or proceeding of or before any arbitrator or governmental authority is pending or, to the knowledge of Purchaser, threatened by or against or affecting Purchaser or against any of its property or assets with respect to any of the Transaction Documents or any of the transactions contemplated hereby or thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5 <u><u>No Change.</u></u> Except as previously disclosed to Sellers, there has been no material adverse change in the business, operations, assets, or financial or other condition of the Purchaser and its subsidiaries taken as a whole.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6 <u><u>Accuracy of Information.</u></u> All information provided by Purchaser or any of its agents, is true, correct, and complete in all material respects, as of the date provided and does not contain any untrue statements of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7 <u><u>Advice of Counsel.</u></u> Purchaser has freely and voluntarily entered into this Agreement with the advice of legal counsel of its choosing.

6 - SIXTH AMENDED FORBEARANCEAGREEMENT

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u><u>Covenants.</u></u> In addition, in order to induce Sellers to forbear from the exercise of their rights and remedies as set forth above, Purchaser hereby covenants and agrees that at all times during the Forbearance Period, unless Sellers otherwise consent in writing, as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 <u><u>Compliance with Transaction Documents.</u></u> Purchaser shall continue to perform and observe all covenants, terms, and conditions, and other obligations contained in all of the Transaction Documents and this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 <u><u>Sale of Assets.</u></u> Purchaser shall not sell, convey, transfer, assign, lease, abandon, or otherwise dispose of any of its assets, tangible or intangible (including but not limited to sale, assignment, discount, or other disposition of accounts, contract rights, or general intangibles with or without recourse), without Sellers' prior written consent. If Sellers grant written consent, Purchaser shall cause Purchaser or other transferee to pay all proceeds of such disposition directly to Sellers for application to the Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 <u><u>Perfection of Sellers' Liens.</u></u> Purchaser shall execute and deliver to Sellers such documents and take such actions as Sellers reasonably deem necessary or advisable to perfect or protect the Sellers' security interests, mortgages, or liens granted by Purchaser to Sellers under any of the Transaction Documents or this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4 <u><u>Other Financial Information.</u></u> Purchaser shall promptly provide to Sellers such other financial information as Sellers may reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5 <u><u>Further Assurances.</u></u> Promptly upon the request of Sellers, Purchaser shall take any and all reasonable actions, and execute and deliver additional documents, that relate to this Agreement and the transactions contemplated herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u><u>Release of Claims and Waiver of Defenses.</u></u> In further consideration of Sellers' execution of this Agreement, Purchaser, on behalf of itself and its successors, assigns, parents, subsidiaries, affiliates, officers, directors, employees, agents, and attorneys hereby forever, fully, unconditionally and irrevocably waives and releases Sellers and their successors, assigns, parents, subsidiaries, affiliates, officers, directors, employees, attorneys, and agents (collectively, the "Releasees") from any and all claims, liabilities, obligations, debts, causes of action (whether at law or in equity or otherwise), defenses, counterclaims, setoffs, of any kind, whether ]mown or unknown, whether liquidated or unliquidated, matured or unmatured, fixed or contingent, directly or indirectly arising out of, connected with, resulting from, or related to any act or omission by any Sellers or any other Releasee with respect to the Transaction Documents and any Collateral, other than any Sellers' or any Releasee's willful acts or omissions, on or before the date of this Agreement (collectively, the "Claims"). Purchaser further agrees that Purchaser shall not commence, institute, or prosecute any lawsuit, action, or other proceeding, whether judicial, administrative, or otherwise, to collect or enforce any Claim.

7 - SIXTH AMENDED FORBEARANCEAGREEMENT

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u><u>Indemnification</u></u>. Purchaser hereby expressly acknowledges, agrees, and reaffirms its indemnification obligations to Sellers and the other Indemnified Parties set forth in the Transaction Documents. Purchaser further acknowledges, agrees, and reaffirms that all such indemnification obligations shall survive the expiration of the Forbearance Period and the termination of this Agreement, the Transaction Documents, and the payment in full of the Obligations. Notwithstanding the foregoing, such indemnity shall not be available to the extent that such claims, damages, losses, liabilities, or related expenses result solely from a Lender's or other Indemnified Party's gross negligence or willful misconduct.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u><u>Events of Default.</u></u> The occurrence of one or more of the following shall constitute a "Forbearance Default" under this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1 Purchaser shall fail to abide by or observe any term, condition, covenant, or other provision contained in this Agreement or any document related to or executed in connection with this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2 A default or event of default shall occur under any Transaction Document or any document related to or executed in connection with this Agreement or any of the Transaction Documents (other than the Existing Default).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3 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;(a) becomes insolvent;

&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) is generally not, or is unable to, or admits in writing its inability to, pay its debts as they become due;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) (i) commences any case, proceeding, or other action under any existing or future requirement oflaw relating to bankruptcy, insolvency, reorganization, or other relief of debtors, seeking (A) to have an order for relief entered with respect to it, or (B) to adjudicate it as bankrupt or insolvent, or (C) reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition, or other relief with respect to it or its debts, or (D) appointment of a receiver, trustee, custodian, conservator, or other similar official for it or for all or any substantial part of its assets, or (ii) makes a general assigrnnent for the benefit of its creditors;

&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) has commenced against it in a court of competent jurisdiction any case, proceeding, or other action of a nature referred to in clause (c) above which (i) results in the entry of an order for relief or any such adjudication or appointment or (ii) remains undismissed, undischarged, unstayed, or unbonded for 30 days; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) ceases to conduct business in the ordinary course.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4 Any representation or warranty of Purchaser made herein shall be false, misleading, or incorrect in any material respect when made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.5 Purchaser takes an action, or any event or condition occurs or exists, which Sellers reasonably believe in good faith is inconsistent in any material respect with any provision of this Agreement, or impairs, or is likely to impair, the prospect of payment or performance by Purchaser of its obligations under this Agreement or any of the Transaction Documents.

8 - SIXTH AMENDED FORBEARANCEAGREEMENT

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u><u>Remedies.</u></u> Immediately upon the occurrence of a Forbearance Default, Sellers may pursue any and all of the remedies outlined below or elsewhere provided in this Agreement. No remedy granted herein to Sellers is intended to be exclusive of any other available remedy or remedies. Each and every remedy granted herein is cumulative and in addition to every other remedy given under this Agreement, now or hereafter existing at law or in equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1 The Forbearance Period shall immediately and automatically cease without notice or further action without notice to, or action by, any party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2 Sellers may, in Seller's sole discretion, enter the Confession of Judgment described in Section 3.l(b) as evidence of Sellers' rights as a secured creditor and proof of Purchaser's default under the Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3 Sellers shall be entitled to exercise any or all of their rights and remedies under the Transaction Documents, this Agreement, or any stipulations or other documents executed in connection with or related to this Agreement or any of the Transaction Documents, or applicable law, including, without limitation, the appointment of a receiver.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.4 Purchaser shall cooperate with Sellers' repossession of all of Purchaser's personal property Collateral, which Purchaser shall immediately surrender to Sellers upon Sellers' request, at the time and place designated by Sellers.

I0.5 Sellers may, in their sole discretion, commence foreclosure actions with respect to any real property Collateral and replevin actions with respect to any of the other Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.6 Sellers may set off or apply to the payment of any or all of the Obligations, any deposit balances, any or all of the Collateral or proceeds thereof, or other money now or hereafter owed Sellers by Purchaser.

Sellers may, in Sellers sole discretion, pursue any and all remedies provided ORS Chapter 79, including without limitation any and all self-help remedies therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. Foreclosure Rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1 Pursuant to Section 10.7 above, Purchasers agree that Sellers' foreclosure remedies include, but are not limited to a decree and 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;(a) granting Sellers immediate possession of the Collateral described above;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) rights and remedies of strict foreclosure of all 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;(c) ordering Purchasers to surrender the Collateral to Sellers within ten (10) days of the date of the Confession of Judgment or other judgment is entered;

9 - SIXTH AMENDED FORBEARANCEAGREEMENT

&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) authorizing Sellers to foreclose their security interests in the Collateral and:

● sell the same in a commercially reasonable manner as permitted by law and apply the proceeds of any sale of the Collateral to the satisfaction of the Confession of Judgment, including all lawful expenses of collection and sale, with any deficiency or surplus to be handled in accordance with applicable law, and/or

● in Sellers sole discretion retain, possess, and utilize the Collateral for the purposes of continuing its operations or business functions, including without limitation, assuming control of ongoing customer contracts, sales, vendor relationships, managing employees and other activities necessary to maintain business continuity, free and clear of any claim, lien, or right of redemption of the Purchasers and all persons claiming by, through, or under the Purchasers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.2 The Purchasers agree and acknowledge retention and continued use of the collateral by Sellers shall not constitute a breach of duty, nor be construed as a waiver of Sellers' rights under the Confession of Judgment or under applicable law. The Purchasers agree and aclmowledge that continuity of operations through retention or acquisition of the collateral is commercially reasonable, promotes mitigation of loss, and is in the interest of judicial efficiency and creditor recovery. The Purchasers agree that net income earned pursuant to business continuity operations shall be applied to the Confession of Judgment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.3 **No Obligation to Sell Collateral.** Sellers are under no obligation to sell the Collateral to satisfy the debt. Sellers may continue to operate the business in its current form, using the foreclosed assets to generate net revenue to repay the outstanding balance owed by Purchasers under the Confession of Judgment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.4 **Valuation of Foreclosed Collateral for Repayment.** In the event Purchaser elects to continue operations and the business in lieu of selling the Collateral, the value of the business may be determined by a qualified third-party appraiser appointed by the Sellers, provided that the selection of the appraiser is commercially reasonable. The appraiser shall establish the fair market value of the business, and its assets based on a forced liquidation value. This appraised value shall be applied towards the satisfaction of the debt owed by Purchasers. If the appraised value exceeds the amount owed, the debt shall be considered satisfied, and no further action shall be required by Purchasers. If the appraised value is less than the amount owed, Sellers may continue to operate the business and generate revenue from its operations whereupon net revenue shall be accepted in lieu of the balance of the debt. Purchasers' rights to any revenue, surplus, receipts or proceeds from business operations, including profits generated beyond the liquidation value, are hereby deemed to be fully and permanently extinguished.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.5 **Waiver of Revenue and Deficit.** In the event Purchaser elects to continue operations and the business in lieu of selling the Collateral, Sellers shall retain all revenue generated from the operation of the business beyond the appraised liquidation value of the assets. Purchasers shall have no claim or entitlement to any revenue generated by the business. In exchange for Purchasers waiver, Sellers agree to excuse any remaining deficit or shortfall between the liquidation value and the total amount of the Confession of Judgment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.6 **Optional Sale or Assignment of Business.** While Sellers are not required to sell the Collateral, they shall retain the option to sell all or a portion of the Collateral at their sole discretion. Any decision to sell or assign the business or its Collateral to a third party shall be entirely at the discretion of Sellers, but is not necessary for the satisfaction of the debt.

10 - SIXTH AMENDED FORBEARANCEAGREEMENT

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.7 **Optional Public Sale:** Iu the event Sellers chooses to sell all or a portion of the Collateral by public sale, which it has sole discretion to do, the Collateral will be sold pursuant to Article *9* of the Uniform Conunercial Code. The proceeds of a sale will be applied in the following order: the cost and expense of sale, and then toward the satisfaction of the debt plus costs, disbursements, and reasonable attorney fees as allowed Sellers by a court.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.8 From the day of any sale, strict foreclosure or other disposition of the collateral allowed by the APA, Security Agreements, Forbearance Agreements or the Confession of Judgment by Sellers all Purchasers are forever foreclosed of any and all right, title, lien, interest, or claim in or to the Assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u><u>Miscellaneous.</u></u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.1 <u><u>Additional Information.</u></u> Purchaser shall provide to Sellers such additional information regarding Purchaser as Sellers may reasonably request in order to assure or demonstrate compliance with applicable securities law or other laws or for any other legitimate purpose claims and losses arising out of or related to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.2 <u><u>Governing Law.</u></u> This Agreement is governed by the laws of the state of Oregon, without giving effect to any conflict-of-law principle that would result in the laws of any other jurisdiction governing this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3 <u><u>Attorney Fees.</u></u> If any suit or action is instituted arising out of or related to this Agreement, including but not limited to any proceeding brought under the United States Bankruptcy Code, the prevailing party on a claim will be entitled to recover with respect to the claim, in addition to any other relief awarded, the prevailing party's reasonable attorney's fees and other fees, costs, and expenses of every kind, including but not limited to the costs and disbursements specified in ORCP 68 A(2), incurred in connection with the arbitration, action, suit, or proceeding, any appeal or petition for review, the collection of any award, or the enforcement of any order, as determined by the arbitrator or court.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.4 <u><u>Survival.</u></u> The representations, warranties, covenants and agreements made herein shall survive the Forbearance Period for a period of 1 year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.5 <u><u>Successors and Assigns.</u></u> Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.6 <u><u>Entire Agreement; Amendment.</u></u> This Agreement, together with the exhibits and other documents delivered pursuant hereto, constitute the entire agreement between the parties with regard to the subject matter hereof. This Agreement or any term hereof may be amended, waived, discharged or terminated solely by a written instrument signed by the Sellers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.7 <u><u>Severability.</u></u> If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.8 <u><u>Titles and Subtitles.</u></u> The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

11 - SIXTH AMENDED FORBEARANCEAGREEMENT

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.9 <u><u>Expenses.</u></u> Purchaser shall pay all costs and expenses that it incurs with respect to the negotiation, execution, delivery and performance of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.10 <u><u>Interpretation.</u></u> The words "will" and "shall" have the same meaning in this Agreement. References in this Agreement to "includes" or "including" mean "including without limitation." The word "or" is not exclusive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.11 <u><u>Counterparts; Delivery.</u></u> This Agreement may be (a) executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument, and (b) delivered by transfer of an originally signed document by facsimile, e-mail or other electronic means, any of which will be as fully binding as delivery of an original document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.12 <u><u>Confidentiality.</u></u> Purchaser acknowledges that the information provided to it regarding the Sellers is confidential and non-public. Purchaser agrees that all of the information will be kept in confidence and will be neither used to its personal benefit nor disclosed to any third party, but this obligation does not apply to any such information that (a) is part of public knowledge on the date of this Agreement, (b) becomes a part of public knowledge by means other than a breach of this provision, or (c) is received from a third party who did not disclose such information in violation of any obligation of confidentiality he, she or it may have to Sellers.

[SIGNATURE PAGES TO FOLLOW]

12 - SIXTH AMENDED FORBEARANCEAGREEMENT

**IN WITNESS WHEREOF, THE PARTIES HERETO HAVE EXECUTED THIS AGREEMENT AS OF THE DATE FIRST ABOVE WRITTEN.**

---

| | | |
|:---|:---|:---|
| **SELLERS:** | KIRKMAN GROUP, INC. | KIRKMAN GROUP, INC. |
|  | By: | */s/ David K. Humphrey* |
|  | Name: | David K. Humphrey Title: President |

---

---

| | |
|:---|:---|
| KIRKMAN LABORATORIES, INC. | KIRKMAN LABORATORIES, INC. |
| By: | */s/ David K. Humphrey* |
| Name: | David K. Humphrey |
| Title: | President |

---

---

| | |
|:---|:---|
| KIRKMAN GROUP INTERNATIONAL, INC. | KIRKMAN GROUP INTERNATIONAL, INC. |
| By: | */s/ David K. Humphrey* |
| Name: | David K. Humphrey |
| Title: | President |

---

---

| | | |
|:---|:---|:---|
| **SELLERS' OWNER:** | DAVID K. HUMPHREY | DAVID K. HUMPHREY |
|  | By: | */s/ David K. Humphrey* |

---

---

| | | |
|:---|:---|:---|
| **SELLERS' AGENT:** | DAVID K. HUMPHREY | DAVID K. HUMPHREY |
|  | By: | */s/ David K. Humphrey* |

---

---

| | | |
|:---|:---|:---|
| **PURCHASER:** | **HTO NEVADA INC.** | **HTO NEVADA INC.** |
|  | By: | */s/ Eric Gripentrog* |
|  | Name: | Eric Gripentrog |
|  | Title: | Chief Executive Officer |

---

13 - SIXTH AMENDED FORBEARANCEAGREEMENT

---

| | | |
|:---|:---|:---|
| **HTO HOLDINGS INC.:** | HTO HOLDINGS INC. | HTO HOLDINGS INC. |
|  | By: | */s/ Eric Gripentrog* |
|  | Name: | Eric Gripentrog |
|  | Title: | Chief Executive Officer |

---

---

| | |
|:---|:---|
| FUNCTIONAL BRANDS INC: | FUNCTIONAL BRANDS INC: |
| By: | */s/ Eric Gripentrog* |
| Name: | Eric Gripentrog |
| Title: | Chief Executive Officer |

---

Hemptown Organics Corp. and Hemptown USA, LLC., as affiliated entities of Purchasers HTO Nevada, HTO Holdings and Functional Brands, hereby consent, approve and ratify this Sixth Amended Forbearance Agreement, and agree to be bound by the terms herein; and that sufficient consideration has been received in exchange for their agreement.

---

| | | |
|:---|:---|:---|
| **HEMPTOWN ORGANICS CORP.:** | HEMPTOWN ORGANICS CORP. | HEMPTOWN ORGANICS CORP. |
|  | By: | */s/ Eric Gripentrog* |
|  | Name: | Eric Gripentrog |
|  | Title: | Chief Executive Officer |

---

---

| | | |
|:---|:---|:---|
| **HEMPTOWN USA, LLC:** | HEMPTOWN USA, LLC | HEMPTOWN USA, LLC |
|  | By: | */s/ Eric Gripentrog* |
|  | Name: | Eric Gripentrog |
|  | Title: | Chief Executive Officer |

---

14 - SIXTH AMENDED FORBEARANCEAGREEMENT

## Exhibit 10.22

**Exhibit 10.22**

SEVENTH AMENDED FORBEARANCE AGREEMENT

This Seventh Amended Forbearance Agreement ("Agreement"), effective as of July 9, 2025, is made by and among HTO Nevada Inc. ("HTO Nevada"), HTO Holdings Inc. ("HTO Holdings"), and Functional Brands Inc., ("Functional Brands"), aka HT Naturals, Inc., a Delaware Corporation, ("Functional Brands"), jointly and severally ("Purchaser") and Kirkman Laboratories, Inc. ("Kirkman Lab"), Kirkman Group International, Inc. ("Kirkman International" and together with Kirkman Lab referred to as the "Kirkman Parties"), Kirkman Group, Inc. ("Kirkman Group" and together with the Kirkman Parties referred to as "Sellers"), and David K. Humphrey ("Humphrey") and collectively with Purchaser and the Sellers as the "Parties" or individually as a "Party").

