# EDGAR Filing Document

**Accession Number:** 0001748441
**File Stem:** 0001493152-25-016411
**Filing Date:** 2025-10
**Character Count:** 160028
**Document Hash:** 7a40b845883704ccc0ecb5fd4b815f0e
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-25-016411.hdr.sgml**: 20251001

**ACCESSION NUMBER**: 0001493152-25-016411

**CONFORMED SUBMISSION TYPE**: 1-SA

**PUBLIC DOCUMENT COUNT**: 2

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20251001

**DATE AS OF CHANGE**: 20250930

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** MODE MOBILE, INC.
- **CENTRAL INDEX KEY:** 0001748441
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374]
- **ORGANIZATION NAME:** 06 Technology
- **EIN:** 473902362
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 1-SA
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 24R-00968
- **FILM NUMBER:** 251362097

**BUSINESS ADDRESS:**
- **STREET 1:** ONE EAST ERIE STREET
- **STREET 2:** SUITE 525
- **CITY:** CHICAGO
- **STATE:** IL
- **ZIP:** 60611
- **BUSINESS PHONE:** 847-999-8739

**MAIL ADDRESS:**
- **STREET 1:** ONE EAST ERIE
- **STREET 2:** SUITE 525
- **CITY:** CHICAGO
- **STATE:** IL
- **ZIP:** 60611

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Nativ Mobile, LLC
- **DATE OF NAME CHANGE:** 20180730

**UNITED STATES** 

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549** 

**FORM 1-SA** 

**SEMI-ANNUAL REPORT** 

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

**For the six-months ended June 30, 2025**

**Mode Mobile, Inc.**

**(Exact name of issuer as specified in its charter)** 

**Commission File Number: <u>024-12419</u>**

---

| | |
|:---|:---|
| **Delaware** | **47-3902362** |
| **State or other jurisdiction** <br> **of incorporation or organization**  | **(I.R.S. Employer**<br> **Identification No.)**  |

---

**1 East Erie Street, Suite 525 #342 Chicago, IL 60611**

**(Full mailing address of principal executive offices)** 

**<u>847-999-8739</u>**

**(Issuer's telephone number, including area code)** 

In this semi-annual report, the terms "<u>Mode Mobile</u>", "<u>Mode</u>", "<u>we</u>", "<u>us</u>", "<u>our</u>", or "t<u>he Company</u>" refers to Mode Mobile, Inc. and Current (Gibraltar) Limited on a consolidated basis, unless the context indicates otherwise.

THIS SEMI-ANNUAL REPORT MAY CONTAIN FORWARD-LOOKING STATEMENTS AND INFORMATION RELATING TO, AMONG OTHER THINGS, THE COMPANY, ITS BUSINESS PLAN AND STRATEGY, AND ITS INDUSTRY. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON THE BELIEFS OF, ASSUMPTIONS MADE BY, AND INFORMATION CURRENTLY AVAILABLE TO THE COMPANY'S MANAGEMENT. WHEN USED IN THE OFFERING MATERIALS, THE WORDS "ESTIMATE," "PROJECT," "BELIEVE," "ANTICIPATE," "INTEND," "EXPECT" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. THESE STATEMENTS REFLECT MANAGEMENT'S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE THE COMPANY'S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE.

**Item 1.** **Management's Discussion and Analysis of Financial Condition and Results of Operations** 

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes included in this semi-annual report and our annual report filed on Form 1-K on April 30, 2025. The following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements.

The unaudited financial information set forth below with respect to Interim 2025 is preliminary and subject to potential adjustments. Adjustments to these financial statements may be identified when a review of our historical financial statements has been completed in conjunction with our year-end audit, which could result in significant differences from this preliminary unaudited financial information, although, in the opinion of management, all adjustments necessary to make interim results of operations not misleading have been included here. Unless otherwise indicated, the latest results discussed below are as of June 30, 2025.

**Operating Results**

For the six-months ended June 30, 2025 ("<u>Interim 2025</u>"), the Company recognized $9,168,267 in revenue, compared to $6,005,664 for the six-months ended June 30, 2024 ("<u>Interim 2024</u>"), representing a period over period increase of 53%. The Company also recognized $505,405 in costs of net revenue in Interim 2025, compared with $662,820 for Interim 2024, representing a 24% decrease. Finally, the Company saw gross profit of $8,662,862 and gross margin of 94% for Interim 2025, compared to gross profit of $5,342,829 and gross margin of 89% for Interim 2024. This improvement in revenue, gross margin, and gross profit for Interim 2025 compared to Interim 2024 were the result of the Company's efforts to cut less profitable market and customer segments, which led to reduced costs in Interim 2025 compared to Interim 2024, and also realization of revenue streams from the launch of new, more profitable products, including the Mode Earn Club, which launched in 2023. Additionally in January 2025, the Company acquired the Applock app, which was yet another reason the Company saw a period over period increase in revenue.

Mode's operating expenses primarily consist of customer acquisition costs, employee and contractor compensation related to software development and general and administrative expenses. For Interim 2025, total operating expenses were $9,724, 0158 compared to $7,640,405 for Interim 2024, representing a period over period increase of 27%. This increase was primarily related to a 33% increase in sales and marketing expenses, which increased from $3,222,263 for Interim 2024 to $4,297,627 for Interim 2025, as the Company increased its user acquisition efforts. Additionally, general and administrative expenses increased by 67% from $2,037,021 for Interim 2024 to $3,393,917 for Interim 2025 as the Company made additional hires and increased infrastructure costs to support its expanded product offerings. Finally, the Company recognized research and development expenses of $2,032,470 for Interim 2025, compared to $2,381,121 for Interim 2024, representing a 15% decrease, as the Company scaled product development efforts back slightly.

Additionally, the Company recognized other income of $259,039 for Interim 2025, as compared to other income of $360,941 for Interim 2024, representing a period over period decrease of 28%. This decrease was primarily related to reduced gains on crypto currency assets that the Company recognized in 2024.

As a result of the above, the Company recognized a net loss of $802,114 for Interim 2025, which was a 59% improvement in net loss of $1,936,620 for Interim 2024.

**Liquidity and Capital Resources**

As of June 30, 2025, Mode's cash-on-hand was $15,984,812 compared to $6,886,520 as of December 31, 2024.

While our current assets exceed our current liabilities by $15,318,085 as of June 30, 2025, the Company is still reliant on investor financing to support its operations. In addition to the Regulation A launched on July 25, 2024, the Company anticipates undertaking new offerings of securities to investors in 2025 utilizing Regulation CF and/or Regulation A. In August 2025, the Company closed its Regulation A financing round, raising approximately $48,000,000 in gross proceeds. Additionally, as of the of date of this semi-annual report, the Company has three active fundraising rounds pursuant to Regulation CF, Rule 506(c) of Regulation D, and Regulation S, and has raised approximately $4,800,000, $6, 5000,000, and $1,600,000, respectively, pursuant to these offerings as of the date of this semi-annual report.

Additionally, on January 24, 2025, the Company closed on $5,000,000 of debt financing to acquire a mobile app, Applock, that will integrate into the Mode Mobile ecosystem. The debt has an interest rate equal to the greater of (i) 13.25% interest per annum or 8.50% + SOFR (Secured Overnight Financing Rate). The debt will be paid based on the following schedule: interest-only payments for the first 6 months, then thirty monthly payments of $166,666 plus interest thereafter. The debt is secured by the assets of the Company, the Company must comply with certain financial covenants while the debt is outstanding, including maintaining at least $4.5 million in cash, and maintaining minimum revenue and EBITDA thresholds. The Company believes these requirements do not constrain or burden the Company's operations.

In addition, as a condition of the debt financing, the Company has issued a warrant to the lender to acquire up to 6,000,000 shares of the Company's Class AAA Common Stock. The warrant may be exercised at a price of $0.125 per share and expires on January 24, 2032. A copy of this warrant is filed as exhibit 3.6 to this semi-annual report.

Over the next 6-12 months, the Company expects to rely on external financing, including equity financing and debt, to fund operations, growth, and its acquisition strategy.

**Trend Information**

During the remainder of 2025, the Company continues to focus on scale and engagement. We will invest in more profitable revenue initiatives, including App Lock, Mode Earn Club, as well as expanding into international markets. At the same time, we will invest in our product quality, infrastructure costs, and expanded product offerings. The Company continues to pursue an acquisition strategy to acquire other mobile apps and mobile focused technologies.

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**Item 3.** **Financial Statements** 

**MODE MOBILE, INC.**

**CONSOLIDATED FINANCIAL STATEMENTS**

**JUNE 30, 2025**

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**MODE MOBILE, INC.**

**TABLE OF CONTENTS**

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| | |
|:---|:---|
|  | **Page** |
| &nbsp;&nbsp;&nbsp;[Consolidated Balance Sheets as of June 30, 2025 (unaudited) and December 31, 2024 (audited)](#F_001) | 4 |
| &nbsp;&nbsp;&nbsp;[Consolidated Statements of Operations and Comprehensive Income/(Loss) for the six months ended June 30, 2025 and 2024 (unaudited)](#F_002) | 5 |
| &nbsp;&nbsp;&nbsp;[Consolidated Statements of Changes in Stockholders' Equity for the six months ended June 30, 2025 and 2024 (unaudited)](#F_003) | 6 |
| &nbsp;&nbsp;&nbsp;[Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and 2024 (unaudited)](#F_004) | 7 |
| &nbsp;&nbsp;&nbsp;[Notes to Consolidated Financial Statements](#F_005) | 8 |

---

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**MODE MOBILE, INC.**

**CONSOLIDATED BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br>**2025** | **December 31,**<br>**2024** |
| **ASSETS** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $15984812 | $6886520 |
| &nbsp;&nbsp;&nbsp;Accounts receivable | 3888350 | 2528982 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 2429857 | 532059 |
| &nbsp;&nbsp;&nbsp;Subscription receivable |  | 332783 |
| &nbsp;&nbsp;&nbsp;Other receivables | 79371 | 79371 |
| &nbsp;&nbsp;&nbsp;Inventory | 23858 | 230431 |
| &nbsp;&nbsp;&nbsp;Deferred offering costs | - | 4454737 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 22406248 | 15044883 |
| Property, equipment and other assets: |  |  |
| &nbsp;&nbsp;&nbsp;Property and equipment, net | 17464 | 13277 |
| &nbsp;&nbsp;&nbsp;Intangible assets, net | 9804014 |  |
| &nbsp;&nbsp;&nbsp;Cryptocurrency assets | 9981 | 12531 |
| &nbsp;&nbsp;&nbsp;Nonfungible token assets | 51060 | 51060 |
|  | 9882518 | 76868 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $32288766 | $15121751 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $2667129 | $1461512 |
| &nbsp;&nbsp;&nbsp;Accrued expenses and other current liabilities | 4421033 | 3055817 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 7088162 | 4517329 |
| &nbsp;&nbsp;&nbsp;Loan payable | 5000000 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 12088162 | 4517329 |
| Commitments and contingencies |  |  |
| Stockholders' equity: |  |  |
| &nbsp;&nbsp;&nbsp;Preferred stock, $0.0001 par value, 388,800,000 shares authorized, 353,712,906 shares issued and outstanding as of June 30, 2025 and December 31, 2024, liquidation preference of $4,759,840 as of both June 30, 2025 and December 31, 2024 | 34566 | 35371 |
| &nbsp;&nbsp;&nbsp;Class A common stock, $0.0001 par value, 2,125,000,000 shares authorized, 627,870,232 and 646,825,014 shares issued and outstanding as of June 30, 2025 and December 31, 2024 | 62788 | 64683 |
| &nbsp;&nbsp;&nbsp;Class B common stock, $0.0001 par value, 268,000,000 shares authorized, 20,749,794 and 20,737,172 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively | 2075 | 2073 |
| &nbsp;&nbsp;&nbsp;Class C common stock, $0.0001 par value, 12,150,000 shares authorized,10,946,911 and, 10,993,629 shares issued and outstanding as of June 30, 2025 and December 31, 2024 | 1094 | 1099 |
| &nbsp;&nbsp;&nbsp;Class AAA common stock, $0.0001 par value, 600,000,000 shares authorized, 422,521,070 and 149,320,399 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively | 42242 | 14932 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 28586414 | 18212726 |
| &nbsp;&nbsp;&nbsp;Treasury stock | (150000) | (150000) |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (8378576) | (7576463) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 20200603 | 10604422 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity | $32288766 | $15121751 |

---

See accompanying notes, which are an integral part of these consolidated financial statements

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**MODE MOBILE, INC.**

**CONSOLIDATED STATEMENT OF OPERATION AND COMPREHENSIVE INCOME**

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended** | **Six Months Ended** |
|  | **June 30,** | **June 30,** |
|  | **2025** | **2024** |
| Net revenues | $9168267 | $6005664 |
| Cost of net revenues | 505405 | 662820 |
| &nbsp;&nbsp;&nbsp;Gross profit | 8662862 | 5342843 |
| Operating expenses: |  |  |
| &nbsp;&nbsp;&nbsp;Sales and marketing | 4297627 | 3222263 |
| &nbsp;&nbsp;&nbsp;Research and development | 2032470 | 2381121 |
| &nbsp;&nbsp;&nbsp;General and administrative | 3393917 | 2037021 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 9724015 | 7640405 |
| Loss from operations | (1061152) | (2297561) |
| Other income (expense), net: |  |  |
| &nbsp;&nbsp;&nbsp;Realized gains (losses) on cryptocurrency sales |  | 319750 |
| &nbsp;&nbsp;&nbsp;Other income | 259039 | 41191 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income (expense), net | 259039 | 360941 |
| Provision for income taxes | - | - |
| Net loss | $(802114) | $(1936620) |
| Weighted average common shares outstanding - basic and diluted | 1082384886 | 741579207 |
| Net income (loss) per common share - basic and diluted | $(0.001) | $(0.003) |

---

See accompanying notes, which are an integral part of these consolidated financial statements

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**MODE MOBILE, INC.**

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

---

| | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Series Seed** | **Series Seed** | **Common Stock** | **Common Stock** | **Common Stock** | **Common Stock** | **Common Stock** | **Common Stock** | **Common Stock** | **Common Stock** | | | | |
|  | **Preferred Stock** | **Preferred Stock** | **Class A** | **Class A** | **Class B** | **Class B** | **Class C** | **Class C** | **Class AAA** | **Class AAA** | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Additional**<br>**Paid-in**<br>**Capital** |<br>**Treasury**<br>**Stock** |<br>**Accumulated**<br>**Deficit** | **Total**<br>**Stockholders'**<br>**Equity** |
| **Balances at December 31, 2023** | 353712906 | $35371 | 646825014 | $64683 | 9962438 | $996 | 10993629 | $1099 | 60980343 | $6098 | $8426006 | $(150000) | $(4318480) | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4065773 |
| Issuance of Class AAA common stock pursuant to Regulation CF offering |  |  |  |  |  |  |  |  | 17489936 | 1749 | 877938 |  |  | 879687 |
| Exercise of options |  |  |  |  | 8145629 | 815 |  |  |  |  | 8667 |  |  | 9481 |
| Stock-based compensation |  |  |  |  |  |  |  |  |  |  | 373503 |  |  | 373503 |
| Offering costs |  |  |  |  |  |  |  |  |  |  | (260760) |  |  | (260760) |
| Net loss | - | - | - | - | - | - | - | - | - | - | - | - | (1936620) | (1936620) |
| **Balances at June 30, 2024** | 353712906 | $35371 | 646825014 | $64683 | 18108067 | $1811 | 10993629 | $1099 | 78470279 | $7847 | $9425353 | $(150000) | $(6255101) | $3131063 |
| **Balances at December 31, 2024** | 353712906 | $35371 | 646825014 | $64683 | 20737172 | $2073 | 10993629 | $1099 | 149320399 | $14932 | $18212726 | $(150000) | $(7576463) | $10604422 |
| Issuance of Class AAA common stock pursuant to Regulation CF and A offering |  |  |  |  |  |  |  |  | 244539923 | 24454 | 30610574 |  |  | 30635027 |
| Conversion of preferred and common shares into Class AAA common shares | (8053255) | (805) | (18954782) | (1895) | (1505993) | (151) | (46718) | (5) | 28660748 | 2856 |  |  |  |  |
| Exercise of options |  |  |  |  | 1518615 | 152 |  |  |  |  | 12363 |  |  | 12515 |
| Stock-based compensation |  |  |  |  |  |  |  |  |  |  | 427439 |  |  | 427439 |
| Offering costs |  |  |  |  |  |  |  |  |  |  | (20676687) |  |  | (20676687) |
| Net loss | - | - | - | - | - | - | - | - | - | - |  | - | (802114) | (802114) |
| **Balances at June 30, 2025** | 345659651 | $34566 | 627870232 | $62788 | 20749794 | $2075 | 10946911 | $1094 | 422521070 | $42242 | $28586414 | $(150000) | $(8378576) | $20200603 |

---

See accompanying notes, which are an integral part of these consolidated financial statements.

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**MODE MOBILE, INC.**

**CONSOLIDATED STATEMENTS OF CASH FLOWS** 

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended** | **Six Months Ended** |
|  | **June 30,** | **June 30,** |
|  | **2025** | **2024** |
| **Cash flows from operating activities:** |  |  |
| Net loss | $(802114) | $(1936620) |
| Adjustments to reconcile net loss to net cash provided used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Amortization of intangibles | 435986 |  |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 4000 | 2106 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation | 427439 | 373503 |
| &nbsp;&nbsp;&nbsp;Realized gains on cryptocurrency sales |  | (319750) |
| &nbsp;&nbsp;&nbsp;Loss on disposal of assets |  | 11097 |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (1359368) | (427423) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | (1774859) | 20451 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory | 206574 | 104466 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 1205418 | 234568 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other current liabilities | 1365216 | 137615 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities | (291708) | (1799987) |
| **Cash flows from investing activities:** |  |  |
| Proceeds from cryptocurrency sales | 2750 | 518229 |
| Purchase of property and equipment | (8186) | (7257) |
| Purchase of intangible asset | (6583781) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by investing activities | (6589217) | 510972 |
| **Cash flows from financing activities:** |  |  |
| Loan proceeds | 4877061 |  |
| Deferred offering costs |  | (782279) |
| Issuance of common stock, net of offering costs | 11102156 | 618928 |
| Exercise of options | - | 9482 |
| Net cash used in financing activities | 15979217 | (153869) |
| **Net change in cash and cash equivalents** | 9098293 | (1442884) |
| Cash and cash equivalents at beginning of period | 6886520 | 2524045 |
| Cash and cash equivalents at end of period | $15984813 | $1081161 |
| **Supplemental disclosure of cash flow information:** |  |  |
| Cash paid for income taxes | $- | $- |
| Cash paid for interest | $- | $- |
| **Supplemental disclosure of cash flow information:** |  |  |
| Non cash purchase of intangible asset | $3656219 | $- |
| Purchase of cryptocurrency | $200 | $190430 |

---

See accompanying notes, which are an integral part of these consolidated financial statements

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**MODE MOBILE, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**As of June 30, 2025**

**1.** **NATURE OF OPERATIONS** 

Mode Mobile, Inc. (collectively, the "Company" or "Mode Mobile") is a technology company that operates the Mode EarnOS enabling users the ability to earn rewards on a single platform for interacting with digital content on their smartphones. The Company also offers the Mode EarnPhone, a smartphone embedded with the Company's EarnOS software for a more integrated and enhanced earnings experience. The consolidated financial statements consist of the following entities (each an "Entity", collectively the "Entities"):

● Mode Mobile, Inc., a Delaware Corporation organized on April 23, 2015. Mode Mobile, Inc. is a holding company which owns 100% of Mode Mobile, LLC's membership interests. Mode Mobile, Inc. was previously known as Nativ Mobile Inc. before a name change on October 25, 2022 and prior to that, was known as Nativ Mobile, LLC before a name change on February 25, 2021.