RECITALS

WHEREAS, the Parties entered into that certain Asset Purchase Agreement dated as of June 28, 2019 (the "Original Asset Purchase Agreement), that certain Amendment No. 1 to the Asset Purchase Agreement dated November 30, 2021 (the "First Amendment"), and that certain Amendment No. 2 to the Asset Purchase Agreement dated May 16, 2022 (the "Second Amendment"), Amendment No. 3 to APA dated August 1, 2024, Amendment No. 4 dated September 24, 2024; (the Original Asset Purchase Agreement, First Amendment, Second Amendment, Third Amendment, Fourth Amendment collectively, the "Asset Purchase Agreement"), and various associated agreements (the "Collateral Agreements"), in which, among other things, Sellers sold to Purchaser various assets, including certain Intangible Assets including Intellectual Property;

WHEREAS, under the Original Asset Purchase Agreement, Purchaser and HTO Holdings Inc. were to make certain payments toward the purchase price set forth in the Asset Purchase Agreement;

WHEREAS, under the First Amendment, the Parties agreed to amend the Asset Purchase Agreement's payment schedule;

WHEREAS, under the Second Amendment, the Parties made corrections to the schedules and exhibits to the Asset Purchase Agreement and the Collateral Agreements listing and relating to the Intellectual Property;

WHEREAS, under the Third Amendment, the Parties made corrections to the schedules and exhibits to the Asset Purchase Agreement and the Collateral Agreements listing and relating to the Intellectual Property;

WHEREAS, under the Fourth Amendment, the Parties made corrections to the schedules and exhibits to the Asset Purchase Agreement and the Collateral Agreements listing and relating to the Intellectual Property;

WHEREAS, under a Letter Agreement dated May 31, 2022, Purchaser has paid Purity Labs, Inc. the total sum of $100,000 (the "Purity Payment") and has Humphrey the total sum of $250,000 (the "Humphrey Payment", and together with the Purity Payment, the "Immediate Payments");

WHEREAS, the Parties executed a Forbearance Agreement (the "Forbearance Agreement") extending the payment due under the Asset Purchase Agreement to August 31, 2022.

WHEREAS, Purchaser is in default of the August 31, 2022 payment due under the Forbearance Agreement and (the "Obligations");

WHEREAS, Purchaser has paid Sellers $65,000 due under the Asset Purchase Agreement in September 2022.

WHEREAS, the Parties executed a First Amended Forbearance Agreement on or about December 27, 2022, under which Purchaser has made the following payments: $250,000 and $15,000 interest per month for each month between September and December 2023, inclusive, and a $7,500 payment in January 2024;

WHEREAS, HTO Nevada Inc. was acquired by Functional Brands Inc. on or about May 19, 2023, as part of a corporate restructuring; and, is now a wholly owned subsidiary of Functional Brands Inc. In this transaction, HTO Holdings Inc. transferred all outstanding shares of HTO Nevada Inc. to Functional Brands Inc. a wholly owned subsidiary.

WHEREAS, the Parties executed a Second Amended Forbearance Agreement on or about March 1, 2024, under which the Purchaser has made the following payments: $130,000 and $20,000 per month ($15,000 interest and $5,000 principal) for each month beginning March 2024 through July 2024;

WHEREAS, the Parties executed a Third Amended Forbearance Agreement on or about August 1, 2024, under which the Purchaser has made the following payments: $20,000 per month ($15,000 interest and $5,000 principal) for each month beginning August 2024 through September 2024; and an additional $20,000 principal payments in August.

WHEREAS, the Parties executed a Fourth Amended Forbearance Agreement on or about September 24, 2024, under which the Purchaser has made the following payments: $20,000 per month ($15,000 interest and $5,000 principal) for each month beginning October 1, 2024 through December 31, 2024; and an additional $20,000 principal payments in October, November and December, 2024.

WHEREAS, the Parties executed a Fifth Amended Forbearance Agreement on or about December 31, 2024, under which the Purchaser has made the following payments: $20,000 per month ($15,000 interest and $5,000 principal) for January and February 2025.

WHEREAS, the Parties informally extended the Fifth Amended Forbearance Agreement providing for payments of $50,000 on or about March 5, 2025 and $50,000 on or about April 1, 2025 and $50,000 on or about May 1, 2025.

WHEREAS, the Parties extended the Sixth Amended Forbearance Agreement providing for payments of$30,000 on or about June 1, 2025 and $30,000 on or about July 1, 2025.

WHEREAS, the balance due as of the date of this Seventh Amended Forbearance Agreement is $2,227,366.00.

WHEREAS, Purchaser and HTO Holdings have requested Sellers to forbear from exercising their rights and remedies under the Asset Purchase Agreement and Forbearance Agreement; and

WHEREAS, Sellers are willing to forbear from exercising such rights and remedies for a limited period of time, provided that Purchaser and HTO Holdings complies with the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants, terms, and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Purchaser Acknowledgments.</u> Purchaser acknowledges and agrees that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 <u>Recitals.</u> The above recitals are true and correct.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2 <u>Transaction Documents.</u> The Asset Purchase Agreement, Collateral Agreements, Forbearance Agreement, and all other agreements, instruments, and other documents executed in connection with or relating to the Asset Purchase Agreement (the "Transaction Documents") are legal, valid, binding, and enforceable against Purchaser in accordance with their terms. Except as otherwise set forth herein, the terms of the Transaction Documents remain unchanged. Undefined capitalized terms used herein shall have the meanings ascribed thereto in the Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3 <u>Default.</u> The following Event of Default has occurred and is continuing under the Transaction Documents:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Failure to make timely payments due under the Asset Purchase Agreement, the amendments thereto and subsequent Forbearance Agreements or payment in full, with a remaining balance due under the Asset Purchase Agreement and the Fifth Forbearance Agreement of $2,297,366.00 (the "Existing Default").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.4 <u>Obligations.</u> The Obligations are not subject to any setoff, deduction, claim, counterclaim, or defenses of any kind or character whatsoever.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.5 <u>Collateral.</u> Purchaser represents that Sellers have valid, enforceable, and first position, perfected security interests in and to and liens under the Collateral Agreements, as to which there are no setoffs, deductions, claims, counterclaims, or defenses of any kind or character whatsoever.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Consistent with that letter agreement dated May 31, 2022, Purchaser acknowledges and agrees that Sellers have had and continue to retain a security interest in and to all of Purchasers respective assets, including but not limited to any machinery, equipment, furniture, furnishings, tools, fixtures, parts, accessories, accounts, inventory, raw materials, work-in-progress, finished goods, cash, deposit accounts, investments, investment accounts, leasehold interests, permits, licenses, intellectual property, patents, patent applications, trademarks, service marks, copyrights, trade secrets, domain names, software, any other intellectual property rights, contracts, contract rights, rights under purchase orders, instruments, chattel paper, notes, drafts, any obligations for the payment of money arising out of the sale or lease of goods, any and all after acquired assets and any and all proceeds derived from the assets. Functional Brands Inc. acknowledges and agrees that pursuant to its purchase of all outstanding shares of HTO Nevada, Inc., that it acquired HTO Nevada, Inc. subject to Seller's security interest. To the extent necessary, Purchaser, jointly and severally, hereby grant Sellers a security interest in any and all collateral and assets set forth above and elsewhere in the Original Asset Purchase Agreement, Collateral Agreements, any and all Forbearance Agreements and this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Purchaser further hereby grants Sellers a "lien" on Purchaser's accounts receivable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.6 <u>No Waiver of Default.</u> Neither this Agreement, nor any actions taken in accordance with this Agreement or the Transaction Documents, shall be construed as a waiver of or consent to the Existing Default or any other existing or future defaults under the Transaction Documents, as to which Sellers' rights shall remain reserved.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.7 <u>Preservation of Rights and Remedies.</u> Upon expiration of the Forbearance Period (as defined below), all of Sellers' rights and remedies under the Transaction Documents and at law and in equity shall be available without restriction or modification, as if the forbearance had not occurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.8 <u>Purpose of Forbearance.</u> The purpose of this Agreement is to provide Purchaser with a period of time to cure the Existing Default.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.9 <u>Request to Forbear.</u> Purchaser has requested Sellers' forbearance as provided herein, which shall inure to their direct and substantial benefit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Sellers Forbearance.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 <u>Forbearance Period.</u> Subject to compliance by Purchaser with the terms and conditions of this Agreement, Sellers hereby agree to forbear from exercising their rights and remedies against Purchaser under the Transaction Documents with respect to the Existing Default during the period (the "Forbearance Period") commencing on the Effective Date (as defined below) and ending on the earlier to occur of (i) August 20, 2025 that will grant a 11 day cure that makes the effective date August 30, 2025 and (ii) the date that any Forbearance Default (as defined below) occurs, upon which, Sellers' forbearance, as provided herein, shall immediately and automatically cease without any requirement of notice or further action by any party (the "Termination Date"). On and from the Termination Date, Sellers may, in their sole discretion, exercise any and all remedies available to them under the Transaction Documents that otherwise would be available only by reason of the occurrence of any Events of Default thereunder or the continuation of any Existing Default.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 <u>Extension of Forbearance Period.</u> In the sole and absolute discretion of Sellers and without obligation, after the Termination Date, Sellers may renew or extend the Forbearance Period, or grant additional forbearance periods.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 <u>Scope of Forbearance.</u> During the Forbearance Period only, Sellers will not (i) accelerate the maturity of the Obligations or initiate proceedings to collect the Obligations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) initiate or join in filing any involuntary bankruptcy petition with respect to Purchaser under the Bankruptcy Code, or otherwise file or participate in any insolvency, reorganization, moratorium, receivership, or other similar proceedings against Purchaser under the laws of the US; or (iii) repossess or dispose of any of the Collateral, through judicial proceedings or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Conditions Precedent.</u> This Agreement shall not become effective unless and until the date (the "Effective Date") that each of the following conditions shall have been satisfied in Sellers' sole and absolute discretion, unless waived in writing by Sellers:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 <u>Delivery of Certain Documents.</u> Purchaser shall deliver or cause to be delivered the following documents, each in substance and form acceptable to Sellers:

&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 copy of this Agreement, duly executed by 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;(b) an updated Confession of Judgment executed by Purchaser, in the form attached hereto and incorporated herein by this reference as Appendix 3.I; 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) such other documents as Sellers may request with respect to any matter relevant to this Agreement or the transactions contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Payments During Forbearance Period.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 <u>Interest-Only Payments.</u> Purchaser has already paid a $15,000 interest payment for February 2024 and March 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 <u>Payments of Interest and Principal.</u> Purchaser has already made payments of $20,000 per month, due the first day of each of April, May, June, July, August, September 2024, with $15,000 of each payment allocated to interest and the remaining $5,000 of each payment allocated to principal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 <u>Payments of Interest and Principal.</u> Purchaser has also made payments of $20,000 per month for October, November and December, 2024, with $15,000 of each payment allocated to interest and the remaining $5,000 of each payment allocated to principal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 <u>Additional Payments.</u> Purchaser has already made a principal payment of $130,000 against the remaining balance over the course of 3 payments. First payment occurred on March 15, 2024 of $45,000, and subsequent payments occurred for $40,000 on April 15, 2024 and $45,000 on May 15, 2024 to satisfy the $130,000 principle payment. Purchaser made another $20,000 payment towards principal on August 15, 2024, October 15, 2024, November 15, 2024 and December 15, 2024

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5 <u>Additional Principal & Interest Payment:</u> The Purchaser has also made payments of $20,000 payment for January and February 2025, with $15,000 of each payment allocated to interest and the remaining $5,000 of each payment allocated to principal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6 The Purchaser has made payments of $50,000 on March 5, 2025, $50,000 on April 1, 2025 and $50,000 on May 1, 2025, with $15,000 of each payment allocated to interest and the remaining $35,000 of each payment allocated to principal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7 The Purchaser has made payments in the amounts of $30,000 on or about June 1, 2025, and $30,000 payment on or about July 1, 2025. $30,000 of each payment was designated as an interest only payment, and none to principal, regardless of rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.8 The purchaser will make a payment of $30,000 on or about August 1, 2025 and this payment will be designated as interest only payment, and zero amount to principal, regardless of rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.9 <u>Balance Due Payment.</u> As of July 1, 2025, the balance due and owing is $2,227,366.00. The Purchaser shall pay Seller $2,227,366.00 by wire transfer on or before August 30, 2025, before any additional principal payments or on the date the Purchaser closes any borrowing transaction, whichever occurs sooner (the "Balance Due Payment"). The Purchaser's payment of the Balance Due Payment under this Agreement shall fully satisfy the Obligations and cure the Existing Default. Payment of the Balance Due Payment shall not act as a cure to any other default whether known or unknown at the time of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.10 Time is of the Essence as to all payments due and owing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Representations and Warranties.</u> Purchaser represents and warrants as to itself that all representations and warranties relating to it contained in the Transaction Documents are true and correct as of the Effective Date, except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date. Purchaser further represents and warrants to Sellers as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 <u>Authorization</u>. The execution, delivery, and performance of this Agreement are within its corporate power and have been duly authorized by all necessary corporate action.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 <u>Enforceability</u>. This Agreement constitutes a valid and legally binding Agreement enforceable against Purchaser in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, and similar laws affecting creditors' rights generally and to general principles of equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 <u>No Violation.</u> The execution, delivery, and performance of this Agreement do not and will not (i) violate any law, regulation, or court order to which Purchaser is subject; (ii) conflict with Purchaser's organizational documents; or (iii) result in the creation or imposition of any lien, security interest, or encumbrance on any property of Purchaser, or any of its subsidiaries, whether now owned or hereafter acquired, other than liens in favor of Sellers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4 <u>No Litigation.</u> No action, suit, litigation, investigation, or proceeding of or before any arbitrator or governmental authority is pending or, to the knowledge of Purchaser, threatened by or against or affecting Purchaser or against any of its property or assets with respect to any of the Transaction Documents or any of the transactions contemplated hereby or thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5 <u>No Change.</u> Except as previously disclosed to Sellers, there has been no material adverse change in the business, operations, assets, or financial or other condition of the Purchaser and its subsidiaries taken as a whole.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6 <u>Accuracy of Information.</u> All information provided by Purchaser or any of its agents, is true, correct, and complete in all material respects, as of the date provided and does not contain any untrue statements of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7 <u>Advice of Counsel.</u> Purchaser has freely and voluntarily entered into this Agreement with the advice of legal counsel of its choosing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Covenants.</u> In addition, in order to induce Sellers to forbear from the exercise of their rights and remedies as set forth above, Purchaser hereby covenants and agrees that at all times during the Forbearance Period, unless Sellers otherwise consent in writing, as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 <u>Compliance with Transaction Documents.</u> Purchaser shall continue to perform and observe all covenants, terms, and conditions, and other obligations contained in all of the Transaction Documents and this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 <u>Sale of Assets.</u> Purchaser shall not sell, convey, transfer, assign, lease, abandon, or otherwise dispose of any of its assets, tangible or intangible (including but not limited to sale, assignment, discount, or other disposition of accounts, contract rights, or general intangibles with or without recourse), without Sellers' prior written consent. If Sellers grant written consent, Purchaser shall cause Purchaser or other transferee to pay all proceeds of such disposition directly to Sellers for application to the Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 <u>Perfection of Sellers' Liens.</u> Purchaser shall execute and deliver to Sellers such documents and take such actions as Sellers reasonably deem necessary or advisable to perfect or protect the Sellers' security interests, mortgages, or liens granted by Purchaser to Sellers under any of the Transaction Documents or this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4 <u>Other Financial Information.</u> Purchaser shall promptly provide to Sellers such other financial information as Sellers may reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5 <u>Further Assurances.</u> Promptly upon the request of Sellers, Purchaser shall take any and all reasonable actions, and execute and deliver additional documents, that relate to this Agreement and the transactions contemplated herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Release of Claims and Waiver of Defenses.</u> In further consideration of Sellers' execution of this Agreement, Purchaser, on behalf of itself and its successors, assigns, parents, subsidiaries, affiliates, officers, directors, employees, agents, and attorneys hereby forever, fully, unconditionally and irrevocably waives and releases Sellers and their successors, assigns, parents, subsidiaries, affiliates, officers, directors, employees, attorneys, and agents (collectively, the "Releasees") from any and all claims, liabilities, obligations, debts, causes of action (whether at law or in equity or otherwise), defenses, counterclaims, setoffs, of any kind, whether known or unknown, whether liquidated or unliquidated, matured or unmatured, fixed or contingent, directly or indirectly arising out of, connected with, resulting from, or related to any act or omission by any Sellers or any other Releasee with respect to the Transaction Documents and any Collateral, other than any Sellers' or any Releasee's willful acts or omissions, on or before the date of this Agreement (collectively, the "Claims"). Purchaser further agrees that Purchaser shall not commence, institute, or prosecute any lawsuit, action, or other proceeding, whether judicial, administrative, or otherwise, to collect or enforce any Claim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Indemnification</u>. Purchaser hereby expressly acknowledges, agrees, and reaffirms its indemnification obligations to Sellers and the other Indemnified Parties set forth in the Transaction Documents. Purchaser further acknowledges, agrees, and reaffirms that all such indemnification obligations shall survive the expiration of the Forbearance Period and the termination of this Agreement, the Transaction Documents, and the payment in full of the Obligations. Notwithstanding the foregoing, such indemnity shall not be available to the extent that such claims, damages, losses, liabilities, or related expenses result solely from a Lender's or other Indemnified Party's gross negligence or willful misconduct.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Events of Default.</u> The occurrence of one or more of the following shall constitute a "Forbearance Default" under this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1 Purchaser shall fail to abide by or observe any term, condition, covenant, or other provision contained in this Agreement or any document related to or executed in connection with this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2 A default or event of default shall occur under any Transaction Document or any document related to or executed in connection with this Agreement or any of the Transaction Documents (other than the Existing Default).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3 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;(a) becomes insolvent;

&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) is generally not, or is unable to, or admits in writing its inability to, pay its debts as they become due;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) (i) commences any case, proceeding, or other action under any existing or future requirement of law relating to bankruptcy, insolvency, reorganization, or other relief of debtors, seeking (A) to have an order for relief entered with respect to it, or (B) to adjudicate it as bankrupt or insolvent, or (C) reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition, or other relief with respect to it or its debts, or (D) appointment of a receiver, trustee, custodian, conservator, or other similar official for it or for all or any substantial part of its assets, or (ii) makes a general assignment for the benefit of its creditors;

&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) has commenced against it in a court of competent jurisdiction any case, proceeding, or other action of a nature referred to in clause (c) above which (i) results in the entry of an order for relief or any such adjudication or appointment or (ii) remains undismissed, undischarged, unstayed, or unbonded for 30 days; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) ceases to conduct business in the ordinary course.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4 Any representation or warranty of Purchaser made herein shall be false, misleading, or incorrect in any material respect when made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.5 Purchaser takes an action, or any event or condition occurs or exists, which Sellers reasonably believe in good faith is inconsistent in any material respect with any provision of this Agreement, or impairs, or is likely to impair, the prospect of payment or performance by Purchaser of its obligations under this Agreement or any of the Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>Remedies.</u> Immediately upon the occurrence of a Forbearance Default, Sellers may pursue any and all of the remedies outlined below or elsewhere provided in this Agreement. No remedy granted herein to Sellers is intended to be exclusive of any other available remedy or remedies. Each and every remedy granted herein is cumulative and in addition to every other remedy given under this Agreement, now or hereafter existing at law or in equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1 The Forbearance Period shall immediately and automatically cease without notice or further action without notice to, or action by, any party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2 Sellers may, in Seller's sole discretion, enter the Confession of Judgment described in Section 3.1(b) as evidence of Sellers' rights as a secured creditor and proof of Purchaser's default under the Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3 Sellers shall be entitled to exercise any or all of their rights and remedies under the Transaction Documents, this Agreement, or any stipulations or other documents executed in connection with or related to this Agreement or any of the Transaction Documents, or applicable law, including, without limitation, the appointment of a receiver.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.4 Purchaser shall cooperate with Sellers' repossession of all of Purchaser's personal property Collateral, which Purchaser shall immediately surrender to Sellers upon Sellers' request, at the time and place designated by Sellers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.5 Sellers may, in their sole discretion, commence foreclosure actions with respect to any real property Collateral and replevin actions with respect to any of the other Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.6 Sellers may set off or apply to the payment of any or all of the Obligations, any deposit balances, any or all of the Collateral or proceeds thereof, or other money now or hereafter owed Sellers by Purchaser.