● Mode Mobile, LLC, a Delaware Limited Liability Company organized on April 25, 2017 and is a 100% wholly owned subsidiary of Mode Mobile, Inc. Mode Mobile, LLC was organized to develop an earnings ecosystem where users would be rewarded for their time, attention and data. Mode Mobile, LLC was previously known as Current Mobile, LLC before a name change on February 4, 2022 and prior to that, was known as Current Media, LLC before a name change on March 10, 2021.

● Mode Phone, LLC, an Illinois Limited Liability Company organized on November 10, 2020 and is a 100% wholly owned subsidiary of Mode Mobile, Inc. Mode Phone, LLC was organized to build out and support the Company's smartphone business, which focuses on the marketing and distribution of the Mode Earn Phone.

● Current (Gibraltar) Limited ("CGL"), a Gibraltar Company organized on June 19, 2018. The Entity was organized to develop a rewards protocol, the purpose of which is intended to be used as a rewards distribution mechanism through a deep partnership with Mode Mobile and its user base. Mode Mobile, Inc has 100% voting rights and 0% economic rights to CGL.

The above entity structure has been in effect since February 25, 2021, on which date the Company consummated a corporate reorganization transaction (the "Reorganization") where, among other things, Mode Mobile, Inc. converted its corporate status from a limited liability company to a C-corporation and became a holding company for the Company's operating entities. Prior to the consummation of the corporate reorganization transaction, MobileX Labs, LLC, a now-defunct Indiana limited liability company formed in 2012, served as the entity through which all profits and losses ultimately flowed for tax purposes. On the effective date of the corporate reorganization, MobileX Labs, LLC was dissolved in accordance with applicable state law. The primary purpose of the corporate reorganization was to align the investments of the now-existing preferred stockholders into one single entity.

**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

***Basis of Presentation***

 **

The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America ("GAAP"). The Company's fiscal year is December 31.

The consolidated financial statements have been presented to reflect the capital structure per the Reorganization on a retroactive basis.

***Principles of Consolidation***

 ****

These consolidated financial statements include the accounts of Mode Mobile and its subsidiaries Mode Mobile, LLC, Mode Phone, LLC and CGL. All intercompany transactions and balances have been eliminated in consolidation.

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The Company evaluates its relationships with other entities to identify whether they are variable interest entities ("VIE") as defined by Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 810, Consolidation ("ASC 810"), and to assess whether it is the primary beneficiary of such entities. If the determination is made that the Company is the primary beneficiary, then that entity is consolidated.

***Reverse Stock Split***

 ****

On February 28, 2023, the Board of Directors approved a 162-for-1 forward stock split of its issued and outstanding shares of common and preferred stock. Accordingly, all share and per share amounts for all periods presented in the accompanying consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this forward stock split.

***Use of Estimates***

The preparation of the Company's consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the valuations of common stock, amortization of performance obligation liabilities and valuation of cryptocurrency assets. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates.

 ****

***Concentrations of Credit Risk***

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in financial institutions, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. As of June 30, 2025 and December 31, 2024, the Company had not experienced losses on these accounts and held uninsured deposit amounts of $15,984,812 and $6,886,520 respectively.

 ****

***Cash and Cash Equivalents***

The Company considers all highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents.

 ****

***Fair Value Measurements***

Certain assets and liabilities of the Company are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

● Level 1—Quoted prices in active markets for identical assets or liabilities.

● Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

● Level 3—Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The carrying values of the Company's assets and liabilities approximate their fair values.

 ****

***Accounts Receivable***

The Company's account receivables are due from customers primarily due to the Company's marketing revenue. The Company also maintains allowances for doubtful accounts for estimated losses resulting from the inability of the Company's customers to make payments. The Company periodically reviews these estimated allowances, including an analysis of the customers' payment history and creditworthiness, the age of the trade receivable balances and current economic conditions that may affect a customer's ability to make payments as well as historical collection trends for its customers as a whole. Based on this review, the Company specifically reserves for those accounts deemed uncollectible or likely to become uncollectible. When receivables are determined to be uncollectible, principal amounts of such receivables outstanding are deducted from the allowance. As of June 30, 2025 and December 31, 2024, there was a $3,888,350 and $2,528,982 respectively, allowance for doubtful accounts.

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***Inventory***

 ****

The Company's inventory consists of finished goods pertaining to the Company's hardware phones. The inventory is valued at the lower of cost (weighted-average) or estimated net realizable value. As of June 30, 2025 and December 31, 2024, the Company had deposits for future inventory of $0 and $0 respectively, which was included in prepaid expenses and other current assets on the consolidated balance sheets. Inventory balances are evaluated for excess quantities and obsolescence on a regular basis by analyzing estimated demand, inventory on hand, sales levels and other information and reduce inventory balances to net realizable value for excess and obsolete inventory based on this analysis. At the point of the write-down recognition, a new, lower cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. Management believes there was no impairment of inventory as of both June 30, 2025 and December 31, 2024.

***Property and Equipment, Net***

Property and equipment are stated at cost less accumulated depreciation and amortization. Property and equipment consists of computer equipment, furniture and fixtures and office equipment, and depreciation expense is recognized using the straight-line method over the estimated useful life of five years for computer equipment, seven years for furniture and fixtures, and five to fifteen years for office equipment.

When assets are retired or otherwise disposed of, the cost, accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is reflected in the consolidated statements of operations in the period realized. Maintenance and repairs that do not enhance or extend the asset's useful life are charged to operating expenses as incurred.

The following is a summary of property and equipment:

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br>**2025** | **December 31,**<br>**2024** |
| Computer equipment | $28171 | $19985 |
| Less: Accumulated depreciation | (10707) | (6708) |
| &nbsp;&nbsp;&nbsp;Property and equipment, net | $17464 | $13277 |

---

Depreciation expense was $4,000 and $2,106 for the six months ended June 30, 2025 and 2024 respectively.

 ****

***Impairment of Long-Lived Assets***

The Company evaluates the recoverability of the carrying value of long-lived assets held and used in its operations for impairment on at least an annual basis or whenever events or changes in circumstances indicate that their carrying value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future net cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. These projected future cash flows may vary significantly over time as a result of increased competition, changes in technology, fluctuations in demand, consolidation of its customers and reductions in average sales prices. If the carrying value is determined not to be recoverable from future operating cash flows, the asset is deemed impaired, and an impairment loss is recognized to the extent the carrying value exceeds the estimated fair value of the asset. The fair value of the asset or asset group is based on market value when available, or when unavailable, on discounted expected cash flows.

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***Intangible Assets***

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Intangible assets are amortized over the respective estimated lives, unless the lives are determined to be indefinite and reviewed for impairment whenever events or other changes in circumstances indicate that the carrying amount may not be recoverable. Impairment testing compares carrying values to fair values and, when appropriate, the carrying value of these assets is reduced to fair value. Impairment charges, if any, are recorded in the period in which the impairment is determined.

*Intellectual Property*

 

Intangible assets, with a cost of $227,807, consist of mobile charge screens and monetization software, pursuant to an asset acquisition. The assets are amortized over a useful life of three years. As of June 30, 2025 intangible assets, net of accumulated amortization of $227,807, was $0.

*Digital Assets – Cryptocurrencies and Nonfungible Tokens*

The Company initially records cryptocurrency and nonfungible tokens ("NFTs") when received at cost, and subsequently adjusts each reporting period to the lower of cost or fair value. The Company recognizes an impairment charge on these assets arising from decreases in market value based upon Level 2 inputs (see Note 4), being actively traded exchange's closing prices at each reporting date, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Such impairment in the value of cryptocurrencies and NFTs are recorded in the consolidated statements of operations.

During the six months ended June 30, 2025 and 2024, no impairment related to its NFTs was recorded.

The Company realizes gains and losses upon sale or transfer of cryptocurrencies and NFTs, and are recorded under other income (expense) in the consolidated statements of operations. The Company uses cryptocurrencies to convert cryptocurrency holdings to other cryptocurrencies and US dollars as needed to fund operations. The gains and losses recognized from non-cash transactions are reflected as adjustments to reconcile to operating cash flows in the consolidated statements of cash flows.

***Software Development Costs***

The Company expenses software development costs as incurred. Such software development costs have been reflected as a reduction to the SAFT performance obligation.

***Revenue Recognition***

The Company adopted ASU 2014-09, *Revenue from Contracts with Customers*, and its related amendments (collectively known as "ASC 606"), effective January 1, 2019 using the modified retrospective transition approach applied to all contracts. Therefore, the reported results for the years ended December 31, 2024 and 2023 reflect the application of ASC 606. Management determined that there were no retroactive adjustments necessary to revenue recognition upon the adoption of the ASU 2014-09. The Company determines revenue recognition through the following steps:

● Identification of a contract with a customer;

● Identification of the performance obligations in the contract;

● Determination of the transaction price;

● Allocation of the transaction price to the performance obligations in the contract; and

● Recognition of revenue when or as the performance obligations are satisfied.

Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. As a practical expedient, the Company does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between customer payment and the transfer of goods or services is expected to be one year or less.

The Company's Mode Earn App enables users the ability to earn rewards on a single platform for interacting with digital content on their smartphones. Mode Mobile drives user engagement and monetizes user activity primarily through digital marketing revenue from advertising partners (including ad networks, ad exchanges, and brand partners). The Company satisfies performance obligations and recognizes revenue over time.

The Company also generates revenue from proof-of-concept phone hardware sales. Control transfers at a point in time, and as such, revenue is recognized upon shipment. This includes the transfer of legal title, physical possession, the risks and rewards of ownership, and customer acceptance. For proof-of-concept subscriptions, control transfers over time, and as such, revenue is recognized on a straight-line basis.

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Revenue by source consisted of the following for the six months ended June 30, 2025 and 2024:

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| | | |
|:---|:---|:---|
|  | **Six Months Ended** | **Six Months Ended** |
|  | **June 30,** | **June 30,** |
|  | **2025** | **2024** |
| Advertising and software subscriptions | $9148844 | $5319927 |
| Other (including hardware) | 19423 | 685737 |
| &nbsp;&nbsp;&nbsp;Net revenues | $9168267 | $6005664 |

---

***Contract Balances***

The Company invoices customers based upon contractual billing schedules, and accounts receivable are recorded when the right to consideration becomes unconditional. Contract liabilities represent prepayments received in advance of performance obligations met.

As of June 30, 2025, and 2024, the Company has deferred revenue of $82,105 and $30,212.

***Cost of Net Revenues***

Cost of net revenues consists primarily of user redemptions on the Mode Earn App. The Company shares a portion of generated revenue with users and also facilitates earnings and savings for users directly from advertising brands. Monthly user redemption costs represent the dollar value of rewards redeemed by users that are paid out by the Company. Cost of net revenues also includes hosting costs, as well as the product and related fulfillment costs of hardware products sold.

Cost of net revenue by source consisted of the following for the six months ending June 30, 2025, and 2024:

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| | | |
|:---|:---|:---|
|  | **Six Months Ended** | **Six Months Ended** |
|  | **June 30,** | **June 30,** |
|  | **2025** | **2024** |
| Advertising | $2001104 | $1392903 |
| Other (including hardware) | 241468 | 294226 |
| &nbsp;&nbsp;&nbsp;Cost of net revenues | $2242571 | $1687129 |

---

***Advertising and Promotion***

Advertising and promotional costs are expensed as incurred. Advertising costs were approximately $1,595,017 and $1,374,000 for the six months ended June 30, 2025, and 2024, respectively, and are included in sales and marketing expenses in the consolidated statements of operations.

***Research and Development Costs***

Costs incurred in the research and development of the Company's technology and products are expensed as incurred.

***General and Administrative Expenses***

General and administrative expenses consist primarily of payroll and payroll-related benefits and taxes, professional services, administrative expenditures, and information technology.

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***Accounting for Preferred Stock***

ASC 480, *Distinguishing Liabilities from Equity*, includes standards for how an issuer of equity (including equity shares issued by consolidated entities) classifies and measures on its consolidated balance sheet certain financial instruments with characteristics of both liabilities and equity.

Management is required to determine the presentation for the preferred stock as a result of the redemption and conversion provisions, among other provisions in the agreement. Specifically, management is required to determine whether the embedded conversion feature in the preferred stock is clearly and closely related to the host instrument, and whether the bifurcation of the conversion feature is required and whether the conversion feature should be accounted for as a derivative instrument. If the host instrument and conversion feature are determined to be clearly and closely related (both more akin to equity), derivative liability accounting under ASC 815, *Derivatives and Hedging*, is not required. Management determined that the host contract of the preferred stock is more akin to equity, and accordingly, liability accounting is not required by the Company. The Company has presented preferred stock within stockholders' equity.

Costs incurred directly for the issuance of the preferred stock are recorded as a reduction of gross proceeds received by the Company, resulting in a discount to the preferred stock. The discount is not amortized.

 ****

***Accounting for Equity Units***

Financial instruments issued by the Company are classified as equity only to the extent that they do not meet the definition of a financial liability or financial asset. The Company's common shares are classified as equity instruments. Common shares issued for consideration other than cash are valued at the fair value of the assets received or the services rendered. If the fair value of the assets received or services rendered cannot be reliably measured, common shares issued for consideration will be valued at their fair value on the date of issuance.

***Stock-Based Compensation***

 ****

The Company measures all stock-based awards granted to employees and directors based on the fair value on the date of the grant and recognizes compensation expense for those awards over the requisite service period, which is generally the vesting period of the respective award. The Company issues stock-based awards with only service-based vesting conditions and records the expense for these awards using the straight-line method. For awards with performance-based vesting conditions, the Company records the expense if and when the Company concludes that it is probable that the performance condition will be achieved.

The Company classifies stock-based compensation expense in its statement of operations in the same manner in which the award recipient's payroll costs are classified or in which the award recipient's service payments are classified.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The Company historically has been a private company and lacks company-specific historical and implied volatility information for its stock. Therefore, it estimates its expected stock price volatility based on the historical volatility of publicly traded peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. The expected term of the Company's stock options has been determined utilizing the "simplified" method for awards that qualify as "plain-vanilla" options. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends on common stock and does not expect to pay any cash dividends in the foreseeable future. The Company recognizes forfeitures as they occur as there is insufficient historical data to accurately determine future forfeitures rates. Determining the appropriate fair value of stock-based awards requires the input of subjective assumptions. The assumptions used in calculating the fair value of stock-based awards represent management's best estimates and involve inherent uncertainties and the application of management's judgment. As a result, if factors change and management uses different assumptions, stock-based compensation expense could be materially different for future awards.

The Company records an expense for stock issued for services as an expense based on the number of shares issued and fair value of the underlying stock issued to the recipient.

 ****

***Deferred Offering Costs***

The Company complies with the requirements of FASB ASC 340-10-S99-1 with regards to offering costs. Prior to the completion of an offering, offering costs are capitalized. The deferred offering costs are charged to additional paid-in capital or as a discount to debt, as applicable, upon the completion of an offering or to expense if the offering is not completed.

As of June 30, 2025, and December 31, 2024, the Company had capitalized $0 and $4,454,737 in deferred offering costs, respectively.

 ****

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 ****

***Income Taxes***

The Company uses the liability method of accounting for income taxes as set forth in ASC 740, Income Taxes. Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse. A valuation allowance is recorded when it is unlikely that the deferred tax assets will not be realized. The Company assesses its income tax positions and records tax benefits for all years subject to examination based upon the evaluation of the facts, circumstances and information available at the reporting date. In accordance with ASC 740-10, for those tax positions where there is a greater than 50% likelihood that a tax benefit will be sustained, the Company's policy will be to record the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is less than 50% likelihood that a tax benefit will be sustained, no tax benefit will be recognized.

***Leases***

 ****

On January 1, 2022, the Company adopted ASC 842, Leases, as amended, which supersedes the lease accounting guidance under Topic 840, and generally requires lessees to recognize operating and finance lease liabilities and corresponding right-of-use (ROU) assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from lease arrangements. The Company adopted the new guidance using a modified retrospective method. Under this method, the Company elected to apply the new accounting standard only to the most recent period presented, recognizing the cumulative effect of the accounting change, if any, as an adjustment to the beginning balance of retained earnings. Accordingly, prior periods have not been recast to reflect the new accounting standard. The cumulative effect of applying the provisions of ASC 842 had no material impact on accumulated deficit.

The Company elected transitional practical expedients for existing leases which eliminated the requirements to reassess existing lease classification, initial direct costs, and whether contracts contain leases. Also, the Company elected to present the payments associated with short-term leases as an expense in statements of operations. Short-term leases are leases with a lease term of 12 months or less. The adoption of ASC 842 had no impact on the Company's balance sheet.

***Net Loss per Share***

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Net earnings or loss per share is computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period, excluding shares subject to redemption or forfeiture. The Company presents basic and diluted net earnings or loss per share. Diluted net earnings or loss per share reflect the actual weighted average of common shares issued and outstanding during the period, adjusted for potentially dilutive securities outstanding. Potentially dilutive securities are excluded from the computation of the diluted net loss per share if their inclusion would be anti-dilutive. As all potentially dilutive securities are anti-dilutive as of June 30, 2025 and 2024, diluted net loss per share is the same as basic net loss per share. Potentially dilutive items included the following:

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| | | |
|:---|:---|:---|
|  | **Six Months Ended** | **Six Months Ended** |
|  | **June 30,** | **June 30,** |
|  | **2025** | **2024** |
| Series Seed convertible preferred stock | 345659651 | 353712906 |
| Stock options | 230721043 | 216513494 |
| Warrants | 4055208 | 3709375 |
| &nbsp;&nbsp;&nbsp;Total potentially dilutive shares | 580435902 | 573935775 |

---

***Recently Adopted Accounting Pronouncements***

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In June 2016, the FASB issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). This standard establishes an impairment model (known as the current expected credit loss ("CECL") model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses, which is intended to result in a timelier recognition of losses. Under the CECL model, entities will estimate credit losses over the entire contractual term of the instrument (considering estimated prepayments, but not expected extensions or modifications) from the date of initial recognition of the financial instrument. Measurement of expected credit losses are to be based on relevant forecasts that affect collectability. The scope of financial assets within the CECL methodology is broad and includes trade receivables from certain revenue transactions and certain off-balance sheet credit exposures. Different components of the guidance require modified retrospective or prospective adoption.

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In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, which amends and clarifies several provisions of Topic 326. In May 2019, the FASB issued ASU 2019-05, Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief, which amends Topic 326 to allow the fair value option to be elected for certain financial instruments upon adoption. ASU 2019-10 extended the effective date of ASU 2016-13 until December 15, 2022. The Company adopted this new guidance, including the subsequent updates to Topic 326, on April 1, 2022 and the adoption did not have a material impact on the Company's financial statements and related disclosures.

Management does not believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying consolidated financial statements. As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances.

**3.** **GOING CONCERN** 

The Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has net cash used in operating activities of $291,708 and $1,799,987 for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, the Company had an accumulated deficit of $8,378,576. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern. The Company's ability to continue as a going concern for the next twelve months is dependent upon its ability to generate sufficient cash flows from operations to meet its obligations, which it has not been able to accomplish to date, and/or to obtain additional capital financing. No assurance can be given that the Company will be successful in these efforts. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities.

**4.** **CRYPTOCURRENCIES AND NFTs** 

Due to the lack of authoritative guidance under GAAP, the Company accounts for its holdings in cryptocurrency as intangible assets. As a result, the Company initially measures the cryptocurrency at cost. Since there is no limit on the useful life of the cryptocurrencies, they are classified as indefinite-lived intangible assets.