Sellers may, in Sellers sole discretion, pursue any and all remedies provided ORS Chapter 79, including without limitation any and all self-help remedies therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. Foreclosure Rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1 Pursuant to Section 10.7 above, Purchasers agree that Sellers' foreclosure remedies include, but are not limited to a decree and 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;(a) granting Sellers immediate possession of the Collateral described above;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) rights and remedies of strict foreclosure of all 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;(c) ordering Purchasers to surrender the Collateral to Sellers within ten (10) days of the date of the Confession of Judgment or other judgment is entered;

&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) authorizing Sellers to foreclose their security interests in the Collateral and:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● sell the same in a commercially reasonable manner as permitted by law and apply the proceeds of any sale of the Collateral to the satisfaction of the Confession of Judgment, including all lawful expenses of collection and sale, with any deficiency or surplus to be handled in accordance with applicable law, and/or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● in Sellers sole discretion retain, possess, and utilize the Collateral for the purposes of continuing its operations or business functions, including without limitation, assuming control of ongoing customer contracts, sales, vendor relationships, managing employees and other activities necessary to maintain business continuity, free and clear of any claim, lien, or right of redemption of the Purchasers and all persons claiming by, through, or under the Purchasers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.2 The Purchasers agree and acknowledge retention and continued use of the collateral by Sellers shall not constitute a breach of duty, nor be construed as a waiver of Sellers' rights under the Confession of Judgment or under applicable law. The Purchasers agree and acknowledge that continuity of operations through retention or acquisition of the collateral is commercially reasonable, promotes mitigation of loss, and is in the interest of judicial efficiency and creditor recovery. The Purchasers agree that net income earned pursuant to business continuity operations shall be applied to the Confession of Judgment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.3 No Obligation to Sell Collateral. Sellers are under no obligation to sell the Collateral to satisfy the debt. Sellers may continue to operate the business in its current form, using the foreclosed assets to generate net revenue to repay the outstanding balance owed by Purchasers under the Confession of Judgment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.4 Valuation of Foreclosed Collateral for Repayment. In the event Purchaser elects to continue operations and the business in lieu of selling the Collateral, the value of the business may be determined by a qualified third-party appraiser appointed by the Sellers, provided that the selection of the appraiser is commercially reasonable. The appraiser shall establish the fair market value of the business, and its assets based on a forced liquidation value. This appraised value shall be applied towards the satisfaction of the debt owed by Purchasers. If the appraised value exceeds the amount owed, the debt shall be considered satisfied, and no further action shall be required by Purchasers. If the appraised value is less than the amount owed, Sellers may continue to operate the business and generate revenue from its operations whereupon net revenue shall be accepted in lieu of the balance of the debt. Purchasers' rights to any revenue, surplus, receipts or proceeds from business operations, including profits generated beyond the liquidation value, are hereby deemed to be fully and permanently extinguished.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.5 Waiver of Revenue and Deficit. In the event Purchaser elects to continue operations and the business in lieu of selling the Collateral, Sellers shall retain all revenue generated from the operation of the business beyond the appraised liquidation value of the assets. Purchasers shall have no claim or entitlement to any revenue generated by the business. In exchange for Purchasers waiver, Sellers agree to excuse any remaining deficit or shortfall between the liquidation value and the total amount of the Confession of Judgment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.6 Optional Sale or Assignment of Business. While Sellers are not required to sell the Collateral, they shall retain the option to sell all or a portion of the Collateral at their sole discretion. Any decision to sell or assign the business or its Collateral to a third party shall be entirely at the discretion of Sellers, but is not necessary for the satisfaction of the debt.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.7 Optional Public Sale: In the event Sellers chooses to sell all or a portion of the Collateral by public sale, which it has sole discretion to do, the Collateral will be sold pursuant to Article 9 of the Uniform Commercial Code. The proceeds of a sale will be applied in the following order: the cost and expense of sale, and then toward the satisfaction of the debt plus costs, disbursements, and reasonable attorney fees as allowed Sellers by a court.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.8 From the day of any sale, strict foreclosure or other disposition of the collateral allowed by the APA, Security Agreements, Forbearance Agreements or the Confession of Judgment by Sellers all Purchasers are forever foreclosed of any and all right, title, lien, interest, or claim in or to the Assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.1 <u>Additional Information.</u> Purchaser shall provide to Sellers such additional information regarding Purchaser as Sellers may reasonably request in order to assure or demonstrate compliance with applicable securities law or other laws or for any other legitimate purpose claims and losses arising out of or related to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.2 <u>Governing Law.</u> This Agreement is governed by the laws of the state of Oregon, without giving effect to any conflict-of-law principle that would result in the laws of any other jurisdiction governing this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3 <u>Attorney Fees.</u> If any suit or action is instituted arising out of or related to this Agreement, including but not limited to any proceeding brought under the United States Bankruptcy Code, the prevailing party on a claim will be entitled to recover with respect to the claim, in addition to any other relief awarded, the prevailing party's reasonable attorney's fees and other fees, costs, and expenses of every kind, including but not limited to the costs and disbursements specified in ORCP 68 A(2), incurred in connection with the arbitration, action, suit, or proceeding, any appeal or petition for review, the collection of any award, or the enforcement of any order, as determined by the arbitrator or court.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.4 <u>Survival.</u> The representations, warranties, covenants and agreements made herein shall survive the Forbearance Period for a period of I year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.5 <u>Successors and Assigns.</u> Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.6 <u>Entire Agreement; Amendment.</u> This Agreement, together with the exhibits and other documents delivered pursuant hereto, constitute the entire agreement between the parties with regard to the subject matter hereof. This Agreement or any term hereof may be amended, waived, discharged or terminated solely by a written instrument signed by the Sellers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.7 <u>Severability.</u> If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.8 <u>Titles and Subtitles.</u> The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.9 <u>Expenses.</u> Purchaser shall pay all costs and expenses that it incurs with respect to the negotiation, execution, delivery and performance of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.10 <u>Interpretation.</u> The words "will" and "shall" have the same meaning in this Agreement. References in this Agreement to "includes" or "including" mean "including without limitation." The word "or" is not exclusive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.11 <u>Counterparts; Delivery.</u> This Agreement may be (a) executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument, and (b) delivered by transfer of an originally signed document by facsimile, e-mail or other electronic means, any of which will be as fully binding as delivery of an original document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.12 <u>Confidentiality</u>. Purchaser acknowledges that the information provided to it regarding the Sellers is confidential and non-public. Purchaser agrees that all of the information will be kept in confidence and will be neither used to its personal benefit nor disclosed to any third party, but this obligation does not apply to any such information that

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) is part of public knowledge on the date of this Agreement, (b) becomes a part of public knowledge by means other than a breach of this provision, or (c) is received from a third party who did not disclose such information in violation of any obligation of confidentiality he, she or it may have to Sellers.

[SIGNATURE PAGES TO FOLLOW]

IN WITNESS WHEREOF, THE PARTIES HERETO HAVE EXECUTED THIS AGREEMENT AS OF THE DATE FIRST ABOVE WRITTEN.

SELLERS: KIRKMAN GROUP, INC.

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|:---|:---|
| By: | */s/ David K. Humphrey* |
| Name: | David K. Humphrey |
| Title: | President |

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KIRKMAN LABORATORIES, INC.

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| | |
|:---|:---|
| By: | */s/ David K. Humphrey* |
| Name: | David K. Humphrey |
| Title: | President |

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KIRKMAN GROUP INTERNATIONAL, INC.

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| | |
|:---|:---|
| By: | */s/ David K. Humphrey* |
| Name: | David K. Humphrey |
| Title: | President |

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SELLERS' OWNER: DAVID K. HUMPHREY

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| | |
|:---|:---|
| By: | */s/ David K. Humphrey* |

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SELLERS' AGENT: DAVID K. HUMPHREY

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| | |
|:---|:---|
| By: | */s/ David K. Humphrey* |

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PURCHASER: HTO NEVADA INC.

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| | |
|:---|:---|
| By: | */s/ Eric Gripentrog* |
| Name: | Eric Gripentrog |
| Title: | Chief Executive Officer |

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HTO HOLDINGS INC.: HTO HOLDINGS INC.

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| | |
|:---|:---|
| By: | */s/ Eric Gripentrog* |
| Name: | Eric Gripentrog |
| Title: | Chief Executive Officer |

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FUNCTIONAL BRANDS INC.: FUNCTIONAL BRANDS INC.

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| | |
|:---|:---|
| By: | */s/ Eric Gripentrog* |
| Name: | Eric Gripentrog |
| Title: | Chief Executive Officer |

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Hemptown Organics Corp. and Hemptown USA, LLC., as affiliated entities of Purchasers HTO Nevada, HTO Holdings and Functional Brands, hereby consent, approve and ratify this Seventh Amended Forbearance Agreement, and agree to be bound by the terms herein; and that sufficient consideration has been received in exchange for their agreement.

HEMPTOWN ORGANICS CORP.: HEMPTOWN ORGANICS CORP.

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| | |
|:---|:---|
| By: | */s/ Eric Gripentrog* |
| Name: | Eric Gripentrog |
| Title: | Chief Executive Officer |

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HEMPTOWN USA, LLC: HEMPTOWN USA, LLC

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| | |
|:---|:---|
| By: | */s/ Eric Gripentrog* |
| Name: | Eric Gripentrog |
| Title: | Chief Executive Officer |

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## Exhibit 10.26

**Exhibit 10.26**

**ESCROW AGREEMENT**

**THIS ESCROW AGREEMENT** is made and entered into as of the 6th day of August 2025, by and among Functional Brands Inc., a Delaware corporation (the "**Company**"), Joseph Gunnar & Co, LLC, a Delaware limited liability company ("**Joseph Gunnar**"), and Odyssey Transfer and Trust Company, a Minnesota corporation (the "**Escrow Agent**").

**WHEREAS,** the Company intends to privately offer (the "**Placement**") the sale of Series A convertible preferred shares, par value $0.00001 per share, and Series B convertible preferred shares, par value $0.00001 per share, of the Company, (collectively, the "**Securities**");

**WHEREAS**, it has been determined that the proceeds to be received from the Placement should be placed in escrow and distributed by the Escrow Agent on the terms and conditions set forth herein;

**WHEREAS**, the Company wishes to appoint the Escrow Agent to act as escrow agent in connection with the Placement;

**WHEREAS**, the Escrow Agent is willing to accept appointment as escrow agent for only the expressed duties, terms and conditions outlined herein; and

Whereas, the foregoing recitals are representations and statements of fact made by the Company and Joseph Gunnar (collectively the "**Parties**") and not by the Escrow Agent.

**NOW, THEREFORE**, in consideration of the premises and agreements set forth herein, the parties hereto agree as follows:

1.  **<u>Appointment of Escrow Agent.</u>** The Company appoints the Escrow Agent to act, and the Escrow
Agent agrees to act, as escrow agent in accordance with the terms and conditions of this Agreement. Subject to receipt of the monies which
are to become the Escrow Funds, the Escrow Agent agrees to hold and deal with the Escrow Funds in accordance with the terms and conditions
of this Agreement.

2.  **<u>Proceeds to be Escrowed.</u>** Following the execution and delivery of this Agreement, all funds
received from investors prior to the closing of the Placement in payment for the Securities will be deposited with the Escrow Agent and
shall be retained in a non-interest bearing escrow account by the Escrow Agent (the "**Escrow Funds**") at Truist Bank
(" **Approved Bank** "). The Escrow Agent agrees to hold, safeguard, and disburse the Escrow Funds pursuant to the terms

In the event any checks or wire transfers are inadvertently sent to the Company or Joseph Gunnar, the Company or Joseph Gunnar shall promptly
transmit such funds to the Escrow Agent. Neither the Escrow Agent, nor any officers, directors, employees, agents, representatives, attorneys,
successors or assigns of the Escrow Agent, shall have any responsibility or liability for any diminution in value of the Escrow Funds
(which may result from deposits made pursuant to this Section 3 or otherwise) or any other assets held hereunder, except in the case of
gross negligence or willful misconduct of the Escrow Agent. Furthermore, the Parties acknowledge and agree that the Escrow Agent acts
prudently in depositing the Escrow Funds at the Approved Bank and that the Escrow Agent is not required to make any further inquiries
in respect of any such bank. Furthermore, the Parties understand and acknowledge that FDIC insurance coverage will not be available for
the entire amount of the Escrow Funds deposited in the Escrow Agent's demand deposits or money market deposit accounts and that
such funds not covered by FDIC insurance will not otherwise be collateralized.

3.  **<u>Investors.</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. All proceeds deposited shall remain the property of the respective investors and shall not be subject
to any liens or charges by the Company, the Escrow Agent, or judgments or creditors' claims against the Company, until released
to the Company as hereinafter provided. The Escrow Agent will not use or disclose the information provided to it by the Company or Joseph
Gunnar for any purpose other than to fulfill its obligations as Escrow Agent as set forth in this Agreement. Regardless, the Escrow Agent
will treat this information as confidential.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Notwithstanding anything set out in this Agreement, it is understood that the Company will require each
Investor to complete its prescribed Anti-Money Laundering ()"**AML**") procedures as required under the Bank Secrecy Act
and the Financial Industry Regulatory Authority ()"**FINRA**") Rule 3310 before the Escrow Agent will accept a deposit into
the escrow account. The Company will not allow an Investor to make a deposit into the Escrow Fund if the Investor has not been approved
under the Company's AML procedures.

4.  **<u>Disbursement of Funds.</u>** From time to time, upon the Company or Joseph Gunnar's request,
and at the end of the third business day following the Termination Date (as defined in Section 5 hereof), the Escrow Agent shall notify
the Company or Joseph Gunnar of the amount of investors' funds received hereunder. Upon receipt of an irrevocable written direction
from the Company and Joseph Gunnar ()"**Joint Direction** "), substantially in the form attached hereto as Schedule 'II',
the Escrow Agent shall pay out the Escrow Funds when and as jointly directed by the Company and Joseph Gunnar. If the Placement has not
closed prior to the Termination Date, the Escrow Agent shall, upon receipt of a Joint Direction, refund to each of the investors to the
accounts from which sums have been received, all sums paid by such investor for the Securities. The Escrow Agent is authorized to seek
confirmation of the disbursement payment instructions by telephone callback to the person or persons designated on Schedule 1 hereto,
and the Escrow Agent may rely upon the confirmation of anyone purporting to be the person or persons so designated. The persons and telephone
numbers for callbacks may be changed only in writing actually received and acknowledged by the Escrow Agent. If the Escrow Agent is unable
to contact any of the authorized representatives identified in Schedule 1, the Escrow Agent is hereby authorized both to receive written
instructions from and seek confirmation of such instructions by officers and the respective legal counsels of the Parties, as the case
may be, which shall include the titles of Chief Executive Officer, General Counsel, Chief Financial Officer, President, or other such
officer as the Escrow Agent may select. Such officer or legal counsel to either of the Parties shall deliver to the Escrow Agent a fully
executed incumbency certificate, and the Escrow Agent may rely upon the confirmation of anyone purporting to be any such officer or legal
counsel to either of the Parties.

5.  **<u>Term of Escrow.</u>** The "**Termination Date**" shall be the earlier of [●] (subject to extension by joint written notice from the Company and Joseph Gunnar); or (ii) the date the Escrow Agent receives joint written notice from the Company and Joseph Gunnar that they are abandoning the sale of the Securities, subject to Section 4. In all events this Agreement shall terminate upon the one-year anniversary from the date hereof.

6.  **<u>Duty and Liability of the Escrow Agent.</u>** The Escrow Agent shall have only those duties as
are specifically provided herein, which shall be deemed purely administerial in nature, and shall under no circumstance be deemed a trustee
or fiduciary for any of the Parties to this Agreement nor to the Subscribers. The sole duty of the Escrow Agent, other than as herein
specified, shall be to receive escrowed funds and hold them subject to release, in accordance herewith, and the Escrow Agent shall be
under no duty to determine whether the Company is complying with requirements of this Agreement in depositing, or causing the deposit
of funds from Subscribers to the Escrow Agent in connection with the sale of the Securities. The Escrow Agent may conclusively rely upon
and shall be protected in acting upon any statement, certificate, notice, request, consent, order or other document reasonably believed
by it to be genuine and to have been signed or presented by the proper party or parties. The Escrow Agent shall have no duty to verify
any such statement, certificate, notice, request, consent, order or other document, and its sole responsibility shall be to act only as
expressly set forth in this Agreement. The Escrow Agent shall be under no obligation to institute or defend any action, suit or proceeding
in connection with this Agreement unless first indemnified by the Company to its satisfaction. The Escrow Agent shall not have a right
to indemnity from the Company or Joseph Gunnar for liabilities or obligations due to the Escrow Agent's willful misconduct or gross
negligence. The Escrow Agent may consult counsel in respect of any question arising under this Agreement and the Escrow Agent shall not
be liable for any action taken or omitted in good faith upon advice of such counsel. Notwithstanding any other provision of this Agreement,
the Escrow Agent's liability shall be limited in the aggregate to the amount of fees paid by the parties to the Escrow Agent in the twelve
(12) months immediately preceding the first receipt by the Escrow Agent of notice of the claim. The Company acknowledges that the Escrow
Agent is not a broker-dealer and is relying on the Company to identify the Investors under its prescribed AML procedures.