Indefinite-lived intangible assets are not subject to amortization, but rather are tested for impairment on an annual basis and more frequently if events or circumstances change that indicate that it is more likely than not that the asset is impaired. As a result, the Company recognizes decreases in the value of its holdings in cryptocurrency. Both Bitcoin and Ether are traded on exchanges in which there are observable prices in an active market. The Company considers quoted prices below its carrying cost to be an impairment indicator. The quoted price and observable prices are determined by the Company using a principal market analysis in accordance with ASC 820, *Fair Value Measurement*.

The Company considers each cryptocurrency as a separate unit of account when evaluating cryptocurrencies for impairment. The Company tracks the weighted average unit cost of each cryptocurrency received or purchased, when performing impairment testing and upon disposition either through sale or exchanged for goods or services.

The Company designates certain cryptocurrency transactions as fair value hedges to hedge volatility and market value risks for our cryptocurrencies. Fair value hedge amounts included in the assessment of hedge effectiveness are recognized in other income (expense), net, along with the offsetting gains and losses of the related hedged items.

*Cryptocurrencies*

 

Realized gains on cryptocurrency holdings were $0 and $319,750 for the six months ended June 30, 2025, and 2024, respectively. The Company recorded no impairment charges against its cryptocurrency holdings in 2024 or 2023.

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The indefinite lived intangible activity for the period ended June 30, 2025, are as follows:

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| | |
|:---|:---|
|  | **Cryptocurrency**<br>**assets** |
| Balance at December 31, 2024 | $12531 |
| Purchase of cryptocurrency | 200 |
| Sales of cryptocurrency | (2750) |
| Realized gains on cryptocurrency sales | - |
| Balance at June 30, 2025 | $9981 |

---

*Nonfungible Token Assets*

 

The Company owns a portfolio of NFT assets that were first acquired in early 2022. The following is a summary of NFT activity for 2024:

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| | |
|:---|:---|
|  | **Nonfungible**<br>**token assets** |
| Balance at December 31, 2024 | $51060 |
| Purchases of NFTs |  |
| Impairment | - |
| Balance at June 30, 2025 | $51060 |

---

**5.** **INTANGIBLE ASSETS** 

On January 24, 2025, the Company completed an asset acquisition of certain assets of Eywin Bilgi Teknolojileri A.S, a Turkish entity. Eywin develops mobile applications focused on security, privacy, device optimization, and health. Its product suite includes Applock Pro, VPN, Calculator Photo Vault Pro, and AI Trainer, solutions designed to address user needs through innovative methods and cross-platform functionality.

This transaction was accounted for as an asset acquisition under ASC 805 as it did not meet the definition of a business combination. In accordance with ASC 805-50, the total purchase consideration of approximately $10.2 million was allocated to the individual assets acquired based on their relative fair values. The identifiable intangible assets acquired primarily included Developed Technology (estimated fair value of $3.35 million, remaining economic life of 10 years), Trade Names/Trademarks ($0.27 million, 10 years), Customer Relationships ($5.48 million, 9 years), and Assembled Workforce ($0.05 million). No goodwill or bargain purchase gain was recognized in connection with this transaction.

As of June 30, 2025, intangible assets were $9,804,014, net of $435,986 which was amortized for the six months ended June 30, 2025.

**6.** **STOCKHOLDERS' EQUITY** 

***Convertible Preferred Stock***

The Company has issued Series Seed convertible preferred stock. The Company's certificate of incorporation, as amended and restated, authorized the Company to issue a total of 388,800,000 shares of Preferred Stock, of which all are designated as Series Seed Preferred Stock. The Preferred Stock have a par value of $0.0001 per share.

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The holders of the Preferred Stock have the following rights and preferences:

*Voting* 

On any matter presented to the stockholders of the Company for their action or consideration at any meeting of stockholders of the Company (or by written consent of stockholders in lieu of a meeting), each holder of outstanding shares of Preferred Stock shall be entitled to cast the number of votes equal to the number of whole shares of Common Stock into which the shares of Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. Except as provided by law or by the other provisions of the Company's Amended and Restated Certificate of Incorporation, holders of Preferred Stock shall vote together with the holders of Common Stock as a single class and on an as converted to Common Stock basis.

The Company shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, do any of the following without the written consent or affirmative vote of at least a majority of the outstanding shares of Preferred Stock, voting together as a single class on an as-converted to Common Stock basis:

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| |
|:---|
| purchase or pay or declare any dividend on any capital stock other than (i) dividends payable on the Common Stock solely in the form of additional shares of Common Stock, (ii) redemptions of dividends or distributions on the Series Seed Preferred stock and (iii) stock repurchased from former employees, officers, directors or others who performed services for the Company |
| create or hold capital stock in any subsidiary that is not a wholly-owned subsidiary |

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At any time when at least 70,596,360 shares of Series Seed Preferred Stock remain outstanding, the Company shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, without the written consent or affirmative vote of at least a majority of the outstanding shares of Preferred Stock, voting together as a single class on an as-converted to Common Stock basis, amend, alter or repeal any provision of the Company's Amended and Restated Certificate of Incorporation or Bylaws of the Company in a manner that substantially and disproportionally adversely affects the powers, preferences or rights of the Series Seed Preferred Stock.

*Dividends*

 

The Company shall not declare, pay or set aside any dividends on shares of any other class or series of capital stock of the Company unless (in addition to the obtaining of any consents required elsewhere in the Company's Amended and Restated Certificate of incorporation) the holders of the Preferred Stock then outstanding shall first receive, or simultaneously receive, a dividend on each outstanding share of Preferred Stock as defined in the Company's Amended and Restated Certificate of Incorporation. The Preferred Stock dividend rates contain certain dilution protections.

*Liquidation*

In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of shares of each series of Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Company available for distribution to its stockholders and, in the event of a deemed liquidation event, the holders of shares of each series of Preferred Stock then outstanding shall be entitled to be paid out of the consideration payable to stockholders in such deemed liquidation event or out of the available proceeds, as applicable, on a pari passu basis among each other, the greater of (i) an amount per share equal to one times the applicable Original Issue Price (as defined below), plus any dividends declared but unpaid thereon, payable before any payment shall be made to the holders of Common Stock by reason of their ownership thereof (the amounts payable pursuant to this clause (i) are hereinafter referred to as the "Preferred Liquidation Amounts"), or (ii) such amount per share as would have been payable had all shares of such series of Preferred Stock (and all shares of all other series of Preferred Stock that would receive a larger distribution per share if such series of Preferred Stock and all such other series of Preferred Stock were converted into Common Stock) been converted into Common Stock immediately prior to such liquidation, dissolution, winding up or deemed liquidation event. If, upon any such liquidation, dissolution or winding up of the Company or deemed liquidation event, the assets of the Company available for distribution to its stockholders shall be insufficient to pay the holders of shares of Preferred Stock the full amount to which they shall be entitled, the holders of shares of Preferred Stock shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.

The Series Seed Original Issue Price is $0.01345679 per share, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series Seed Preferred Stock. After payment of the Preferred Liquidation Amounts, remaining assets are distributed ratably to holders of Common Stock.

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The liquidation preference as of both December 31, 2024 and 2023 was $4,759,840.

*Anti-Dilution Rights*

 

Holders of Series Seed Preferred Stock have the benefit of anti-dilution protective provisions that will be applied to adjust the number of shares of Common Stock issuable upon conversion of the shares of the Preferred Stock. If equity securities are subsequently issued by the Company at a price per share less than the conversion price of a series of Preferred Stock then in effect, the conversion price of the affected series of Preferred Stock will be adjusted using a broad-based, weighted-average adjustment formula as set out in the Company's Amended and Restated Certificate of Incorporation. Preferred Stock has certain protections against additional issuances of Common Stock.

*Conversion*

 

Each share of Series Seed Preferred Stock shall be convertible, at the option of the holder thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into such number of fully paid and non-assessable shares of Class A Common Stock as is determined by dividing the applicable original issue price by the applicable conversion price in effect at the time of conversion. The Series Seed conversion price is $0.01345679 per share.

Additionally, each share of Series Seed Preferred Stock will automatically convert into shares of Class A Common Stock (i) immediately prior to the closing at a price of at least 3 times the Series Seed Original Issue Price of a firm commitment underwritten public offering, registered under the Securities Act of 1933, as amended (the "Securities Act") or (ii) a vote or written consent of a majority of the outstanding shares of Preferred Stock, voting together as a single class on an as-converted to Common Stock basis, and a vote of the key holders of common stock, as defined in the Company's Amended Articles of Incorporation.

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***Common Stock***

The Company authorized 2,125,000,000 shares of Class A Common Stock, 268,000,000 shares of Class B Common Stock, 12,150,000 shares of Class C Common Stock and 600,000,000 shares of Class AAA Common Stock at $0.0001 par value as of December 31, 2024.

The holders of the Class A common stock are entitled to one vote for each share of such stock held at all meetings of stockholders. There shall be no cumulative voting, and the holders of shares of Class B, Class C and Class AAA common stock shall not be entitled to vote. The holders of record of Class A Common Stock exclusively shall be entitled to elect all directors of the Company.

The Company shall not declare, pay or set aside any dividends on shares of any other class or series of capital stock of the Company unless (in addition to the obtaining of any consents required elsewhere in the Company's Amended and Restated Certificate of Incorporation) the holders of the Preferred Stock then outstanding shall first receive, or simultaneously receive, a dividend on each outstanding share of Preferred Stock as defined in the Company's Amended and Restated Certificate of Incorporation.

Additionally, each share of Class B Common Stock, Class C Common Stock or Class AAA Common Stock will automatically convert into shares of Class A Common Stock (i) immediately prior to the closing of a firm commitment underwritten public offering, registered under the Securities Act of 1933, as amended (the "Securities Act") or (ii) upon election from the Company's board of directors..

During 2024 and 2023, option holders exercised 10,774,734 and 4,660,502 options, respectively, for shares of Class B common stock for no proceeds, and during 2024 the Company issued 10,609,345 shares of Class B common stock pursuant to stock option exercises for proceeds of $9,482.