7.  **<u>Reserved.</u>** 

8.  **<u>Reserved.</u>** 

9.  **<u>Reserved.</u>** 

10.  **<u>Notices.</u>** All notices, requests, demands, and other communications under this Agreement shall
be in writing and shall be deemed to have been duly given (a) on the date of service if served personally on the party to whom notice
is to be given, (b) on the day of transmission if sent by facsimile transmission to the facsimile number given below, and telephonic confirmation
of receipt is obtained promptly after completion of transmission, (c) on the day after delivery to Federal Express or similar overnight
courier or the express mail service maintained by the United States Postal Service, or (d) on the fifth day after mailing, if mailed to
the party to whom notice is to be given, by first class mail, registered or certified, postage prepaid, and properly addressed, return
receipt requested, to the party as follows:

**If to the Company:**

**Functional Brands Inc.**

6400 SW Rosewood Street

Lake Oswego, Oregon 97035

Attn: Eric Gripentrog

Phone: 800-245-8282

Email: eric.gripentrog@functionalbrandsinc.com

**If to Joseph Gunnar:**

**Joseph Gunnar & Co., LLC** 

1000 RXR Plaza

Uniondale, New York 11556

Attn: Vincent Miscioscia

Phone: 212-440-9613

Email: vmiscioscia@jgunnar.com

**If to the Escrow Agent:**

**Odyssey Transfer and Trust Company**

Attn: Client Services

2155 Woodlane Drive, Suite 100

Woodbury, MN 55125

Phone: 612-482-5100

Any party may change its address for purposes of this Section by giving the other party written notice of the new address in the manner set forth above.

11.  **<u>Indemnification of Escrow Agent:</u>** The Company and Joseph Gunnar shall jointly and severally
indemnify and hold harmless the Escrow Agent from and against, any and all loss, liability, cost, damage, and expense, including, without
limitation, reasonable counsel fees, which the Escrow Agent may suffer or incur by reason of any action, claim, or proceeding brought
against the Escrow Agent arising out of or relating in any way to this Agreement or any transaction to which this Agreement relates unless
such action, claim, or proceeding is the result of the gross negligence or willful misconduct of the Escrow Agent. The Escrow Agent may
consult counsel in respect of any question arising under this Agreement. The Escrow Agent shall not have the right to set off or deduct
from the Escrow Funds any unpaid fees, non-reimbursed expenses or unsatisfied indemnification rights, and the Escrow Funds shall not be
used by the Escrow Agent to set off any other obligations of any of the parties owing to the Escrow Agent. Upon receipt by the Escrow
Agent of actual notice of an action, claim or proceeding against the Escrow Agent with respect to which indemnity may be sought under
this Section 11, the Escrow Agent shall promptly notify the Company and Joseph Gunnar in writing; provided that failure by the Escrow
Agent to so notify the Company and Joseph Gunnar shall not relieve the Company and Joseph Gunnar from any liability which the Company
and Joseph Gunnar may have on account of this indemnity or otherwise to the Escrow Agent, except to the extent the Company or Joseph Gunnar
shall have been prejudiced by such failure. The Company and Joseph Gunnar shall not be liable for any settlement of any action, claim
or proceeding effected without their written consent (which shall not be unreasonably withheld).

12.  **<u>Successors and Assigns.</u>** Except as otherwise provided in this Agreement, no party hereto
shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other parties hereto and any
such attempted assignment without such prior written consent shall be void and of no force and effect. This Agreement shall inure to the
benefit of, and be binding upon, the assigns, successors in interest, personal representatives, estates, heirs, and legatees of each of
the parties hereto.

13.  **<u>Governing Law; Jurisdiction.</u>** This Agreement shall be construed, performed, and enforced
in accordance with, and governed by, the internal laws of the State of Minnesota.

14.  **<u>Severability.</u>** In the event that any part of this Agreement is declared by any court or other
judicial or administrative body to be null, void, or unenforceable, said provision shall survive to the extent it is not so declared,
and all of the other provisions of this Agreement shall remain in full force and effect.

15.  **<u>Amendments; Waivers.</u>** This Agreement may be amended or modified, and any of the terms, covenants,
representations, warranties, or conditions hereof may be waived, only by a written instrument executed by the parties hereto, or in the
case of a waiver, by the party waiving compliance. The failure of any party at any time or times to require performance of any provision
hereof shall in no manner affect its right at a later time to enforce the same. Any waiver by any party of any condition, or of the breach
of any provision, term, covenant, representation, or warranty contained in this Agreement, whether by conduct or otherwise, in any one
or more instances, shall not be deemed to be nor construed as further or continuing waiver of any such condition, or of the breach of
any other provision, term, covenant, representation, or warranty of this Agreement.

16.  **<u>Entire Agreement.</u>** This Agreement contains the entire understanding among the parties hereto
with respect to the escrow contemplated hereby and supersedes and replaces all prior and contemporaneous agreements and understandings,
oral or written, with regard to such escrow.

17.  **<u>Section Headings.</u>** The Section headings in this Agreement are for reference purposes only
and shall not affect the meaning or interpretation of this Agreement.

18.  **<u>Counterparts.</u>** This Agreement may be executed in counterparts, each of which shall be deemed
an original, but all of which shall constitute the same instrument.

19.  **<u>Time of Essence.</u>** Time is of the essence of this Agreement.

20.  **<u>Resignation; Removal.</u>** The Escrow Agent may resign upon thirty (30) days' advance written
notice to the Company and Joseph Gunnar. The Escrow Agent may be removed upon thirty (30) days' advance written notice from the
Company or Joseph Gunnar to the Escrow Agent. Upon either such notice, a successor escrow agent shall be appointed by the Company or Joseph
Gunnar and the Company or Joseph Gunnar shall provide written notice of such appointment to the resigning Escrow Agent. Such successor
escrow agent shall become the escrow agent hereunder upon the resignation or removal date specified in such notice. If a successor escrow
agent is not appointed within the 30-day period following such notice, such removal shall be null and void and the Escrow Agent shall
continue to be bound by all the provisions hereof; provided, however, that the Escrow Agent may petition any court of competent jurisdiction
to name a successor escrow agent. Upon delivery of the Escrow Funds to a successor escrow agent in accordance with this Section, the Escrow
Agent shall thereafter be discharged from any further obligations hereunder and the successor escrow agent shall become the Escrow Agent
hereunder and all power, authority, duties and obligations of the Escrow Agent shall apply to any successor escrow agent.

21.  **<u>Force Majeure.</u>** No party shall be liable or responsible to the other parties, nor be deemed
to have defaulted under or breached this Agreement, for any failure or delay in fulfilling or performing any term of this Agreement, when
and to the extent such failure or delay is caused by or results from acts beyond the affected party's reasonable control, including,
without limitation: (i) acts of God; (ii) flood, earthquake, tsunami, fire or explosion, epidemics and pandemics; (iii) war, invasion,
riot or other civil unrest; (iv) government order or law; (v) actions, embargoes or blockades in effect on or after the date of this Agreement;
(vi) action by any governmental authority; (vii) national or regional emergency; and (viii) strikes, labor stoppages or slowdowns or other
industrial disturbances (each a "Force Majeure Event"). The party suffering a Force Majeure Event shall give notice to the
other parties, stating the period of time the occurrence is expected to continue and shall use diligent efforts to end the failure or
delay and ensure that the effects of such Force Majeure Event are minimized.

22.  **<u>Right Not to Act.</u>** The Escrow Agent shall retain the right not to act and shall not be liable
for refusing to act if, due to a lack of information or for any other reason whatsoever, the Escrow Agent, in its sole judgment, acting
reasonably, determines that such act might cause it to be in non-compliance with any applicable anti-money laundering or anti-terrorist
legislation, regulation or guideline. Further, should the Escrow Agent, in its sole judgment, acting reasonably, determine at any time
that its acting under this Agreement has resulted in its being in non-compliance with any applicable anti-money laundering or anti-terrorist
legislation, regulation or guideline, then it shall have the right to resign on 10 days prior written notice sent to all parties hereby
provided that: (i) the Escrow Agent's written notice shall describe the circumstances of such non-compliance; and (ii) that if such
circumstances are rectified to the Escrow Agent's satisfaction within such 10 day period, then such resignation shall not be effective.

[*Signature Page Follows*]

**IN WITNESS WHEREOF**, the parties hereto have caused this Agreement to be executed the day and year first set forth above.

---

| | |
|:---|:---|
| **FUNCTIONAL BRANDS INC.** | **FUNCTIONAL BRANDS INC.** |
| By: |  |
| Name: | Tariq Rahim |
| Title: | Chief Financial Officer |
| **JOSEPH GUNNAR & CO., LLC** | **JOSEPH GUNNAR & CO., LLC** |
| By: |  |
| Name: | Stephan Stein |
| Title: | President and Chief Operating Officer |
| **ODYSSEY TRANSFER AND TRUST COMPANY** | **ODYSSEY TRANSFER AND TRUST COMPANY** |
| By: |  |
| Name: | Becky Paulson |
| Title: | President |

---

**SCHEDULE 1**

**<u>CERTIFICATE OF INCUMBENCY FOR AUTHORIZED REPRESENTATIVES</u>**

The Company certifies that each of the names, titles, information, and signatures set forth as Authorized Representatives in this <u>Schedule 1</u> are authorized to execute documents and direct Odyssey Transfer and Trust Company as to all matters, including funds transfer instructions, address changes, and contact information, on behalf of the Company.

**<u>Part I – Direction for Funds Transfer</u>**

The following persons set forth in Part I are designated to provide direction, including but not limited to the transfer of funds, and to otherwise act on behalf of the Company.

---

| | |
|:---|:---|
| **Name** (print): Tariq Rahim | **Specimen Signature:**<br>|
| **Title:** Chief Financial Officer, Functional Brands Inc. | **E-mail(s)** (required): tariq.rahim@functionalbrandsinc.com<br>|
| **Telephone Number(s)** (required): (905) 541-8197<br>|  |

---

---

| | |
|:---|:---|
| **Name** (print): Stephan Stein | **Specimen Signature:**<br>|
| **Title:** President and Chief Operating Officer, Joseph Gunnar & Co., LLC | **E-mail(s)** (required): SStein@jgunnar.com |
| **Telephone Number(s)** (required): (212) 440-9650<br>|  |

---

**<u>Part II – Confirmation of Funds Transfers</u>**

The following persons set forth in Part II are designated to confirm funds transfer instructions.

---

| | |
|:---|:---|
| **Name**: Tariq Rahim<br>| **Telephone Number(s)** (required): (905) 541-8197 |
| **Title:** Chief Financial Officer<br>| **E-mail(s)** (required): tariq.rahim@functionalbrandsinc.com |
| **Name**: Stephan Stein<br>| **Telephone Number(s)** (required): (212) 440-9650 |
| **Title:** President and Chief Operating Officer, Joseph Gunnar & Co., LLC | **E-mail(s)** (required): SStein@jgunnar.com |

---

***<u>Schedule 1, continued</u>***

 ****

***<u>CERTIFICATE OF INCUMBENCY FOR AUTHORIZED REPRESENTATIVES</u>***

The below undersigned individual hereby certifies: (i) to possess familiarity with documents and records that govern the above-referenced account and the operation and management of the Company, (ii) to have the power and authority on behalf of the Company to execute this Certificate of Incumbency, and (iii) that the afore-referenced individuals (along with the undersigned, as noted) are duly authorized to instruct Odyssey Transfer and Trust Company on behalf of the Company.

Odyssey Transfer and Trust Company shall be entitled to rely upon any instructions from the individuals listed herein until notified in writing otherwise, or until termination of the above-referenced account. The Company's failure to submit an updated Certificate of Incumbency shall deem the Certificate of Incumbency (or similar signatory and/or Notices disclosure) on file as its Evergreen Certificate of Incumbency. The Company shall promptly advise Odyssey Transfer and Trust Company of any changes affecting this Certificate of Incumbency.

---

| | | |
|:---|:---|:---|
| **Functional Brands Inc.** | **Functional Brands Inc.** | **Functional Brands Inc.** |
| By: |  |  |
|  | Name: | Tariq Rahim |
|  | Title: | Chief Financial Officer |
|  | Date: | August 6, 2025 |

---

**Schedule 'II'**

**Form of Joint Direction** 

**Release to Company** 

---

| | |
|:---|:---|
| **TO:** | Odyssey Transfer and Trust Company (the "**Escrow Agent**")<br> Attention: Client Services |

---

---

| | |
|:---|:---|
| **RE:** | Escrow Agreement dated August 6, 2025 (the "**Escrow Agreement**") between Functional Brands Inc. (the "**Company**"), Joseph Gunnar & Co., LLC ("**Joseph Gunnar**") and the Escrow Agent |

---

**DATE:** **[●]** 

Capitalized terms in this letter that are not otherwise defined herein shall have the same meaning given to them in the Escrow Agreement.

This direction is provided pursuant to Section 4 of the Escrow Agreement.

The Company and Joseph Gunnar hereby jointly and irrevocably confirms that the release conditions of the Agreement is satisfied and hereby irrevocably instructs the Escrow Agent to release an aggregate of $**8,000,000** from the Escrow Funds by wire transfer to the Company, in accordance with the instructions set forth below:

---

| |
|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bank Name: |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bank Address |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bank Number: |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bank Transit Number: |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Account Name: |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IBAN: |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Account Number: |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beneficiary Address |

---

This direction may be executed by the undersigned in several counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall constitute but one and the same instrument. A signed copy of this direction delivered by facsimile, email or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this direction.

**[SIGNATURE PAGE FOLLOWS.]**

**SIGNED** as of the date first written above:

---

| | |
|:---|:---|
| **FUNCTIONAL BRANDS INC.** | **FUNCTIONAL BRANDS INC.** |
| Per: | |
|  | Name: |
|  | Title: |

---

---

| | |
|:---|:---|
| **JOSEPH GUNNAR & CO., LLC** | **JOSEPH GUNNAR & CO., LLC** |
| Per: | |
|  | Name: |
|  | Title: |

---

**Form of Joint Direction** 

**Release to Subscribers** 

---

| | |
|:---|:---|
| **TO:** | Odyssey Transfer and Trust Company (the "**Escrow Agent**")<br> Attention: Client Services |

---

---

| | |
|:---|:---|
| **RE:** | Escrow Agreement dated August 6, 2025 (the "**Escrow Agreement**") between Functional Brands Inc. (the "**Company**"), Joseph Gunnar and the Escrow Agent |

---

Capitalized terms in this letter that are not otherwise defined herein shall have the same meaning given to them in the Escrow Agreement.

This direction is provided pursuant to Section 4 of the Escrow Agreement.

The Company and Joseph Gunnar hereby jointly and irrevocably directs the Escrow Agent to return the Escrow Funds to the Subscribers in an amount equal to such Subscriber's aggregate purchase price for the Securities, by way of cheque delivered to the address provided to the Escrow Agent by the Subscriber, and this shall be your good and sufficient authority for doing so.

This direction may be executed by the undersigned in several counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall constitute but one and the same instrument. A signed copy of this direction delivered by facsimile, email or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this direction.

**[SIGNATURE PAGE FOLLOWS.]**

**SIGNED** as of the date first written above:

---

| | |
|:---|:---|
| **FUNCTIONAL BRANDS INC.** | **FUNCTIONAL BRANDS INC.** |
| Per: | |
|  | Name: |
|  | Title: |

---

---

| | |
|:---|:---|
| **JOSEPH GUNNAR & CO., LLC** | **JOSEPH GUNNAR & CO., LLC** |
| Per: | |
|  | Name: |
|  | Title: |

---

## Exhibit 10.27

**Exhibit 10.27**

July 22, 2025

Functional Brands Inc. 6400 SW Rosewood Street

Lake Oswego, Oregon 97035

Attn: Eric Gripentrog, Chief Executive Officer

Ladies and Gentlemen:

This letter (the "<u>Agreement</u>") constitutes the agreement between Joseph Gunnar & Co., LLC ("<u>Joseph Gunnar</u>" or the "<u>Placement Agent</u>") and Functional Brands Inc., a Delaware corporation (the "<u>Company</u>"), that Joseph Gunnar shall serve as the exclusive placement agent for the Company, on a "commercially reasonable efforts" basis, in connection with the proposed placement (the "<u>Placement</u>") of the Company's Series A Convertible Preferred Stock, par value $0.00001 per share (the "<u>Series A Preferred Stock</u>") and Series B Preferred Stock, par value $0.00001 per share (the "Series B Preferred Stock," and collectively with the Series A Preferred Stock, the "Preferred Stock"). The terms of the Placement shall be mutually agreed upon by the Company, Joseph Gunnar and the purchasers (each, a "<u>Purchaser</u>" and collectively, the "<u>Purchasers</u>") and nothing herein constitutes that Joseph Gunnar would have the power or authority to bind the Company or any Purchaser or an obligation for the Company to issue any Securities (as defined below) or complete the Placement. This Agreement and the documents executed and delivered by the Company or the Purchasers in connection with the Placement (including but not limited to the Purchase Agreement as defined below) shall be collectively referred to herein as the "<u>Transaction Documents</u>." The date on which there is a closing of the Placement (the "<u>Closing</u>") shall be referred to herein as the "<u>Closing Date</u>." The Preferred Stock issued at the Closing shall be referred to herein as the "<u>Securities</u>". The Company expressly acknowledges and agrees that Joseph Gunnar's obligations hereunder are on a commercially reasonable efforts basis only and that the execution of this Agreement does not constitute a legal or binding commitment by Joseph Gunnar to purchase the Securities or introduce the Company to investors and does not ensure the successful placement of the Securities or any portion thereof or the success of Joseph Gunnar with respect to securing any other financing on behalf of the Company. The Placement Agent may retain other brokers or dealers to act as sub- agents or selected-dealers on its behalf in connection with the Placement. The sale of the Securities to any Purchaser will be evidenced by a purchase agreement (the "<u>Purchase Agreement</u>") between the Company and such Purchaser in a form reasonably acceptable to the Company and Joseph Gunnar. Prior to the signing of the Purchase Agreement, officers of the Company will be available to answer inquiries from prospective Purchasers.

<u>SECTION 1</u>. <u>COMPENSATION</u>. As compensation for the services provided by Joseph Gunnar hereunder, the Company agrees to pay to Joseph Gunnar:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) A cash fee payable in U.S. dollars equal to eight percent (8.0%) of the gross proceeds received by the Company from investors in the Placement from the sale of the Securities at the Closing (the "<u>Cash Compensation</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) The Company, at each Closing, will grant to the Placement Agent, non-redeemable warrants (the "<u>Placement Warrants</u>") to purchase eight percent (8.0%) of the total number of shares of common stock of the Company, par value $0.00001 per share (the "Common Stock") issuable upon conversion of the Securities being sold and/or issued to Purchasers in the Placement (the "<u>Warrant Shares</u>"). The Placement Warrants will be non-exercisable for six (6) months after the date of the Closing and thereafter will be exercisable until their expiration five (5) years after the Closing Date at a price per share equal to the price of the Securities paid by the Purchasers in connection with the Placement. The Placement Agent will be entitled to customary "piggyback" and a one-time demand registration rights and anti-dilution rights (for stock dividends and splits and recapitalizations) pursuant to FINRA Rule 5110. If so registered, the Placement Warrants and the underlying securities may not be transferred, assigned or hypothecated for a period of six (6) months following the date of effectiveness or commencement of sales of the public offering pursuant to FINRA Rule 5110(g)(1). The Placement Warrants may be exercised in whole or in part and, shall provide for "cashless exercise."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) Subject to compliance with FINRA Rule 5110(f)(2)(D), subject to the closing of the Placement, the Company also agrees to reimburse Joseph Gunnar for all of Joseph Gunnar's actual out-of- pocket accountable expenses upon receipt of reasonably acceptable evidence of such expenditures, including the reasonable fees of legal counsel of Joseph Gunnar and other out-of-pocket expenses up to a maximum of

$50,000 at the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) The Placement Agent reserves the right to reduce any item of compensation or adjust terms thereof as specified therein in the event that a determination shall be made by FINRA to the effect that the Placement Agent's aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.

<u>SECTION 2</u>. <u>REPRESENTATIONS AND WARRANTIES OF THE COMPANY</u>. Each of the representations and warranties (together with any related disclosures in the disclosure schedules appended thereto) made by the Company to the Purchasers in the Transaction Documents, is hereby incorporated herein by reference (as though fully restated herein) and is, as of the date of this Agreement, hereby made to, and in favor of, the Placement Agent. In addition to the foregoing, the Company represents and warrants to the Placement Agent that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) (i) the Company has full right, power and authority to enter into this Agreement and to perform all of its obligations hereunder; (ii) this Agreement has been duly authorized and executed and constitutes a legal, valid and binding agreement of such party enforceable in accordance with its terms, except (x) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally, (y) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies, and (z) insofar as indemnification and contribution provisions may be limited by applicable law; and (iii) the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby does not conflict with or result in a breach of (y) the Company's certificate of incorporation or by-laws or other charter documents or (z) any agreement to which the Company is a party or by which any of its property or assets is bound.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) All disclosure provided by the Company to the Placement Agent regarding the Company, its business and the transactions contemplated hereby, is true and correct in all material aspects 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; provided, however, that the foregoing does not apply to any statements or omissions made solely in reliance on and in conformity with written information furnished to the Company by the Placement Agent specifically for use in the preparation thereof.

<u>SECTION 3</u>. <u>REPRESENTATIONS OF JOSEPH GUNNAR</u>. Joseph Gunnar represents and warrants that it (i) is a member in good standing of FINRA, (ii) is registered as a broker/dealer under the Securities Exchange Act of 1934, as amended, (iii) is licensed as a broker/dealer under the laws of the states applicable to the offers and sales of the Securities by Joseph Gunnar, (iv) is a limited liability company validly existing under the laws of its place of incorporation or formation, and (v) has full power and authority to enter into and perform its obligations under this Agreement. Joseph Gunnar will immediately notify the Company in writing of any change in its status as such. Joseph Gunnar covenants that it will use its commercially reasonable efforts to conduct the Placement in compliance with the provisions of this Agreement and the requirements of applicable law.

<u>SECTION 4</u>. <u>INDEMNIFICATION</u>. The Company agrees to the indemnification and other agreements set forth in the Indemnification provisions (the "<u>Indemnification</u>") attached hereto as Addendum A, the provisions of which are incorporated herein by reference and shall survive the termination or expiration of this Agreement.

<u>SECTION 5</u>. <u>ENGAGEMENT TERM</u>. The Placement Agent's engagement hereunder shall be until the earlier of (i) January 8, 2026 and (ii) the Closing Date of the Placement (such date, the "<u>Termination Date</u>" and the period of time during which this Agreement remains in effect is referred to herein as the "<u>Term</u>"). Notwithstanding anything to the contrary contained herein, the provisions concerning any obligation of the Company to pay any fees pursuant to Section 1 hereof, any expense reimbursement pursuant to Section 1 hereof, confidentiality, indemnification and contribution, Tail Financing (as defined below) or Right of First Refusal (as defined below) contained herein and the Company's obligations contained in the Indemnification Provisions will survive any expiration or termination of this Agreement on the terms thereof. If this Agreement is terminated prior to the completion of the Placement, all fees and expense reimbursement due to the Placement Agent, if any, shall be paid by the Company to the applicable Placement Agent on or before the Termination Date (in the event such fees are earned or owed as of the Termination Date). The Placement Agent agrees not to use any confidential information concerning the Company provided to such Placement Agent by the Company for any purposes other than those contemplated under this Agreement.

<u>SECTION 6</u>. <u>CONFIDENTIAL INFORMATION</u>. The Company agrees that any information or advice rendered by Joseph Gunnar in connection with this engagement is for the confidential use of the Company only in its evaluation of the Placement and, except as otherwise required by applicable law, rule or regulation, the Company will not disclose or otherwise refer to the advice or information in any manner without Joseph Gunnar's prior written consent.

<u>SECTION 7</u>. <u>NO FIDUCIARY RELATIONSHIP</u>. This Agreement does not create, and shall not be construed as creating rights enforceable by any person or entity not a party hereto, except those entitled hereto by virtue of the Indemnification provisions hereof. The Company acknowledges and agrees that Joseph Gunnar is not and shall not be construed as a fiduciary of the Company and shall have no duties or liabilities to the equity holders or the creditors of the Company or any other person by virtue of this Agreement or the retention of Joseph Gunnar hereunder, all of which are hereby expressly waived.

<u>SECTION 8</u>. <u>CLOSING</u>. The obligations of the Placement Agent hereunder, and the closing of the sale of the Securities pursuant to the Purchase Agreement are subject to the accuracy, when made and on the Closing Date, of the representations and warranties on the part of the Company and its subsidiaries contained herein and in the Purchase Agreement, to the accuracy of the statements of the Company and its subsidiaries made in any certificates pursuant to the provisions hereof, to the performance by the Company and its subsidiaries of their obligations hereunder, and to each of the following additional terms and conditions, except as otherwise disclosed to and acknowledged and waived by the Placement Agent by the Company:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) All corporate proceedings and other legal matters incident to the authorization, form, execution, delivery and validity of each of this Agreement, the Securities and all other legal matters relating to this Agreement and the transactions contemplated hereby shall be reasonably satisfactory in all material respects to counsel for the Placement Agent, and the Company shall have furnished to such counsel all documents and information that such counsel may reasonably request to enable them to pass upon such matters.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) The Placement Agent shall have received as of the Closing Date the written opinion of legal counsel to the Company from Sichenzia Ross Ference Carmel LLP, dated as of the Closing Date, addressed to the Placement Agent in a form and substance reasonably acceptable to Joseph Gunnar.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) (i) The Company or its parent shall not have sustained, any material loss or interference with its business from fire, explosion, flood, pandemic, terrorist act or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth in or contemplated by the Purchase Agreement for the Placement of the Securities, nor (ii) there shall not have been any change in the capital stock or long-term debt of the Company or any of its subsidiaries or any change, or any development involving a prospective change, in or affecting the business, general affairs, management, financial position, shareholders' equity, results of operations or prospects of the Company and its subsidiaries, the effect of which, in any such case described in clause (i) or (ii), is, in the reasonable judgment of the Placement Agent, so material and adverse as to make it impracticable or inadvisable to proceed with the sale or delivery of the Securities on the terms and in the manner contemplated by the Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) Subject to the closing of the Placement, the Company, on behalf of itself and any successor entity, agrees that, without the prior written consent of the Placement Agent, it will not, for a period of 30 calendar days following the Closing Date (the "<u>Lock-Up Period</u>"), (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company; (ii) file or caused to be filed any registration statement with the Commission relating to the offering of any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company, other than with respect to the Direct Listing (as defined in the Engagement Letter); or (iii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of capital stock of the Company, whether any such transaction described in clause (i), (ii) or (iii) above is to be settled by delivery of shares of capital stock of the Company or such other securities, in cash or otherwise, in each case other than Excluded Issuances. "<u>Excluded Issuances</u>" means any issuance or sale (or deemed issuance or sale) by the Company of: (a) Common Stock (as such number of shares is equitably adjusted for subsequent share splits, share combinations, share dividends and recapitalizations) issued directly or upon the exercise of options or upon the settlement of any securities issued to directors, officers, employees, consultants, agents or representatives of the Company in connection with their service as directors of the Company, their employment by the Company, their retention as consultants by the Company or services provided by them to the Company, in each case authorized by the Company's board of directors and issued pursuant to any approved equity incentive plans or other employee compensation plans of the Company (as such maybe adopted, amended, modified or restated from time to time) (collectively, the "<u>Equity Plans</u>") (including all such Common Stock outstanding prior to the date hereof); (b) Common Stock issued to consultants, vendors, partners, suppliers or talent pursuant to any consulting or other agreements (c) Common Stock issued upon the conversion or exercise of options (other than options covered by clause (a) above) or upon settlement of any securities issued under the Equity Plans, provided, that other than with respect to any Common Stock issued pursuant to the Equity Plans or the Securities, such securities are not amended after the date hereof to increase the number of Common Stock issuable thereunder or to lower the exercise or conversion price thereof; (d) Common Stock, options or convertible securities issued (i) to persons in connection with a joint venture, talent and/or podcast acquisition, strategic alliance or other commercial or collaborative relationship with such person (including persons that are customers, suppliers, vendors and strategic partners of the Company) relating to the operation of the Company's business and not for the primary purpose of raising equity capital, (ii) in connection with a transaction in which the Company, directly or indirectly, acquires another business or its tangible or intangible assets or the acquisition or license by the Company and/or an of its subsidiaries of the securities, businesses, property or other assets of another person, or (iii) to lenders as equity kickers in connection with debt financings of the Company, in each case where such transactions have been approved by the Company's board of directors; (e) Common Stock in an offering for cash for the account of the Company that is underwritten on a best efforts or firm commitment basis and is registered with the Commission under the Securities Act; (f) shares of Common Stock, options or convertible securities issued to the lessor or vendor in any office lease or equipment lease or similar equipment financing transaction in which the Company obtains the use of such office space or equipment for its business; or (g) any issuances to any underwriters or placements agents as equity compensation in connection with their services provided to the Company. As used herein, "<u>Engagement Letter</u>" means that certain letter agreement, dated as of April 8, 2025, by and between the Company and Joseph Gunnar.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E) Subsequent to the execution and delivery of this Agreement and up to the Closing Date, there shall not have occurred any of the following: (i) a banking moratorium shall have been declared by federal or state authorities or a material disruption has occurred in commercial banking or securities settlement or clearance services in the United States, (ii) the United States shall have become engaged in hostilities in which it is not currently engaged, the subject of an act of terrorism, there shall have been an escalation in hostilities involving the United States, or there shall have been a declaration of a national emergency or war by the United States, or (iii) there shall have occurred any other calamity or crisis or any change in general economic, political or financial conditions in the United States or elsewhere, if the effect of any such event in clause (ii) or (iii) makes it, in the sole and reasonable judgment of the Placement Agent, impracticable or inadvisable to proceed with the sale or delivery of the Securities on the terms and in the manner contemplated by the Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(F) No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any governmental agency or body which would, as of the Closing Date, prevent the issuance or sale of the Securities or materially adversely affect or potentially and materially adversely affect the business or operations of the Company; and no injunction, restraining order or order of any other nature by any federal or state court of competent jurisdiction shall have been issued as of the Closing Date which would prevent the issuance or sale of the Securities or materially and materially adversely affect or potentially materially adversely affect the business or operations of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(G) The Company shall have entered into a Purchase Agreement with each of the Purchasers and such agreements shall be in full force and effect and shall contain representations, warranties and covenants of the Company as agreed between the Company and the Purchasers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(H) On or prior to the Closing Date, the Company shall have furnished to the Placement Agent such further information, certificates and documents as the Placement Agent may reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(I) On or prior to the Closing Date, the Placement Agent shall have received copies of all waiver and acknowledgements required to be obtained by the Company pursuant to the Purchase Agreement, if any.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(J) The Placement Agent shall have completed its due diligence investigation of the Company to the satisfaction of the Placement Agent and its counsel, including without limitation, its due diligence investigation and analysis of: (i) the Company's officers, directors, employees, affiliates, customers and suppler; and (ii) the Company's audited historical financial statements as may be required by the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder; and (iii) the Company's prospects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(K) FINRA shall have raised no objection to the fairness and reasonableness of the terms and arrangements of this Agreement that may not otherwise be cured. In addition, the Company shall, if requested by the Placement Agent, make or authorize Placement Agent's counsel to make on the Company's behalf, an issuer filing with FINRA pursuant to FINRA Rule 5123 with respect to the Placement and pay filing fees required in connection therewith, if any.

All opinions, letters, evidence and certificates mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Placement Agent.

<u>SECTION 9</u>. <u>COVENANTS AND OBLIGATIONS</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) Following the Closing of the Offering, the Placement Agent shall be entitled to the compensation set forth in Section 1 herein with respect to the gross proceeds received by the Company from the sale of the securities to any investor located on <u>Exhibit A</u> hereto (the "<u>Tail Financing</u>"), and such Tail Financing is consummated at any time during the twelve (12) month period following the earlier of termination or expiration of the Engagement Period. <u>Exhibit A</u> shall include a list of all parties with whom the Placement Agent had discussions regarding the Placement during the Engagement Period. The Placement Agent shall provide the Company with <u>Exhibit A</u> within five Business Days following the earlier of the (i) end of the Engagement Period or (ii) Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) Following the Closing, the Placement Agent shall have an irrevocable right of first refusal (the "<u>Right of First Refusal</u>"), for a period of twelve (12) months from the later of (i) the Closing and (ii) consummation of the Direct Listing (as defined in the Engagement Letter), to act as sole investment banker, sole book-runner, and/or sole placement agent, whichever applicable and at the Placement Agent's sole discretion, for each and every future public and private equity and debt offering, including all equity linked financings (each, a "<u>Subject Transaction</u>") of the Company (or any successor to or any current or future subsidiary of the Company) during such twelve (12) month period, on compensation terms customary to the Placement Agent; <u>provided</u>, <u>however</u>, that Subject Transactions will not include (i) debt financings with banks or other financial institutions for which the Company does not use or engage the services of an investment banker or placement agent, or (ii) financings conducted solely with the Company's then existing investors; provided, however, that such existing investors are not subject to the Tail Financing provision in Section 9(A) above.

<u>SECTION 10</u>. <u>GOVERNING LAW</u>. This Agreement will be governed as to validity, interpretation, construction, effect and in all other respects by the internal law of the State of New York. The Company and the Placement Agent each (i) agree that any legal suit, action or proceeding arising out of or relating to this Agreement shall be instituted exclusively in the New York State Supreme Court, County of New York, or in the United States District Court for the Southern District of New York, (ii) waives any objection to the venue of any such suit, action or proceeding, and the right to assert that such forum is an inconvenient forum, and (iii) irrevocably consents to the jurisdiction of the New York State Supreme Court, County of New York, and the United States District Court for the Southern District of New York in any such suit, action or proceeding. Each of the Company and the Placement Agent further agrees to accept and acknowledge service of any and all process that may be served in any such suit, action or proceeding in the New York State Supreme Court, County of New York, or in the United States District Court for the Southern District of New York and agree that service of process upon it mailed by certified mail to its address shall be deemed in every respect effective service of process in any such suit, action or proceeding. The parties hereby expressly waive all rights to trial by jury in any suit, action or proceeding arising under this Agreement.

<u>SECTION 11</u>. <u>ENTIRE AGREEMENT/MISC</u>. This Agreement (including the attached Indemnification provisions) embody the entire agreement and understanding between the parties hereto, and supersedes all prior agreements and understandings, relating to the subject matter hereof. If any provision of this Agreement is determined to be invalid or unenforceable in any respect, such determination will not affect such provision in any other respect or any other provision of this Agreement, which will remain in full force and effect. This Agreement may not be amended or otherwise modified or waived except by an instrument in writing signed by both Joseph Gunnar and the Company. The representations, warranties, agreements and covenants contained herein shall survive the closing of the Placement and delivery of the Securities, as applicable. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or a .pdf format file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or .pdf signature page were an original thereof. The Company agrees that the Placement Agent may rely upon, and is a third party beneficiary of, the representations and warranties, and applicable covenants set forth in any such purchase, subscription or other agreement with the Purchasers in the Placement. All amounts stated in this Agreement are in US dollars unless expressly stated.

<u>SECTION 12</u>. <u>NOTICES</u>. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is sent to the email address specified on the signature pages attached hereto prior to 6:30 p.m. (New York City time) on a Business Day, (b) the next Business Day after the date of transmission, if such notice or communication is sent to the email address on the signature pages attached hereto on a day that is not a Business Day or later than 6:30 p.m. (New York City time) on any Business Day, (c) the third Business Day following the date of mailing, if sent by U.S. internationally recognized air courier service, or (d) upon actual receipt by the party to whom such notice is required to be given. "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 that banks shall not be deemed to be authorized or obligated to be closed due to a "shelter in place," "non-essential employee" or similar closure of physical branch locations at the direction of any governmental authority if such banks' electronic funds transfer systems (including for wire transfers) are open for use by customers on such day. The address for such notices and communications shall be as set forth on the signature pages hereto.

<u>SECTION 13</u>. <u>PRESS ANNOUNCEMENTS.</u> The Company agrees that the Placement Agent shall, from and after any Closing, have the right to reference the Placement and the Placement Agent's role in connection therewith in the Placement Agent's marketing materials and on its website and to place advertisements in financial and other newspapers and journals, in each case at its own expense, provided such publicizing shall not impact the Company's ability to conduct the Placement pursuant to all applicable securities laws.

<u>SECTION 14</u>. <u>SUCCESSORS AND ASSIGNS</u>. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. This Agreement or any obligations or rights hereunder may not be assigned any party hereto without the other party's prior written consent.