During 2024, the Company also issued 88,340,056 shares of Class AAA common stock pursuant to a Regulation CF offering for gross proceeds of $10,163,593, incurring $1,484,912 in offering costs in connection with the offering. As of December 31, 2024, subscription receivable of $332,783 relating to Class AAA shares issued during the year has been presented under subscription receivable.

During the six months ending June 30, 2025, 8,053,255 Series Seed Preferred shares, 18,954,782 Class A shares, 1,505,993 Class B shares, and 46,718 Class C shares were converted into Class AAA common stock.

During the six months ending June 30, 2025, option holders exercised 1,518,615 options for shares of Class B common stock for $12,515 in proceeds.

18 of 22

During the six months ending June 30, 2025, the Company issued 244,539,923 shares of Class AAA common stock for gross proceeds of $30,943,357 pursuant to a Regulation CF offering. In connection with the offering, the Company incurred $4,055,488 in offering costs.

As of June 30, 2025, and December 31, 2024, there were 627,870,232 and 646,825,014 shares of Class A Common Stock issued and outstanding. As of June 30, 2025, and December 31, 2024, there were 20,749,794 and 20,737,172 shares of Class B Common Stock issued and outstanding, respectively. As of June 30, 2025, and December 31, 2024, there were 10,946,911 and 10,993,629 shares of Class C Common Stock issued and outstanding, respectively. As of June 30, 2025, and December 31, 2024 there were and 422,521,070 and 149,320,399 shares of Class AAA Common Stock issued and outstanding, respectively.

**7.** **STOCK- BASED COMPENSATION** 

 ****

***2021 Stock Plan***

The Company has adopted the 2021 Equity Incentive Plan ("2021 Plan"), which provides for the grant of shares of stock options and restricted stock awards to employees, non-employee directors, and non-employee consultants. The number of shares authorized by the 2021 Plan was 243,000,000 shares as of December 31, 2024. The options have a term of ten years. The amounts granted each calendar year to an employee or non-employee is limited depending on the type of award. Stock options comprise all of the awards granted since the 2021 Plan's inception. Stock options granted under the 2021 Plan typically vest between immediate and four-year periods. As of June 30, 2025, there were 230,721,043 shares available for future issuance.

A summary of information related to stock options is as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Options** | **Weighted Average Exercise Price** | **Intrinsic Value** |
| Outstanding as of December 31, 2024 | 209713228 | $0.02 | $4910428 |
| Granted | 22526430 | 0.05 |  |
| Exercised | (1518615) | 0.03 |  |
| Forfeited | - | - |  |
| Outstanding as of June 30, 2025 | 230721043 | $0.03 | $5998187 |
| Exercisable as of June 30, 2025 | 167361502 | $0.03 | $4350993 |
| Exercisable as of December 31, 2024 | 152122755 | $0.02 | $3042455 |

---

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended** | **Six Months Ended** |
|  | **June 30,** | **June 30,** |
|  | **2025** | **2024** |
| Weighted average grant-date fair value of options granted during period | $0.04 | $0.02 |
| Weighted average duration (years) to expiration of outstanding options at period-end | 8.03 | 9.18 |

---

During 2024, option holders exercised 165,389 options for shares of Class B common stock for no proceeds and 10,609,345 options for shares of Class B common stock for $4,736 in proceeds.

19 of 22

During the six months ending June 30, 2025, option holders exercised 1,518,615 options for shares of Class B common stock for $12,515 in proceeds.

The following table presents, on a weighted average basis, the assumptions used in the Black-Scholes option-pricing model to determine the grant-date fair value of stock options granted to employees and directors:

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended** | **Six Months Ended** |
|  | **June 30,** | **June 30,** |
|  | **2025** | **2024** |
| Risk-free interest rate | 3.60%-4.80 | 3.88%-4.80 |
| Expected term (in years) | 5.04 | 4.80 |
| Expected volatility | 80.00% | 80.00% |
| Expected dividend yield | 0% | 0% |

---

The total grant-date fair value of the options granted during the six months ended June 30, 2025 and 2024 was $857,672 and $53,337 respectively. Stock-based compensation expense for stock options of $427,439 and $373,503 respectively, was recognized under FASB ASC 718 for the six months ended June 30, 2025, and 2024, respectively. Total unrecognized compensation cost related to non-vested stock option awards amounted to $2,961,097 as of June 30, 2025 and will be recognized over a weighted average period of 3.20 years as of June 30, 2025.

 **

***Classification***

 **

Stock-based compensation expense was classified in the consolidated statements of operations as follows:

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended** | **Six Months Ended** |
|  | **June 30,** | **June 30,** |
|  | **2025** | **2024** |
| Sales and marketing | $337677 | $74701 |
| Research and development | 47018 | 186751 |
| General and administrative | 42744 | 112051 |
|  | $427439 | $373503 |

---

**8.** **COMMITMENTS AND CONTINGENCIES** 

 ****

***Contingencies***

The Company may be subject to pending legal proceedings and regulatory actions in the ordinary course of business. The results of such proceedings cannot be predicted with certainty, but the Company does not anticipate that the final outcome, if any, arising out of any such matters will have a material adverse effect on its business, financial condition or results of operations.

**9.** **SUBSEQUENT EVENTS** 

Management has evaluated subsequent events through September 16, 2025, the date the financial statements were available to be issued. Based on this evaluation, no additional material events were identified which require adjustment or disclosure in these consolidated financial statements.

20 of 22

Item 4. Exhibits

**INDEX TO EXHIBITS**

---

| | |
|:---|:---|
| 2.1 | [Amended and Restated Certificate of Incorporation of Mode Mobile, Inc. (incorporated by reference to Exhibit 2.1 to the Company's Offering Statement on Form 1-A/A filed with the SEC on June 11, 2024)](https://www.sec.gov/Archives/edgar/data/1748441/000149315224023395/ex2-1.htm) |
| 2.2 | [Bylaws of Mode Mobile, Inc. (incorporated by reference to Exhibit 2.2 to the Company's Offering Statement on Form 1-A filed with the SEC on March 28, 2024)](https://www.sec.gov/Archives/edgar/data/1748441/000149315224011715/ex2-3.htm) |
| 3.1 | [Form of Selling Shareholder Irrevocable Power of Attorney (incorporated by reference to Exhibit 3.1 to the Company's Offering Statement on Form 1-A/A filed with the SEC on June 11, 2024)](https://www.sec.gov/Archives/edgar/data/1748441/000149315224023395/ex3-1.htm) |
| 3.2 | [Investors' Rights Agreement, as amended*†* (incorporated by reference to Exhibit 3.2 to the Company's Offering Statement on Form 1-A/A filed with the SEC on June 11, 2024)](https://www.sec.gov/Archives/edgar/data/1748441/000149315224023395/ex3-2.htm) |
| 3.3 | [Right of First Refusal and Co-Sale Agreement, as amended*†* (incorporated by reference to Exhibit 3.3 to the Company's Offering Statement on Form 1-A/A filed with the SEC on June 11, 2024)](https://www.sec.gov/Archives/edgar/data/1748441/000149315224023395/ex3-3.htm) |
| 3.4 | [Form of SAFT (incorporated by reference to Exhibit 3.4 to the Company's Offering Statement on Form 1-A filed with the SEC on March 28, 2024)](https://www.sec.gov/Archives/edgar/data/1748441/000149315224011715/ex3-4.htm) |
| 3.5 | [Form of Warrant for Class AAA Common Stock (incorporated by reference to Exhibit 3.5 to the Company's Offering Statement on Form 1-A filed with the SEC on March 28, 2024)](https://www.sec.gov/Archives/edgar/data/1748441/000149315224011715/ex3-5.htm) |
| 3.6 | [Form of Warrant for up to 6,000, 0000 shares of Class AAA Common Stock\**†*](ex3-6.htm) |
| 4.1 | [Form of Subscription Agreement (incorporated by reference to Exhibit 4.1 to the Company's Offering Statement on Form 1-A filed with the SEC on March 28, 2024)](https://www.sec.gov/Archives/edgar/data/1748441/000149315224011715/ex4-1.htm) |
| 5.0 | [Voting Agreement, as amended† (incorporated by reference to Exhibit 5 to the Company's Offering Statement on Form 1-A/A filed with the SEC on June 11, 2024)](https://www.sec.gov/Archives/edgar/data/1748441/000149315224023395/ex5.htm) |
| 6.1 | [Employment Agreement with Justin Hines (incorporated by reference to Exhibit 6.1 to the Company's Offering Statement on Form 1-A filed with the SEC on March 28, 2024)](https://www.sec.gov/Archives/edgar/data/1748441/000149315224011715/ex6-1.htm) |
| 6.2 | [Employment Agreement with Kathleen DeKam (incorporated by reference to Exhibit 6.2 to the Company's Offering Statement on Form 1-A filed with the SEC on March 28, 2024)](https://www.sec.gov/Archives/edgar/data/1748441/000149315224011715/ex6-2.htm) |
| 6.3 | [Employment Agreement with Kiran Panesar (incorporated by reference to Exhibit 6.3 to the Company's Offering Statement on Form 1-A filed with the SEC on March 28, 2024)](https://www.sec.gov/Archives/edgar/data/1748441/000149315224011715/ex6-3.htm) |

---

*\* Filed herewith*

*† Portions of the exhibit have been omitted.*

21 of 22

**SIGNATURES**

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

---

| | |
|:---|:---|
| **Mode Mobile, Inc.** | **Mode Mobile, Inc.** |
| *By* | */s/ Dan Novaes* |
| Dan Novaes, Chief Executive Officer | Dan Novaes, Chief Executive Officer |
| Mode Mobile, Inc. | Mode Mobile, Inc. |
| Date: September 30, 2025 | Date: September 30, 2025 |

---

The following persons in the capacities and on the dates indicated have signed this Offering Statement.