<u>SECTION 15</u>. <u>HEADINGS; LANGUAGE</u>*.* The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. The official language of this Agreement is the English language and it shall be interpreted in the English language for all purposes.

[*The remainder of this page has been intentionally left blank.*]

Please confirm that the foregoing correctly sets forth our agreement by signing and returning to Joseph Gunnar the enclosed copy of this Agreement.

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| | | |
|:---|:---|:---|
| Very truly yours, | Very truly yours, | Very truly yours, |
| **JOSEPH GUNNAR & CO., LLC** | **JOSEPH GUNNAR & CO., LLC** | **JOSEPH GUNNAR & CO., LLC** |
| By: | */s/ Stephan A. Stein* | */s/ Stephan A. Stein* |
|  | Name: | Stephan A. Stein |
|  | Title: | President |

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| |
|:---|
| <u>Address for notice</u>: |
| 1000 RXR Plaza |
| Uniondale, New York 11556 |
| Attention: Vincent Miscioscia |
| Email: vmiscioscia@jgunnar.com |

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Accepted and Agreed to as of

the date first written above:

**FUNCTIONAL BRANDS INC.**

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| | | |
|:---|:---|:---|
| By: | */s/ Eric Gripentrog* | */s/ Eric Gripentrog* |
|  | Name: | Eric Gripentrog |
|  | Title: | Chief Executive Officer |

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<u>Address for notice</u>:

Functional Brands Inc.

6400 SW Rosewood Street

Lake Oswego, Oregon 97035

Attention: Eric Gripentrog

Email:eric.gripentrog@functionalbrandsinc.com

**ADDENDUM A**

**<u>INDEMNIFICATION PROVISIONS</u>**

Capitalized terms used in this Addendum shall have the meanings ascribed to such terms in the Agreement to which this Addendum is attached:

In addition to and without limiting any other right or remedy available to the Placement Agent and the Indemnified Parties (as hereinafter defined), to the extent permitted by law, the Company agrees to indemnify and hold harmless Placement Agent and each of the other Indemnified Parties from and against any and all losses, claims, damages, obligations, penalties, judgments, awards, liabilities, reasonable and accountable out-of-pocket costs, reasonable and accountable out-of-pocket expenses and reasonable disbursements, and any and all actions, suits, proceedings and investigations in respect thereof and any and all reasonable legal and other reasonable costs, expenses and disbursements in giving testimony or furnishing documents in response to a subpoena or otherwise (including, without limitation, the reasonable and accountable out-of-pocket costs, out-of-pocket expenses and disbursements, as and when incurred, of investigating, preparing, pursing or defending any such action, suit, proceeding or investigation (whether or not in connection with litigation in which any Indemnified Party is a party)) (collectively, "<u>Losses</u>"), directly or indirectly, caused by, relating to, based upon, arising out of, or in connection with, Placement Agent's acting for the Company and as a Placement Agent, including, without limitation, any act or omission by Placement Agent in connection with its acceptance of or the performance or nonperformance of its obligations under the Agreement between the Company and Placement Agent to which these indemnification provisions are attached and form a part, any breach by the Company of any representation, warranty, covenant or agreement contained in the Agreement (or in any instrument, document or agreement relating thereto or referred to therein, including the Purchase Agreements and any agency agreement), or the enforcement by Placement Agent of its rights under the Agreement or these indemnification provisions, except to the extent that any such Losses relate to or arise out of fraud, recklessness, bad faith, gross negligence or willful misconduct of the Placement Agent or any other Indemnified Party.

The Company also agrees that no Indemnified Party shall have any liability (whether direct or indirect, in contract or tort or otherwise) to the Company for or in connection with the engagement of Placement Agent by the Company or for any other reason, except to the extent that any Loss relates to or arise out of fraud, recklessness, bad faith, gross negligence or willful misconduct of the Placement Agent or any other Indemnified Party.

These Indemnification Provisions shall extend to the following persons (collectively, the "<u>Indemnified Parties</u>"): the Placement Agent, its affiliated entities, managers, members, officers, directors, shareholders, partners, employees, legal counsel, agents, representatives, and controlling persons (within the meaning of the federal securities laws), and the officers, directors, partners, shareholders, members, managers, employees, legal counsel, agents, representatives and controlling persons of any of them. These indemnification provisions shall be in addition to any liability, which the Company may otherwise have to any Indemnified Party.

If any action, suit, proceeding or investigation is commenced, as to which an Indemnified Party proposes to demand indemnification, it shall notify the Company with reasonable promptness; provided, however, that any failure by an Indemnified Party to notify the Company shall not relieve the Company from its obligations hereunder. An Indemnified Party shall have the right to retain one counsel of its own choice to represent it, and the reasonable fees, expenses and disbursements of such counsel shall be borne by the Company. Any such counsel shall, to the extent consistent with its professional responsibilities, reasonably cooperate with the Company and any counsel designated by the Company. The Company shall be liable for any settlement of any claim against any Indemnified Party made with the Placement Agent's and the Company's written consent. The Company shall not, without the prior written consent of Placement Agent, settle or compromise any claim, or permit a default or consent to the entry of any judgment in respect thereof, unless such settlement, compromise or consent (i) includes, as an unconditional term thereof, the giving by the claimant to all of the Indemnified Parties of an unconditional release from all liability in respect of such claim, and (ii) does not contain any factual or legal admission by or with respect to an Indemnified Party or an adverse statement with respect to the character, professionalism, expertise or reputation of any Indemnified Party or any action or inaction of any Indemnified Party.

In order to provide for just and equitable contribution, if a claim for indemnification pursuant to these indemnification provisions is made but it is found in a final judgment by a court of competent jurisdiction (not subject to further appeal) that such indemnification may not be enforced in such case, even though the express provisions hereof provide for indemnification in such case, then the Company shall contribute to the Losses to which any Indemnified Party may be subject (i) in accordance with the relative benefits received by the Company and its shareholders, subsidiaries and affiliates, on the one hand, and the Indemnified Party, on the other hand, from the Placement of the Securities and (ii) if (and only if) the allocation provided in clause (i) of this sentence is not permitted by applicable law, in such proportion as to reflect not only the relative benefits, but also the relative fault of the Company, on the one hand, and the Indemnified Party, on the other hand, in connection with the statements, acts or omissions which resulted in such Losses as well as any relevant equitable considerations. No person found liable for a fraudulent misrepresentation shall be entitled to contribution from any person who is not also found liable for fraudulent misrepresentation. The relative benefits received (or anticipated to be received) by the Company and its shareholders, subsidiaries and affiliates shall be deemed to be equal to the aggregate consideration received or receivable by the Company in connection with the Placement of Securities relative to the amount of fees actually received by Placement Agent in connection with such Placement. Notwithstanding the foregoing, in no event shall the amount contributed by all Indemnified Parties exceed the amount of fees previously received by Placement Agent pursuant to the Agreement.

Neither termination nor completion of the Agreement shall affect these Indemnification Provisions which shall remain operative and in full force and effect. The Indemnification Provisions shall be binding upon the Company and its successors and assigns and shall inure to the benefit of the Indemnified Parties and their respective successors, assigns, heirs and personal representatives.

***[Signature Page Follows]***

 ****

IN WITNESS WHEREOF, the patties have executed this Addendum to that certain Placement Agency Agreement dated as of this 22<sup>nd</sup> day of July, 2025.

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| | | |
|:---|:---|:---|
| Very truly yours, | Very truly yours, | Very truly yours, |
| **JOSEPH GUNNAR & CO., LLC** | **JOSEPH GUNNAR & CO., LLC** | **JOSEPH GUNNAR & CO., LLC** |
| By: | /s/ Stephan A. Stein | /s/ Stephan A. Stein |
|  | Name: | Stephan A. Stein |
|  | Title: | President |

---

---

| |
|:---|
| <u>Address for notice</u>: |
| 1000 RXR Plaza |
| Uniondale, New York 11556 |
| Attention: Vincent Miscioscia |
| Email: vmiscioscia@jgunnar.com |

---

Accepted and Agreed to as of

the date first written above:

**FUNCTIONAL BRANDS INC.**

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| | | |
|:---|:---|:---|
| By: | */s/ Eric Gripentrog* | */s/ Eric Gripentrog* |
|  | Name: | Eric Gripentrog |
|  | Title: | Chief Executive Officer |

---

<u>Address for notice</u>:

Functional Brands Inc.

6400 SW Rosewood Street

Lake Oswego, Oregon 97035

Attention: Eric Gripentrog

Email:eric.gripentrog@functionalbrandsinc.com

*[Signature Page to Placement Agency Agreement]*

<u>EXHIBIT A</u>

TAIL INVESTORS

NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

**PLACEMENT AGENT COMMON STOCK PURCHASE WARRANT**

**FUNCTIONAL BRANDS INC.**

Warrant Shares: _______________ Issue Date: ______, 2025

THIS PLACEMENT AGENT COMMON STOCK PURCHASE WARRANT (the "<u>Warrant</u>") certifies that, for value received, Joseph Gunnar & Co., LLC, or its registered assigns (the "<u>Holder</u>") is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after January 22, 2026 (the "<u>Initial Exercise Date</u>") until 5:00 p.m. (New York City time) on the date that is five years following the Initial Exercise Date (the "<u>Termination Date</u>") but not thereafter, to subscribe for and purchase from FUNCTIONAL BRANDS INC., a Delaware corporation (the "<u>Company</u>"), up to [ ] shares (as subject to adjustment hereunder, the "<u>Warrant Shares</u>") of common stock of the Company, par value $0.00001 per share (the "<u>Common Stock</u>"). The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b). This Warrant is issued pursuant to that certain Placement Agent Agreement, by and between the Company and Joseph Gunnar & Co., LLC, dated as of July 22, 2025 (the "<u>Placement Agent Agreement</u>").

<u>Section 1</u>. <u>Definitions</u>. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement (the "<u>Purchase Agreement</u>"), dated July 22, 2025, among the Company and the purchasers signatory thereto.

<u>Section 2</u>. <u>Exercise</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>Exercise of Warrant</u>. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the "<u>Notice of Exercise</u>"). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier's check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Trading Day of receipt of such notice. **For the avoidance of doubt, there is no circumstance that would require the Company to net cash settle this Warrant.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) <u>Exercise Price</u>. The aggregate exercise price of this Warrant shall be $[ ]<sup>1</sup>, subject to adjustment hereunder (the "<u>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;c) <u>Cashless Exercise</u>. This Warrant may also be exercised, in whole or in part, at such time by means of a "cashless exercise" in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

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|:---|:---|
| (A) = | as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of "regular trading hours" (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. ("<u>Bloomberg</u>") as of the time of the Holder's execution of the applicable Notice of Exercise if such Notice of Exercise is executed during "regular trading hours" on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of "regular trading hours" on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of "regular trading hours" on such Trading Day; |

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<sup>1</sup> To be 100% of the per share purchase price in the PIPE.

(B) = the Exercise Price of this Warrant, as adjusted hereunder; and

(X) = the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the holding period of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c), except to the extent required by applicable law, rules or regulations.

"<u>Bid Price</u>" means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) the Common Stock is not then listed or quoted on a Trading Market and if prices for the Common Stock are then reported on OTCQB or OTCQX and OTCQB or OTCQX, as applicable, is not a Trading Market, the VWAP of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

"<u>Trading Day</u>" shall have the meaning as set forth in the Purchase Agreement.

"<u>VWAP</u>" means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the Common Stock is not then listed or quoted on a Trading Market and if prices for the Common Stock are then reported on OTCQB or OTCQX and OTCQB or OTCQX, as applicable, is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which 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;&nbsp;&nbsp;&nbsp;&nbsp; d) <u>Mechanics of Exercise</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. <u>Delivery of Warrant Shares Upon Exercise</u>. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder's or its designee's balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system ("<u>DWAC</u>") if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of- sale limitations pursuant to Rule 144 (assuming cashless exercise of this Warrant), and otherwise by physical delivery of a certificate, registered in the Company's share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the "<u>Warrant Share Delivery Date</u>"). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, "<u>Standard Settlement Period</u>" means the standard settlement period, expressed in a number of Trading Days, on the Company's primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time less than the amount stated on the face hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. <u>Delivery of New Warrants Upon Exercise</u>. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Rescission Rights</u>. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise</u>. In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder's brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a "<u>Buy-In</u>"), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder's total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy- In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder's right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company's failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>No Fractional Shares or Scrip</u>. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vi. <u>Charges, Taxes and Expenses</u>. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; <u>provided</u>, <u>however</u>, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vii. <u>Closing of Books</u>. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) <u>Holder's Exercise Limitations</u>. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with (i) the Holder's Affiliates, (ii) any other Persons acting as a group together with the Holder or any of the Holder's Affiliates, and (iii) any other Persons whose beneficial ownership of Common Stock would be aggregated with the Holder's for the purposes of determination of beneficial ownership pursuant to Section 13(d) and Rule 13d-3 of the Exchange Act (such Persons, "<u>Attribution Parties</u>")), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder's determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination and shall have no liability for exercises of this Warrant that are not in compliance with the Beneficial Ownership Limitation, except to the extent the Holder has detrimentally relied on the number of outstanding shares of Common Stock that was provided to Holder in writing by the Company for such purpose. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, and the Company shall have no obligation to verify or confirm the accuracy of such determination and shall have no liability for exercises of this Warrant that are not in compliance with the Beneficial Ownership Limitation, except to the extent that the Holder relies on the number of outstanding shares of Common Stock that was provided to Holder in writing by the Company for such purpose. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company's most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written request of a Holder, the Company shall within one Trading Day in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The "<u>Beneficial Ownership Limitation</u>" shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61<sup>st</sup> day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

<u>Section 3</u>. <u>Certain Adjustments</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) <u>Stock Dividends and Splits</u>. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, or (iii) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) <u>Subsequent Rights Offerings</u>. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the "<u>Purchase Rights</u>"), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (<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 exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) <u>Pro Rata Distributions</u>. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of 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) (a "<u>Distribution</u>"), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (<u>provided</u>, <u>however</u>, that, to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) <u>Fundamental Transaction</u>. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person in which the Company is not the surviving entity (other than a reincorporation in a different state, a transaction for changing the Company's name, or a similar transaction pursuant to which the surviving company remains a public company), (ii) the Company (or any Subsidiary), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of the Company's assets in one or a series of related transactions (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of more than 50% of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a "<u>Fundamental Transaction</u>"), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the "<u>Alternate Consideration</u>") receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the "<u>Successor Entity</u>") to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(d) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the "Company" shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) <u>Calculations</u>. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; f) <u>Notice to Holder</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. <u>Adjustment to Exercise Price</u>. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Notice to Allow Exercise by Holder</u>. If, while this Warrant is outstanding, (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any Fundamental Transaction, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least three (3) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice; and provided, further, that no notice shall be required if the information is disseminated in a press release or a document filed publicly with the Commission. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

<u>Section 4</u>. <u>Transfer of Warrant</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) <u>Transferability</u>. Subject to compliance with any applicable securities laws and to the provisions of Section 4.1 of the Purchase Agreement, which are incorporated herein by reference, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company on the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) <u>New Warrants</u>. Subject to compliance with any applicable securities laws, this Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the original Issue Date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) <u>Warrant Register</u>. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the "<u>Warrant Register</u>"), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) <u>Representation by the Holder</u>. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.

<u>Section 5</u>. <u>Registration</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) <u>Demand Registration Rights</u>. The Company hereby grants to the Holder a one-time demand registration right for five (5) years from the Issue Date with respect to the Warrant 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;b) <u>"Piggyback" Registration Rights</u>. The Holder shall have the right, for a period commencing on the date the Warrants are exercisable and ending on the earlier of (i) five years from the Issue Date, or (ii) the date that all Warrant Shares are eligible for resale by the Holder in compliance with Rule 144, to include any and all of the Warrant Shares underlying the Warrants (the "<u>Registrable Securities</u>") as part of any other registration of securities filed by the Company (other than in connection with a transaction contemplated by Rule 145(a) promulgated under the Securities Act or pursuant to Form S- 8 or any equivalent form); provided, however, that if, solely in connection with any primary underwritten public offering for the account of the Company, the managing underwriter(s) thereof shall, in its reasonable discretion, impose a limitation on the number of shares of Common Stock which may be included in the Registration Statement because, in such underwriter(s)' judgment, marketing or other factors dictate such limitation is necessary to facilitate public distribution, then the Company shall be obligated to include in such Registration Statement only such limited portion of the Registrable Securities with respect to which the Holder requested inclusion hereunder as the underwriter shall reasonably permit. Any exclusion of Registrable Securities shall be made pro rata among the Holders seeking to include Registrable Securities in proportion to the number of Registrable Securities sought to be included by such Holders; provided, however, that the Company shall not exclude any Registrable Securities unless the Company has first excluded all outstanding securities, the holders of which are not entitled to inclusion of such securities in such Registration Statement or are not entitled to pro rata inclusion with the Registrable Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) <u>Terms</u>. The Company shall bear all fees and expenses attendant to registering the Registrable Securities pursuant to Section 5(a) and 5(b) hereof, but the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Holders to represent them in connection with the sale of the Registrable Securities. In the event of such a proposed registration, the Company shall furnish the then Holders of outstanding Registrable Securities with not less than fifteen (15) days written notice prior to the proposed date of filing of such registration statement. Such notice to the Holders shall continue to be given for each registration statement filed by the Company during the five (5) year period following the Initial Exercise Date until such time as all of the Registrable Securities have been sold by the Holder or are eligible for resale by the Holder in compliance with Rule 144. The holders of the Registrable Securities shall exercise the "piggy-back" rights provided for herein by giving written notice within five (5) days of the receipt of the Company's notice of its intention to file a registration statement. Except as otherwise provided in this Warrant, there shall be no limit on the number of times the Holder may request registration under this Section 5(b); provided, however, that such registration rights shall terminate on the Termination 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; d) <u>General Terms</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. <u>Indemnification</u>. The Company shall indemnify the Holder(s) of the Registrable Securities to be sold pursuant to any registration statement hereunder and each person, if any, who controls such Holders within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act against all loss, claim, damage, expense or liability (including all reasonable attorneys' fees and other expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which any of them may become subject under the Securities Act, the Exchange Act or otherwise, arising from such registration statement but only to the same extent and with the same effect as the provisions pursuant to which the Company has agreed to indemnify the Placement Agent contained in Section 4 of the Placement Agent Agreement. The Holder(s) of the Registrable Securities to be sold pursuant to such registration statement, and their successors and assigns, shall severally, and not jointly, indemnify the Company, against all loss, claim, damage, expense or liability (including all reasonable attorneys' fees and other expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which they may become subject under the Securities Act, the Exchange Act or otherwise, arising from information furnished by or on behalf of such Holders, or their successors or assigns, in writing, for specific inclusion in such registration statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Exercise of Warrants</u>. Nothing contained in this Warrant shall be construed as requiring the Holder(s) to exercise their Warrants prior to or after the initial filing of any registration statement or the effectiveness thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; iii. <u>Documents Delivered to Holders</u>. The Company shall deliver promptly to each Holder participating in the offering requesting the correspondence and memoranda described below and to the managing underwriter, if any, copies of all correspondence between the Commission and the Company, its counsel or auditors and all memoranda relating to discussions with the Commission or its staff with respect to the registration statement and permit each Holder and underwriter to do such investigation, upon reasonable advance notice, with respect to information contained in or omitted from the registration statement as it deems reasonably necessary to comply with applicable securities laws or rules of FINRA. Such investigation shall include access to books, records and properties and opportunities to discuss the business of the Company with its officers and independent auditors, all to such reasonable extent and at such reasonable times as any such Holder shall reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Documents to be Delivered by Holder(s)</u>. Each of the Holder(s) participating in any of the foregoing offerings shall furnish to the Company a completed and executed questionnaire provided by the Company requesting information customarily sought of selling security holders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>Damages</u>. Should the registration or the effectiveness thereof required by Sections 5(a) and 5(b) hereof be delayed by the Company or the Company otherwise fails to comply with such provisions, the Holder(s) shall, in addition to any other legal or other relief available to the Holder(s), be entitled to obtain specific performance or other equitable (including injunctive) relief against the threatened breach of such provisions or the continuation of any such breach, without the necessity of proving actual damages and without the necessity of posting bond or other security.

<u>Section 6.</u> <u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) <u>No Rights as Stockholder Until Exercise; No Settlement in Cash</u>. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a "cashless exercise" pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required to net cash settle an exercise of this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) <u>Loss, Theft, Destruction or Mutilation of Warrant</u>. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) <u>Saturdays, Sundays, Holidays, etc</u>. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Trading Day, then such action may be taken, or such right may be exercised on the next succeeding Trading Day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; d) <u>Authorized Shares</u>.

Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

Before taking any action that would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) <u>Jurisdiction</u>. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Placement Agent Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f) <u>Restrictions</u>. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g) <u>Nonwaiver and Expenses</u>. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder's rights, powers or remedies. Without limiting any other provision of this Warrant or the Placement Agent Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys' fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h) <u>Notices</u>. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Placement Agent Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i) <u>Limitation of Liability</u>. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j) <u>Remedies</u>. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;k) <u>Successors and Assigns</u>. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;l) <u>Amendment</u>. Any modifications, amendments or waivers of the provisions hereof shall be subject the terms and conditions of the Placement Agent Agreement regarding the same. Notwithstanding the foregoing, this Warrant may be modified or amended, or the provisions hereof waived, with the written consent of the Company and the Holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;m) <u>Severability</u>. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;n) <u>Headings</u>. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*

*(Signature Page Follows)*

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

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| | | |
|:---|:---|:---|
| **FUNCTIONAL BRANDS INC.** | **FUNCTIONAL BRANDS INC.** | **FUNCTIONAL BRANDS INC.** |
| By: |  |  |
|  | Name: | Eric Gripentrog |
|  | Title: | Chief Executive Officer |

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**NOTICE OF EXERCISE**

FUNCTIONAL BRANDS INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The undersigned hereby elects to purchase ________Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Payment shall take the form of (check applicable box):

☐ in lawful money of the United States; or

☐ if permitted, the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

__________________________

The Warrant Shares shall be delivered to the following DWAC Account Number:

__________________________

__________________________

__________________________

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) <u>Accredited Investor</u>. The undersigned is an "accredited investor" as defined in Regulation D promulgated under the Securities Act of 1933, as amended.

[SIGNATURE OF HOLDER]

Name of Investing Entity:____________________________________________________________________________

*Signature of Authorized Signatory of Investing Entity*: _____________________________________________________

Name of Authorized Signatory: _______________________________________________________________________

Title of Authorized Signatory: ________________________________________________________________________

Date:___________________________________________________________________________________________

ASSIGNMENT FORM

*(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)*

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to

---

| | |
|:---|:---|
| Name: | ______________________________________ |
|  | (Please Print) |
|  | ______________________________________ |
| Address: | (Please Print) |
| Phone Number: | ______________________________________ |
| Email Address: | ______________________________________ |
| Dated:_____________, ____ |  |
| Holder's Signature:__________________ |  |
| Holder's Address:___________________ |  |

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## Exhibit 10.28

**Exhibit 10.28**

EIGHTH AMENDED FORBEARANCE AGREEMENT

This Amended Forbearance Agreement ("Agreement"), effective as of August 27, 2025, is made by and among HTO Nevada Inc. ("HTO Nevada"),Functional Brands Inc., ("Functional Brands"), aka HT Naturals, Inc., a Delaware Corporation, ("Functional Brands"), jointly and severally ("Purchaser") and Kirkman Laboratories, Inc. ("Kirkman Lab"), Kirkman Group International, Inc. ("Kirkman International" and together with Kirkman Lab referred to as the "Kirkman Parties"), Kirkman Group, Inc. ("Kirkman Group" and together with the Kirkman Parties referred to as "Sellers"), and David K. Humphrey ("Humphrey") and collectively with Purchaser and the Sellers as the "Parties" or individually as a "Party").

RECITALS

WHEREAS, the Parties entered into that certain Asset Purchase Agreement dated as of June 28, 2019 (the "Original Asset Purchase Agreement), that certain Amendment No. I to the Asset Purchase Agreement dated November 30, 2021 (the "First Amendment"), and that certain Amendment No. 2 to the Asset Purchase Agreement dated May 16, 2022 (the "Second Amendment"), Amendment No. 3 to APA dated August 1, 2024, Amendment No. 4 dated September 24, 2024; (the Original Asset Purchase Agreement, First Amendment, Second Amendment, Third Amendment, Fourth Amendment collectively, the "Asset Purchase Agreement"), and various associated agreements (the "Collateral Agreements"), in which, among other things, Sellers sold to Purchaser various assets, including certain Intangible Assets including Intellectual Property;

WHEREAS, under the Original Asset Purchase Agreement, Purchaser and HTO Holdings Inc. were to make certain payments toward the purchase price set forth in the Asset Purchase Agreement;

WHEREAS, under the First Amendment, the Parties agreed to amend the Asset Purchase Agreement's payment schedule;

WHEREAS, under the Second Amendment, the Parties made corrections to the schedules and exhibits to the Asset Purchase Agreement and the Collateral Agreements listing and relating to the Intellectual Property;

WHEREAS, under the Third Amendment, the Parties made corrections to the schedules and exhibits to the Asset Purchase Agreement and the Collateral Agreements listing and relating to the Intellectual Property;

WHEREAS, under the Fourth Amendment, the Parties made corrections to the schedules and exhibits to the Asset Purchase Agreement and the Collateral Agreements listing and relating to the Intellectual Property;

WHEREAS, under a Letter Agreement dated May 31, 2022, Purchaser has paid Purity Labs, Inc. the total sum of $100,000 (the "Purity Payment") and has paid Humphrey the total sum of $250,000 (the "Humphrey Payment", and together with the Purity Payment, the "Immediate Payments");

1 EIGHTH AMENDED FORBEARANCE AGREEMENT

WHEREAS, the Parties executed a Forbearance Agreement (the "Forbearance Agreement") extending the payment due under the Asset Purchase Agreement to August 31, 2022.

WHEREAS, Purchaser is in default of the August 31, 2022 payment due under the Forbearance Agreement and (the "Obligations");

WEIEREAS, Purchaser paid Sellers $65,000 due under the Asset Purchase Agreement in September 2022.

WHEREAS, the Parties executed a First Amended Forbearance Agreement on or about December 27, 2022, under which Purchaser has made the following payments: $250,000 and $15,000 interest per month for each month between September and December 2023, inclusive, and a $7,500 payment in January 2024;

WHEREAS, HTO Nevada Inc. was acquired by Functional Brands Inc. on or about May 19, 2023, as part of a corporate restructuring; and, is now a wholly owned subsidiary of Functional Brands Inc. In this transaction, HTO Holdings Inc. transferred all outstanding shares of HTO Nevada Inc. to Functional Brands Inc. a wholly owned subsidiary.

WHEREAS, the Parties executed a Second Amended Forbearance Agreement on or about March 1, 2024, under which the Purchaser has made the following payments: $130,000 and $20,000 per month ($15,000 interest and $5,000 principal) for each month beginning March 2024 through July 2024;

WHEREAS, the Parties executed a Third Amended Forbearance Agreement on or about August 1, 2024, under which the Purchaser has made the following payments: $20,000 per month ($15,000 interest and $5,000 principal) for each month beginning August 2024 through September 2024; and an additional $20,000 principal payments in August.

WHEREAS, the Parties executed a Fourth Amended Forbearance Agreement on or about September 24, 2024, under which the Purchaser has made the following payments: $20,000 per month ($15,000 interest and $5,000 principal) for each month beginning October 1, 2024 through December 3 1, 2024; and an additional $20,000 principal payments in October, November and December, 2024.

WHEREAS, the Parties executed a Fifth Amended Forbearance Agreement on or about December 3 1, 2024, under which the Purchaser has made the following payments: $20,000 per month ($15,000 interest and $5,000 principal) for January and February 2025.

WHEREAS, the Parties informally extended the Fifth Amended Forbearance Agreement providing for payments of $50,000 on or about March 5, 2025 and $50,000 on or about April l , 2025 and $50,000 on or about May l, 2025.

WHEREAS, the Parties extended the Sixth Amended Forbearance Agreement providing for payments of $30,000 on or about June 1, 2025 and $30,000 on or about July 1, 2025.

WHEREAS, the Parties extended the Seventh Amended Forbearance Agreement providing for payments of $30,000 on or about August 1, 2025.

"WHEREAS, Purchaser has made the $30,000 payment on August l, 2025, which has been applied as an interest-only payment."

2 EIGHTH AMENDED FORBEARANCE AGREEMENT

"WHEREAS, Parties have extended this Eighth Amended Forbearance Agreement providing for payments of $30,000 on or about September 1, 2025 applied as an interest-only payment."

WHEREAS, the balance due as of the date of this Eighth Amended Forbearance Agreement is $2,227,366.00.

WHEREAS, Purchaser and HTO Holdings have requested Sellers to forbear from exercising their rights and remedies under the Asset Purchase Agreement and Forbearance Agreement; and

WHEREAS, Sellers are willing to forbear from exercising such rights and remedies for a limited period of time, provided that Purchaser and HTO Holdings complies with the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants, terms, and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Purchaser Acknowledgments</u>. Purchaser acknowledges and agrees that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 <u>Recitals</u>. The above recitals are true and correct.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2 <u>Transaction Documents</u>. The Asset Purchase Agreement, Collateral Agreements, Forbearance Agreement, and all other agreements, instruments, and other documents executed in connection with or relating to the Asset Purchase Agreement (the "Transaction Documents") are legal, valid, binding, and enforceable against Purchaser in accordance with their terms. Except as otherwise set forth herein, the terms of the Transaction Documents remain unchanged. Undefined capitalized terms used herein shall have the meanings ascribed thereto in the Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3 <u>Default</u>. The following Event of Default has occurred and is continuing under the Transaction Documents:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Failure to make timely payments due under the Asset Purchase Agreement, the amendments thereto and subsequent Forbearance Agreements or payment in full, with a remaining balance due under the Asset Purchase Agreement and the Fifth Forbearance Agreement of $2,227,366.00 (the "Existing Default").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.4 <u>Obligations</u>. The Obligations are not subject to any setoff, deduction, claim, counterclaim, or defenses of any kind or character whatsoever.

3 EIGHTH AMENDED FORBEARANCE AGREEMENT

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.5 <u>Collateral</u>. Purchaser represents that Sellers have valid, enforceable, and first position, perfected security interests in and to and liens under the Collateral Agreements, as to which there are no setoffs, deductions, claims, counterclaims, or defenses of any kind or character whatsoever.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Consistent with that letter agreement dated May 3 1, 2022, Purchaser acknowledges and agrees that Sellers have had and continue to retain a security interest in and to all of Purchasers respective assets, including but not limited to any machinery, equipment, furniture, furnishings, tools, fixtures, parts, accessories, accounts, inventory, raw materials, work-in-progress, finished goods, cash, deposit accounts, investments, investment accounts, leasehold interests, permits, licenses, intellectual property, patents, patent applications, trademarks, service marks, copyrights, trade secrets, domain names, software, any other intellectual property rights, contracts, contract rights, rights under purchase orders, instruments, chattel paper, notes, drafts, any obligations for the payment of money arising out of the sale or lease of goods, any and all after acquired assets and any and all proceeds derived from the assets. Functional Brands Inc. acknowledges and agrees that pursuant to its purchase of all outstanding shares of HTO Nevada, Inc., that it acquired HTO Nevada, Inc. subject to Seller's security interest. To the extent necessary, Purchaser, jointly and severally, hereby grant Sellers a security interest in any and all collateral and assets set forth above and elsewhere in the Original Asset Purchase Agreement, Collateral Agreements, any and all Forbearance Agreements and this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Purchaser further hereby grants Sellers a "lien" on Purchaser's accounts receivable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.6 <u>No Waiver of Default</u>. Neither this Agreement, nor any actions taken in accordance with this Agreement or the Transaction Documents, shall be construed as a waiver of or consent to the Existing Default or any other existing or future defaults under the Transaction Documents, as to which Sellers' rights shall remain reserved.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.7 <u>Preservation of Rights and Remedies</u>. Upon expiration of the Forbearance Period (as defined below), all of Sellers' rights and remedies under the Transaction Documents and at law and in equity shall be available without restriction or modification, as if the forbearance had not occurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.8 <u>Purpose of Forbearance</u>. The purpose of this Agreement is to provide Purchaser with a period of time to cure the Existing Default.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.9 <u>Request to Forbear</u>. Purchaser has requested Sellers' forbearance as provided herein, which shall inure to their direct and substantial benefit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Sellers Forbearance</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 <u>Forbearance Period</u>. Subject to compliance by Purchaser with the terms and conditions of this Agreement, Sellers hereby agree to forbear from exercising their rights and remedies against Purchaser under the Transaction Documents with respect to the Existing Default during the period (the "Forbearance Period") commencing on the Effective Date (as defined below) and ending on the earlier to occur of (i) September 30, 2025 and (ii) the date that any Forbearance Default (as defined below) occurs, upon which, Sellers' forbearance, as provided herein, shall immediately and automatically cease without any requirement of notice or further action by any party (the "Termination Date"). On and from the Termination Date, Sellers may, in their sole discretion, exercise any and all remedies available to them under the Transaction Documents that otherwise would be available only by reason of the occurrence of any Events of Default thereunder or the continuation of any Existing Default.

4 EIGHTH AMENDED FORBEARANCE AGREEMENT

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 <u>Extension of Forbearance Period</u>. In the sole and absolute discretion of Sellers and without obligation, after the Termination Date, Sellers may renew or extend the Forbearance Period, or grant additional forbearance periods.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 <u>Scope of Forbearance</u>. During the Forbearance Period only, Sellers will not (i) accelerate the maturity of the Obligations or initiate proceedings to collect the Obligations; (ii) initiate or join in filing any involuntary bankruptcy petition with respect to Purchaser under the Bankruptcy Code, or otherwise file or participate in any insolvency, reorganization, moratorium, receivership, or other similar proceedings against Purchaser under the laws of the US; or (iii) repossess or dispose of any of the Collateral, through judicial proceedings or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Conditions Precedent</u>. This Agreement shall not become effective unless and until the date (the "Effective Date") that each of the following conditions shall have been satisfied in Sellers' sole and absolute discretion, unless waived in writing by Sellers:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 <u>Delivery of Certain Documents</u>. Purchaser shall deliver or cause to be delivered the following documents, each in substance and form acceptable to Sellers:

&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 copy of this Agreement, duly executed by 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;(b) an updated Confession of Judgment executed by Purchaser, in the form attached hereto and incorporated herein by this reference as Appendix 3.1; 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) such other documents as Sellers may request with respect to any matter relevant to this Agreement or the transactions contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Payments During Forbearance Period</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 <u>Interest-Only Payments</u>. Purchaser has already paid a $15,000 interest payment for February 2024 and March 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 <u>Payments of Interest and Principal</u>. Purchaser has already made payments of $20,000 per month, due the first day of each of April, May, June, July, August, September 2024, with $15,000 of each payment allocated to interest and the remaining $5,000 of each payment allocated to principal.

5 EIGHTH AMENDED FORBEARANCE AGREEMENT

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 <u>Payments of Interest and Principal</u>. Purchaser has also made payments of $20,000 per month for October, November and December, 2024, with $15,000 of each payment allocated to interest and the remaining $5,000 of each payment allocated to principal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 <u>Additional Payments</u>. Purchaser has already made a principal payment of $130,000 against the remaining balance over the course of 3 payments. First payment occurred on March 15, 2024 of $45,000, and subsequent payments occurred for $40,000 on April 15, 2024 and $45,000 on May 15, 2024 to satisfy the $130,000 principle payment. Purchaser made another $20,000 payment towards principal on August 15, 2024, October 15, 2024, November 15, 2024 and December 15, 2024

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5 <u>Additional Principal & Interest Payment</u>: The Purchaser has also made payments of $20,000 payment for January and February 2025, with $15,000 of each payment allocated to interest and the remaining $5,000 of each payment allocated to principal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6 The Purchaser has made payments of $50,000 on March 5, 2025, $50,000 on April l, 2025 and $50,000 on May 1, 2025, with $15,000 of each payment allocated to interest and the remaining $35,000 of each payment allocated to principal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7 The Purchaser has made payments in the amounts of $30,000 on or about June 1, 2025, and $30,000 payment on or about July l, 2025. $30,000 of each payment was designated as an interest only payment, and none to principal, regardless of rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.8 The purchaser already made a payment of $30,000 on or about August l, 2025 and this payment was designated as interest only payment, and non to principal, regardless of rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.9 <u>Purchaser shall make an interest-only payment of $30,000</u> on or before September 1, 2025 <u>covering the period September 1—30, 2025 and this payment will be designated as interest only payment, and none to principal, regardless of rate.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.10 <u>Balance Due Payment.</u> As of August 27, 2025, the balance due and owing is $2,227,366.00. The Purchaser shall pay Seller $2,227,366.00 by wire transfer on or before September 30, 2025, before any additional principal payments or on the date the Purchaser closes any borrowing transaction, whichever occurs sooner (the "Balance Due Payment"). The Purchaser's payment of the Balance Due Payment under this Agreement shall fully satisfy the Obligations and cure the Existing Default. Payment of the Balance Due Payment shall not otherwise act as a cure to any other default whether known or unknown at the time of this Agreement. Upon payment of the Balance Due Payment to Sellers, Sellers shall take such actions as are reasonably necessary to lift any liens, security interests or encumbrances in favor of Sellers imposed on Purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.11 Time is of the Essence as to all payments due and owing.

6 EIGHTH AMENDED FORBEARANCE AGREEMENT

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Representations and Warranties</u>. Purchaser represents and warrants as to itself that all representations and warranties relating to it contained in the Transaction Documents are true and correct as of the Effective Date, except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall have been frue and correct in all material respects as of such earlier date. Purchaser further represents and warrants to Sellers as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 <u>Authorization</u>. The execution, delivery, and performance of this Agreement are within its corporate power and have been duly authorized by all necessary corporate action.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 <u>Enforceability</u>. This Agreement constitutes a valid and legally binding Agreement enforceable against Purchaser in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, and similar laws affecting creditors' rights generally and to general principles of equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 <u>No Violation</u>. The execution, delivery, and performance of this Agreement do not and will not (i) violate any law, regulation, or court order to which Purchaser is subject; (ii) conflict with Purchaser's organizational documents; or (iii) result in the creation or imposition of any lien, security interest, or encumbrance on any property of Purchaser, or any of its subsidiaries, whether now owned or hereafter acquired, other than liens in favor of Sellers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4 <u>No Litigation</u>. No action, suit, litigation, investigation, or proceeding of or before any arbitrator or governmental authority is pending or, to the knowledge of Purchaser, threatened by or against or affecting Purchaser or against any of its property or assets with respect to any of the Transaction Documents or any of the transactions contemplated hereby or thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5 <u>No Change</u>. Except as previously disclosed to Sellers, there has been no material adverse change in the business, operations, assets, or financial or other condition of the Purchaser and its subsidiaries taken as a whole.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6 <u>Accuracy of Information</u>. All information provided by Purchaser or any of its agents, is true, correct, and complete in all material respects, as of the date provided and does not contain any untrue statements of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7 <u>Advice of Counsel</u>. Purchaser has freely and voluntarily entered into this Agreement with the advice of legal counsel of its choosing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Covenants</u>. In addition, in order to induce Sellers to forbear from the exercise of their rights and remedies as set forth above, Purchaser hereby covenants and agrees that at all times during the Forbearance Period, unless Sellers otherwise consent in writing, as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 <u>Compliance with Transaction Documents</u>. Purchaser shall continue to perform and observe all covenants, terms, and conditions, and other obligations contained in all of the Transaction Documents and this Agreement.

7 EIGHTH AMENDED FORBEARANCE AGREEMENT

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 <u>Sale of Assets</u>. Purchaser shall not sell, convey, transfer, assign, lease, abandon, or otherwise dispose of any of its assets, tangible or intangible (including but not limited to sale, assignment, discount, or other disposition of accounts, contract rights, or general intangibles with or without recourse), without Sellers' prior written consent. If Sellers grant written consent, Purchaser shall cause Purchaser or other transferee to pay all proceeds of such disposition directly to Sellers for application to the Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 <u>Perfection of Sellers' Liens</u>. Purchaser shall execute and deliver to Sellers such documents and take such actions as Sellers reasonably deem necessary or advisable to perfect or protect the Sellers' security interests, mortgages, or liens granted by Purchaser to Sellers under any of the Transaction Documents or this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4 <u>Other Financial Information</u>. Purchaser shall promptly provide to Sellers such other financial information as Sellers may reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5 <u>Further Assurances</u>. Promptly upon the request of Sellers, Purchaser shall take any and all reasonable actions, and execute and deliver additional documents, that relate to this Agreement and the transactions contemplated herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Release of Claims and Waiver of Defenses</u>. In further consideration of Sellers' execution of this Agreement, Purchaser, on behalf of itself and its successors, assigns, parents, subsidiaries, affiliates, officers, directors, employees, agents, and attorneys hereby forever, fully, unconditionally and irrevocably waives and releases Sellers and their successors, assigns, parents, subsidiaries, affiliates, officers, directors, employees, attorneys, and agents (collectively, the "Releasees") from any and all claims, liabilities, obligations, debts, causes of action (whether at law or in equity or otherwise), defenses, counterclaims, setoffs, of any kind, whether known or unknown, whether liquidated or unliquidated, matured or unmatured, fixed or contingent, directly or indirectly arising out of, connected with, resulting from, or related to any act or omission by any Sellers or any other Releasee with respect to the Transaction Documents and any Collateral, other than any Sellers' or any Releasee's willful acts or omissions, on or before the date of this Agreement (collectively, the "Claims"). Purchaser further agrees that Purchaser shall not commence, institute, or prosecute any lawsuit, action, or other proceeding, whether judicial, administrative, or otherwise, to collect or enforce any Claim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Indemnification</u>. Purchaser hereby expressly acknowledges, agrees, and reaffirms its indemnification obligations to Sellers and the other Indemnified Parties set forth in the Transaction Documents. Purchaser further acknowledges, agrees, and reaffirms that all such indemnification obligations shall survive the expiration of the Forbearance Period and the termination of this Agreement, the Transaction Documents, and the payment in full of the Obligations. Notwithstanding the foregoing, such indemnity shall not be available to the extent that such claims, damages, losses, liabilities, or related expenses result solely from a Lender's or other Indemnified Party's gross negligence or willful misconduct.

8 EIGHTH AMENDED FORBEARANCE AGREEMENT

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Events of Default</u>. The occurrence of one or more of the following shall constitute a "Forbearance Default" under this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1 Purchaser shall fail to abide by or observe any term, condition, covenant, or other provision contained in this Agreement or any document related to or executed in connection with this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2 A default or event of default shall occur under any Transaction Document or any document related to or executed in connection with this Agreement or any of the Transaction Documents (other than the Existing Default).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3 Purchaser:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) becomes insolvent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) is generally not, or is unable to, or admits in writing its
inability to, pay its debts as they become due;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) (i) commences any case, proceeding, or other action under any
existing or future requirement of law relating to bankruptcy, insolvency, reorganization, or other relief of debtors, seeking (A) to
have an order for relief entered with respect to it, or (B) to adjudicate it as bankrupt or insolvent, or (C) reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition, or other relief with respect to it or its debts, or (D) appointment of
a receiver, trustee, custodian, conservator, or other similar official for it or for all or any substantial part of its assets, or (ii)
makes a general assignment for the benefit of its creditors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) has commenced against it in a court of competent jurisdiction
any case, proceeding, or other action of a nature referred to in clause (c) above which (i) results in the entry of an order for relief
or any such adjudication or appointment or (ii) remains undismissed, undischarged, unstayed, or unbonded for 30 days; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) ceases to conduct business in the ordinary course.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4 Any representation or warranty of Purchaser made herein shall be false, misleading, or incorrect in any material respect when made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.5 Purchaser takes an action, or any event or condition occurs or exists, which Sellers reasonably believe in good faith is inconsistent in any material respect with any provision of this Agreement, or impairs, or is likely to impair, the prospect of payment or performance by Purchaser of its obligations under this Agreement or any of the Transaction Documents.

9 EIGHTH AMENDED FORBEARANCE AGREEMENT

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>Remedies</u>. Immediately upon the occurrence of a Forbearance Default, Sellers may pursue any and all of the remedies outlined below or elsewhere provided in this Agreement. No remedy granted herein to Sellers is intended to be exclusive of any other available remedy or remedies. Each and every remedy granted herein is cumulative and in addition to every other remedy given under this Agreement, now or hereafter existing at law or in equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1 The Forbearance Period shall immediately and automatically cease without notice or further action without notice to, or action by, any party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2 Sellers may, in Seller's sole discretion, enter the Confession of Judgment described in Section 3. I (b) as evidence of Sellers' rights as a secured creditor and proof of Purchaser's default under the Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3 Sellers shall be entitled to exercise any or all of their rights and remedies under the Transaction Documents, this Agreement, or any stipulations or other documents executed in connection with or related to this Agreement or any of the Transaction Documents, or applicable law, including, without limitation, the appointment of a receiver.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.4 Purchaser shall cooperate with Sellers' repossession of all of Purchaser's personal property Collateral, which Purchaser shall immediately surrender to Sellers upon Sellers' request, at the time and place designated by Sellers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.5 Sellers may, in their sole discretion, commence foreclosure actions with respect to any real property Collateral and replevin actions with respect to any of the other Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.6 Sellers may set off or apply to the payment of any or all of the Obligations, any deposit balances, any or all of the Collateral or proceeds thereof, or other money now or hereafter owed Sellers by Purchaser.

Sellers may, in Sellers sole discretion, pursue any and all remedies provided ORS Chapter 79, including without limitation any and all self-help remedies therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. Foreclosure Rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1 Pursuant to Section 10.7 above, Purchasers agree that Sellers' foreclosure remedies include, but are not limited to a decree and judgment:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) granting Sellers immediate possession of the Collateral described
above;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) rights and remedies of strict foreclosure of all Collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) ordering Purchasers to surrender the Collateral to Sellers within
ten (10) days of the date of the Confession of Judgment or other judgment is entered;

10 EIGHTH AMENDED FORBEARANCE AGREEMENT

(d) authorizing Sellers to foreclose their security interests in the Collateral and: **●** sell the same in a commercially reasonable manner as permitted by law and apply the proceeds of any sale of the Collateral to the satisfaction of the Confession of Judgment, including all lawful expenses of collection and sale, with any deficiency or surplus to be handled in accordance with applicable law, and/or **●** in Sellers sole discretion retain, possess, and utilize the Collateral for the purposes of continuing its operations or business functions, including without limitation, assuming control of ongoing customer contracts, sales, vendor relationships, managing employees and other activities necessary to maintain business continuity, free and clear of any claim, lien, or right of redemption of the Purchasers and all persons claiming by, through, or under the Purchasers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.2 The Purchasers agree and acknowledge retention and continued use of the collateral by Sellers shall not constitute a breach of duty, nor be construed as a waiver of Sellers' rights under the Confession of Judgment or under applicable law. The Purchasers agree and acknowledge that continuity of operations through retention or acquisition of the collateral is commercially reasonable, promotes mitigation of loss, and is in the interest of judicial efficiency and creditor recovery. The Purchasers agree that net income earned pursuant to business continuity operations shall be applied to the Confession of Judgment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.3 No Obligation to Sell Collateral. Sellers are under no obligation to sell the Collateral to satisfy the debt. Sellers may continue to operate the business in its current form, using the foreclosed assets to generate net revenue to repay the outstanding balance owed by Purchasers under the Confession of Judgment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.4 Valuation of Foreclosed Collateral for Repayment. In the event Purchaser elects to continue operations and the business in lieu of selling the Collateral, the value of the business may be determined by a qualified third-party appraiser appointed by the Sellers, provided that the selection of the appraiser is commercially reasonable. The appraiser shall establish the fair market value of the business, and its assets based on a forced liquidation value. This appraised value shall be applied towards the satisfaction of the debt owed by Purchasers. If the appraised value exceeds the amount owed, the debt shall be considered satisfied, and no further action shall be required by Purchasers. If the appraised value is less than the amount owed, Sellers may continue to operate the business and generate revenue from its operations whereupon net revenue shall be accepted in lieu of the balance of the debt. Purchasers<sup>t</sup> rights to any revenue, surplus, receipts or proceeds from business operations, including profits generated beyond the liquidation value, are hereby deemed to be fully and permanently extinguished.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.5 Waiver of Revenue and Deficit. In the event Purchaser elects to continue operations and the business in lieu of selling the Collateral, Sellers shall retain all revenue generated from the operation of the business beyond the appraised liquidation value of the assets. Purchasers shall have no claim or entitlement to any revenue generated by the business. In exchange for Purchasers waiver, Sellers agree to excuse any remaining deficit or shortfall between the liquidation value and the total amount of the Confession of Judgment.

11 EIGHTH AMENDED FORBEARANCE AGREEMENT

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.6 Optional Sale or Assignment of Business. While Sellers are not required to sell the Collateral, they shall retain the option to sell all or a portion of the Collateral at their sole discretion. Any decision to sell or assign the business or its Collateral to a third party shall be entirely at the discretion of Sellers, but is not necessary for the satisfaction of the debt.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.7 Optional Public Sale: In the event Sellers chooses to sell all or a portion of the Collateral by public sale, which it has sole discretion to do, the Collateral will be sold pursuant to Article 9 of the Uniform Commercial Code. The proceeds of a sale will be applied in the following order: the cost and expense of sale, and then toward the satisfaction of the debt plus costs, disbursements, and reasonable attorney fees as allowed Sellers by a court.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.8 From the day of any sale, strict foreclosure or other disposition of the collateral allowed by the APA, Security Agreements, Forbearance Agreements or the Confession of Judgment by Sellers all Purchasers are forever foreclosed of any and all right, title, lien, interest, or claim in or to the Assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u>Miscellaneous</u>.

<u>Additional Information</u>. Purchaser shall provide to Sellers such additional information regarding Purchaser as Sellers may reasonably request in order to assure or demonstrate compliance with applicable securities law or other laws or for any other legitimate purpose claims and losses arising out of or related to this Agreement. Nothing in this Agreement shall be deemed a waiver, modification, or release of any rights or remedies available to Sellers, including without limitation all rights under the existing Confession of Judgment, which remains in full force and effect. All such rights are expressly reserved.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.1 <u>Governing Law</u>. This Agreement is governed by the laws of the state of Oregon, without giving effect to any conflict-of-law principle that would result in the laws of any other jurisdiction governing this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.2 <u>Attorney Fees</u>. If any suit or action is instituted arising out of or related to this Agreement, including but not limited to any proceeding brought under the United States Bankruptcy Code, the prevailing party on a claim will be entitled to recover with respect to the claim, in addition to any other relief awarded, the prevailing party's reasonable attorney's fees and other fees, costs, and expenses of every kind, including but not limited to the costs and disbursements specified in ORCP 68 A(2), incurred in connection with the arbifration, action, suit, or proceeding, any appeal or petition for review, the collection of any award, or the enforcement of any order, as determined by the arbitrator or court.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3 <u>Survival</u>. The representations, warranties, covenants and agreements made herein shall survive the Forbearance Period for a period of 1 year.

12 EIGHTH AMENDED FORBEARANCE AGREEMENT

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.4 <u>Successors and Assigns</u>. Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.5 <u>Entire Agreement: Amendment</u>. This Agreement, together with the exhibits and other documents delivered pursuant hereto, constitute the entire agreement between the parties with regard to the subject matter hereof. This Agreement or any term hereof may be amended, waived, discharged or terminated solely by a written instrument signed by the Sellers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.6 <u>Severability</u>. If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.7 <u>Titles and Subtitles</u>. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.8 <u>Expenses</u>. Purchaser shall pay all costs and expenses that it incurs with respect to the negotiation, execution, delivery and performance of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.9 <u>Interpretation</u>. The words "will" and "shall" have the same meaning in this Agreement. References in this Agreement to "includes" or "including" mean "including without limitation." The word "or" is not exclusive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.10 <u>Counterparts; Delivery</u>. This Agreement may be (a) executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument, and (b) delivered by transfer of an originally signed document by facsimile, e-mail or other electronic means, any of which will be as fully binding as delivery of an original document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.11 <u>Confidentiality</u>. Purchaser acknowledges that the information provided to it regarding the Sellers is confidential and non-public. Purchaser agrees that all of the information will be kept in confidence and will be neither used to its personal benefit nor disclosed to any third party, but this obligation does not apply to any such information that (a) is part of public knowledge on the date of this Agreement, (b) becomes a part of public knowledge by means other than a breach of this provision, or (c) is received from a third party who did not disclose such information in violation of any obligation of confidentiality he, she or it may have to Sellers.

[SIGNATURE PAGES TO FOLLOW]

13 EIGHTH AMENDED FORBEARANCE AGREEMENT

IN WITNESS WHEREOF, THE PARTIES HERETO HAVE EXECUTED THIS AGREEMENT AS OF THE DATE FIRST ABOVE WRITTEN.

---

| | | |
|:---|:---|:---|
| SELLERS: | KIRKMAN GROUP, INC. | KIRKMAN GROUP, INC. |
|  | By: | */s/ David K. Humphrey* |
|  | Name: | David K. Humphrey |
|  | Title: | President |

---

---

| | |
|:---|:---|
| KIRKMAN LABORATORIES, INC. | KIRKMAN LABORATORIES, INC. |
| By: | */s/ David K. Humphrey* |
| Name: | David K. Humphrey |
| Title: | President |

---

---

| | |
|:---|:---|
| KIRKMAN GROUP INTERNATIONAL, INC. | KIRKMAN GROUP INTERNATIONAL, INC. |
| By: | */s/ David K. Humphrey* |
| Name: | David K. Humphrey |
| Title: | President |

---

---

| | | |
|:---|:---|:---|
| SELLERS' OWNER: | DAVID K. HUMPHREY | DAVID K. HUMPHREY |
|  | By: | */s/ David K. Humphrey* |

---

---

| | | |
|:---|:---|:---|
| SELLERS' AGENT: | DAVID K. HUMPHREY | DAVID K. HUMPHREY |
|  | By:  | */s/ David K. Humphrey* |

---

---

| | | |
|:---|:---|:---|
| PURCHASER: | HTO NEVADA INC. | HTO NEVADA INC. |
| | By: | */s/ Eric Gripentrog* |
| | Name: | Eric Gripentrog |
| | Title: | Chief Executive Officer |

---

---

| | | |
|:---|:---|:---|
| FUNCTIONAL BRANDS INC: | FUNCTIONAL BRANDS INC. | FUNCTIONAL BRANDS INC. |
| | By: | */s/ Eric Gripentrog* |
| | Name: | Eric Gripentrog |
| | Title: | Chief Executive Officer |

---

14 EIGHTH AMENDED FORBEARANCE AGREEMENT

## Exhibit 23.1

**Exhibit 23.1**

![](ex23-1_001.jpg)

Consent of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Functional Brands, Inc.

We hereby consent to the inclusion in this Registration Statement of Functional Brands, Inc. (the "Company") on Amendment No. 10 of the Form S-1 of our report dated March 27, 2025 except for Notes 4 and 24, as to which the date is August 12, 2025 with respect to our audit of the Company's consolidated financial statements as of and for the years ended December 31, 2024 and 2023. Our report contains an explanatory paragraph regarding the Company's ability to continue as a going concern.

We also consent to the reference to our Firm under the caption "Experts" in such prospectus.

![](ex23-1_002.jpg)

Diamond Bar, California

September 3, 2025