---

| | |
|:---|:---|
| *By* | */s/ Dan Novaes* |
| Dan Novaes, Director, Principal Executive Officer | Dan Novaes, Director, Principal Executive Officer |
| Mode Mobile, Inc. | Mode Mobile, Inc. |
| Date: September 30, 2025 | Date: September 30, 2025 |
| *By* | */s/ Prakash Ramachandran* |
| Prakash Ramachandran, Principal Financial Officer, Principal Accounting Officer | Prakash Ramachandran, Principal Financial Officer, Principal Accounting Officer |
| Mode Mobile, Inc. | Mode Mobile, Inc. |
| Date: September 30, 2025 | Date: September 30, 2025 |
| By | */s/ Mark Lawrence* |
| Mark Lawrence, Director | Mark Lawrence, Director |
| Mode Mobile, Inc. | Mode Mobile, Inc. |
| Date: September 30, 2025 | Date: September 30, 2025 |

---

22 of 22

## Add

**Exhibit 3.6**

**WARRANT**

THIS WARRANT IS ISSUED IN A PRIVATE TRANSACTION, WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND REGULATIONS PROMULGATED THEREUNDER (THE "SECURITIES ACT") OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IF REGISTERED UNDER THE SECURITIES ACT AND SUCH OTHER JURISDICTION LAWS OR IF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL IS PROVIDED THAT STATES THAT AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER JURISDICTION SECURITIES LAWS IS AVAILABLE.

THIS WARRANT IS ALSO SUBJECT TO THE RESTRICTIONS ON TRANSFER SET FORTH HEREIN AND MAY NOT BE TRANSFERRED WITHOUT THE CONSENT OF THE COMPANY IN ACCORDANCE WITH SUCH TRANSFER PROVISIONS AND THE FOREGOING SECURITIES LAW COMPLIANCE.

---

| | |
|:---|:---|
| Company: | **Mode Mobile, Inc.,** a Delaware corporation |
| Warrant Stock: | Class AAA Common Stock, par value $0.0001 per share |
| Number of Shares: | Up to 6,000,000 shares of Warrant Stock, subject to adjustment as provided herein |
| Exchange Price: | $0.125 per share, subject to adjustment as provided herein |
| Issue Date: | January 24, 2025 |
| Expiration Date: | January 24, 2032 |

---

The term "<u>Holder</u>" shall initially refer to Partners for Growth VII, L.P., a Delaware limited partnership, which is the initial holder of this Warrant and shall further refer to any subsequent permitted holder of this Warrant (this "<u>Warrant</u>") from time to time.

The Company does hereby certify and agree that in consideration of Holder's payment of $6,596.16 for this Warrant on the Issue Date (the "<u>Notional Price</u>") (such amount being exclusive of the Exchange Price payable or creditable upon Exercise or Exchange of this Warrant) and for other good and valuable consideration, Holder, or its permitted successors and assigns, hereby is entitled to Exchange or Exercise this Warrant in the Company for up to the Number of Shares of the Company's Class AAA Common Stock set forth in the heading to this Warrant above (the "<u>Warrant Stock</u>"). This Warrant is subject to adjustment as set forth in this Warrant. Capitalized terms used but not defined in this Warrant have their meanings as set forth in that certain Loan and Security Agreement, dated on or about the date hereof, by and between the Company and Holder (the "<u>Loan Agreement</u>"), whether or not the Loan Agreement is then in effect. When the term "convert" or "conversion" is used herein in relation to this Warrant, it includes an Exchange and an Exercise, each as defined in Section 1.3(a), as applicable.

**Section 1. Term, Exchange Price, Conversion of Warrant, Definitions.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 <u>Term of Warrant</u>. This Warrant shall be convertible until 5:00 p.m. Pacific time on the Expiration Date set forth in the heading to this Warrant above (hereinafter referred to as the "<u>Expiration Date</u>"); and the period between issuance and the earliest to occur of the conversion of this Warrant in whole (or in parts that together constitute the whole), exercise of the Put Right and the Expiration Date, as such Expiration Date may be extended under Section 1.6 for the duration of any Review Period, shall be referred to as the "<u>Term</u>". Upon completion of the Term (as extended for the Review Period, if applicable), this Warrant shall terminate and be void thereafter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2 <u>Exchange Price</u>. The price per share at which the Warrant Stock is issuable upon conversion of this Warrant shall be equal to the Exchange Price set forth in the heading to this Warrant above (the "<u>Exchange Price</u>"), subject to adjustment as set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3 <u>Conversion of Warrant</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Warrant may be exercised, in whole or in part, upon surrender of this Warrant to the Company, together with the Election to Exchange, Exercise, or Put form attached hereto as <u>Exhibit A</u> (the "<u>Election</u>"), duly completed and executed with "Exercise" selected as the mode of conversion, and upon payment in cash to the Company of the Exchange Price multiplied by the number of shares of Warrant Stock in respect of which this Warrant is then being exercised (an "<u>Exercise</u>"). In lieu of an Exercise, Holder may convert this Warrant, in whole or in part, on a cashless basis by so indicating in the Election and proceeding in accordance with the remainder of this Section 1.3 (an "<u>Exchange</u>"). In each above case, Holder shall surrender this Warrant to the Company at its then principal offices, together with the Election duly completed and executed; provided however, that if this Warrant is Exercised or Exchanged for fewer than all of the Warrant Stock, the Company shall promptly issue a new warrant, in form and substance substantially identical to this Warrant, for the remaining Warrant Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Upon an Exchange, Holder shall receive Warrant Stock such that, without the payment of any funds, Holder shall surrender this Warrant in exchange for the number of shares of Warrant Stock equal to "X" (as defined below), computed using the following formula:

<u>Y \* (A-B)</u> <br> X = A

Where

X = the number of shares of Warrant Stock to be issued to Holder

Y = the number of shares of Warrant Stock to be converted

under this Warrant

A = the Fair Market Value of one share of Warrant Stock

B = the Exchange Price (as may be adjusted pursuant to the terms hereof as of the date of such calculations)

\* = multiplied by

In an Exchange (only), if A is less than or equal to B, then X shall equal zero, and this Warrant shall terminate with respect to all of the Warrant Stock being converted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) For purposes of calculating Fair Market Value for purposes of Exchanging this Warrant, the "<u>Fair Market Value</u>" of one share of Warrant Stock shall be (i) if the Company's securities become listed on a Trading Market that is a securities exchange, the average closing sale price reported on such exchange for such listed securities during the 20-trading day period immediately prior to the date Holder delivers its Election to the Company, or (ii) if the Company's securities are traded on a Trading Market that is an over-the-counter or inter-dealer quotation system Trading Market, the average of bid and ask prices for such securities over the 15-trading day period immediately prior to the day Holder delivers its Election to the Company, and in each case of clauses (i) and (ii), above, if the Warrant Stock is convertible into such listed or over-the-counter-traded securities other than on a one-to-one basis, multiplied by the ratio at which one share of Warrant Stock converts into such other security. If the Company's securities are not listed or traded as contemplated in clauses (i) or (ii), above, the Fair Market Value of a share of Warrant Stock shall be the price per share of Warrant Stock which the Company could obtain from a willing buyer of Warrant Stock sold by the Company from its authorized but unissued capital stock, initially as the Board of Directors of the Company ("<u>Board</u>") shall determine in its reasonable, good faith judgment and provide in a written reasoned analysis to Holder, which shall reasonably take into account the price to which a holder of Warrant Stock would be entitled based on an enterprise valuation of the Company (including any Subsidiaries) as a going concern and the application of the rights, preferences and privileges of the Company's outstanding securities as set forth in the Constitutional Documents without discount for minority, control or lack of marketability. For the avoidance of doubt, if the Board relies on an appraisal (including a "409A"-type valuation) to determine the Fair Market Value of the Warrant Stock, such determined Fair Market Value from such appraisal may not assume the automatic conversion of all convertible securities in deriving such Fair Market Value but, instead, shall be based on enterprise value and application of the rights, preferences and privileges of the Company's outstanding securities as set forth in the Constitutional Documents as if the Company (including its Subsidiaries) were being sold in an Acquisition for cash to determine what dollar value each class of security would receive upon such Acquisition. The parties acknowledge and agree that, so long as a current 409A-type valuation is in effect at such time and is calculated in the foregoing manner, then such 409A value shall constitute the Fair Market Value for purposes of this Section 1.3(c); provided, however and notwithstanding the foregoing, if at any time a Liquidity Event is pending (which may be inferred, inter alia, from the Company's engagement of an investment banking firm in connection with an IPO or execution of a term sheet or other agreement in respect of a merger or similar transaction or a new equity financing round) or is more likely than not to be consummated before a new 409A-type valuation would be available (either on the customary annual valuation schedule or as a result of a material event, such as a pending Liquidity Event, which would ordinarily infer the need to update a 409A-type valuation), then the Board in determining Fair Market Value as aforesaid shall reasonably take the effect of such events on the value of a share of Warrant Stock without being bound by the then-effective 409A-type valuation. If this Warrant is to be converted in connection with an Acquisition or IPO (in fact), the Fair Market Value of a share of Warrant Stock shall be based on the enterprise value specified or implied in such Acquisition or IPO and shall be the greater of (A) the value attributable to the Warrant Stock and (B) the value attributable to the Company securities into which the Warrant Stock is (or may be) convertible or exchangeable (but subject to Holder's conversion or exchange directly into such other Company securities). In each foregoing case, the Board's determination of Fair Market Value shall be timely provided to Holder as contemplated in Section 1.6 for its consideration during the Review Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) In the event that Holder converts this Warrant in connection with a transaction in which stock of the same class and series as the Warrant Stock are converted into another security, Holder may effect a conversion directly into such other security.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Subject to Section 2 hereof, upon delivery of the duly completed and executed Election, the Company shall issue and deliver within five (5) Business Days to Holder, (or to the extent a transfer is made by Holder in compliance with Section 2 in connection with such Election, including execution and submission of the Assignment Form attached hereto as <u>Exhibit B</u>, such other person as Holder may designate in writing in such transfer), a certificate or certificates or other legal evidence of Holder's ownership of the number of shares of Warrant Stock so acquired upon the conversion of this Warrant. Such certificate(s) or other legal evidence shall be deemed to have been issued, and any person so designated to be named therein shall be deemed to have become a stockholder of the Company and a holder of record of such Warrant Stock as of the date the Election is delivered to the Company; provided, however, Holder's admission as a stockholder shall be subject to Holder's execution and delivery of such agreements as may be required of all other stockholders (other than Excepted Purchasers) holding the same or greater number of Company securities or of an accession or similar agreement by which Holder agrees to be bound by such agreements. If this Warrant is converted in part, a new warrant substantially identical to this Warrant for the number of shares of Warrant Stock not converted shall be promptly executed and delivered to Holder by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.4 <u>Fractional Interests</u>. The Company shall not be required to issue fractions of shares of Warrant Stock upon the conversion of this Warrant. If any fraction of a share of Warrant Stock would be issuable upon the conversion of this Warrant (or any portion thereof), the Company shall purchase such fraction for an amount in cash equal to the fair market value of such fractional share of Warrant Stock as determined by the Board in its reasonable good faith judgment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.5 <u>Certain Definitions</u>. For purposes of this Warrant:

"<u>Acquisition</u>" means any transaction or series of related transactions involving: (i) the sale, exclusive license, or other disposition of all or a majority of the assets of the Company, other than to the Company or a wholly-owned direct or indirect subsidiary of the Company; (ii) any merger or consolidation of the Company into or with another person or entity (other than a merger or consolidation effected exclusively to change the Company's domicile), or any other corporate reorganization, in each case, in which the stockholders of the Company and their affiliates in their capacity as such immediately prior to such merger, consolidation or reorganization, own less than a majority of the Company's (or the surviving or successor entity's) outstanding voting power immediately after such merger, consolidation or reorganization, including a Deemed Liquidation Event under the Company's Constitutional Documents (whether or not the Company's Constitutional Documents at the time of such event define such term as they do on the Issue Date); (iii) or any sale or other transfer by the stockholders of the Company of stock representing a Controlling interest in the Company (which shall be presumed if at least a majority of the Company's then-total outstanding combined voting power changes hands in such transaction), other than to an Affiliate of such stockholder or to family members or related entities for bona fide estate planning. For the avoidance of doubt, an "Acquisition" shall not be deemed to include a sale and issuance by the Company of its capital stock or of securities or instruments exercisable for or convertible into, or otherwise representing the right to acquire, its capital stock to one or more venture capital / professional investors in arm's length transactions for fair value for cash in a transaction or series of related transactions the primary purpose of which is a bona fide equity financing of the Company.

An "<u>Affiliate</u>" of, or person "affiliated" with, a specified Person, is a Person that directly, or indirectly through one or more intermediaries, beneficially owns or is beneficially owned, controls or is controlled by, or is under common control with, the Person specified, and any person or entity that owns or controls directly or indirectly ten percent (10%) or more of the Fully-Diluted equity of Company shall be deemed to be an Affiliate of the Company.

"<u>Business Days</u>" means any day other than a Saturday or Sunday on which commercial banks in California are open for business.

"<u>Constitutional Documents</u>" means the Company's Amended and Restated Certificate of Incorporation as filed with the Delaware Secretary of State on May 16, 2024 (as further amended and/or restated, as applicable), its Bylaws and all agreements generally between or among the Company and holders of any class or series of its stock, including the Stockholders Agreements.

"<u>Control</u>" (including the terms "controlling", "controlled by" and "under common control with") means the possession, direct or indirect through one or more Affiliates or Persons acting in concert, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership or voting of voting securities, by contract, by effective control or otherwise.

"<u>Effective Control</u>" means of Control other than by vote of a requisite number of Company securities that from time to time vests Control in a Person, if that person is acting directly or indirectly by agreement or a tacit understanding with one or more other Persons whose voting securities, combined with such Person, would constitute voting Control, or by direct or indirect Control of Persons who have the right to appoint, nominate or designate or have appointed, nominated or designated the majority of the representatives to the Board or such majority as is required to amend the majority Director appointment rights in the Company's Constitutional Documents.

"<u>Excepted Purchasers</u>" means purchasers of Company securities in an IPO or offering under the Regulation A exemption from the Securities Act, including a crowdfunding transaction, or transferees thereof.

"<u>Fully-Diluted</u>" in relation to the Company's equity means its outstanding and issuable securities, treating all options (issued or reserved for issuance, such as under an employee stock pool), warrants, convertible securities, convertible debt, other convertible obligations (e.g., accrued and unpaid compensation) and other derivative instruments and rights on an as-exercised and as-converted into common stock basis.

"<u>IPO</u>" means an underwritten public offering (an offer for sale to qualified members of the public of the Company's equity securities on a Trading Market, including a merger into a public shell or "SPAC"-type transaction), but shall not include an offering under Regulation A exemption from the Securities Act, including a crowdfunding transaction; <u>provided</u> that as a factor in determining the Fair Market Value of a share of Warrant Stock for the purposes of cashless Exchange, such offerings under Regulation A, including crowdfunding transactions, or the basis on which the consideration received by persons participating in such transactions may convert or exchange such consideration for Company equity securities to be listed on a Trading Market may be used, among other factors to be considered by the Board.

"<u>Liquidity Event</u>" means an IPO or Acquisition or dissolution of the Company.

"<u>Marketable Securities</u>" means securities meeting all of the following requirements: (i) the issuer thereof is then subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the "<u>Exchange Act</u>"), and/or like securities regulation and reporting requirements of any other jurisdiction or Trading Market regulators applicable to the Company in connection with the issuance, sale or trading of its securities <u>(</u>"<u>Applicable Law</u>"), and is then current in its filing of all required reports and other information under the Securities Act, the Exchange Act and any other similar Applicable Law; (ii) such securities are traded in a Trading Market, and (iii) Holder would be able to publicly re-sell such securities without restriction (whether contractual or regulatory, but not including restrictions that are specific to Holder as compared to similarly situated holders), within seven months following the closing of an applicable Liquidity Event.

"<u>Person</u>" or "<u>person</u>" means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated organization, association, corporation, government, or any agency or political division thereof, or any other entity of any kind.

"<u>Stockholders Agreements</u>" means that certain Right of First Refusal and Co-Sale Agreement (the "<u>ROFR Agreement</u>"), by and among the Company and its stockholders party thereto, and that certain Voting Agreement (the "<u>Voting Agreement</u>"), by and among the Company and its stockholders party thereto, each dated as of February 25, 2021, and, in each case, as amended or restated from time to time, including by that certain Omnibus Amendment and Waiver, dated May 16, 2024.

"<u>Trading Market</u>" means a listing or like representation or quotation on a nationally or internationally recognized securities exchange, inter-dealer quotation system or over-the-counter market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.6 <u>Automatic Conversion by Exchange or Put Right Exercise upon Expiration</u>. At any time prior to the expiration of the Term, upon Holder request, the Board shall provide its determination of the Fair Market Value of a share of Warrant Stock in accordance with <u>Section 1.3(b)</u> of this Warrant. If the Company has not delivered such Fair Market Value determination to Holder on or before the date that is ten (10) Business Days prior to the Expiration Date, then the Expiration Date shall be extended until the date on which Holder has had ten (10) Business Days (the "<u>Review Period</u>") after receipt of such determination (within which to review the Board's Fair Market Value determination, make an informed investment decision in relation to the exercise of its conversion rights or Put Right and notify the same to the Company). If Holder, subject to such advance notice and Review Period, has not delivered an Election to Exercise this Warrant, Exchange this Warrant, or exercise the Put Right on or before 5:00 p.m. PT on the Expiration Date, or the last day of any applicable Review Period extending the Expiration Date, then at such time on the Expiration Date or end of any applicable Review Period, this Warrant shall be deemed to either have been Exchanged or the Put Right exercised based upon the option that would result in the greater value to Holder between the Put Price and the net value to Holder upon Exchange at the fair market value determined in accordance with Section 1.3(b) of this Warrant, provided, however, if this Warrant has been Exercised or Exchanged in part at any time during its Term, then Holder shall be deemed to have waived its Put Right on the date of such Exercise or Exchange in part. Upon the Expiration Date (or such later date applicable in the event of a Review Period) if the Warrant is so Exchanged on such date, this Warrant shall automatically be deemed on and as of such date to be Exchanged pursuant to Section 1.3 as to all shares of Warrant Stock (or such other securities) for which this Warrant has become convertible and for which it shall not previously have been converted for shares of Warrant Stock (or if not then outstanding, into such other class and series of securities into which the shares of Warrant Stock are then convertible), Holder shall be deemed to have restated each of the representations and warranties in Section 7 of the Warrant as the date thereof, and the Company shall promptly deliver a certificate or other legal evidence of ownership of the shares of Warrant Stock (or such other securities) issued upon such Exchange to Holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.7 <u>Treatment of Warrant upon Acquisition of the Company or IPO</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to Section 3(g) and without prejudice to Holder's right to convert this Warrant at any time at its option, upon the closing of any Acquisition in which at least 80% of the consideration that would be paid to Holder if Holder had converted this Warrant in full prior to the Acquisition is cash, Marketable Securities or a combination of the foregoing (or other consideration, to the extent Holder had an option to choose cash and/or Marketable Securities in lieu of such other consideration) or any IPO, Holder shall (at its sole option) after having received the requisite notice of such Acquisition or IPO as specified below, either (i) convert this Warrant, or (ii) exercise the Put Right under Section 1.8, and to the extent Holder has not converted this Warrant or exercised the Put Right, subject to the proviso below, this Warrant will expire upon the consummation of such Acquisition or IPO; provided however, the expiration of the Warrant under this Section 1.7(a) shall not be effective until Holder has had the benefit of the Review Period (with the Board's reasoned Fair Market Value determination) and the Company has provided at least (ten) 10 Business Days of such Acquisition or IPO or expiration, which notice the Company shall provide no later than the earlier of (x) ten (10) Business Days prior to the effective date of such Acquisition or IPO and (y) the first date notice of such Acquisition or IPO is provided to any class or series of capital stock of the Company generally. If such notice is not timely provided by the Company, the expiration date of the Warrant described in this <u>Section 1.7(a)</u> shall be extended as contemplated in <u>Section 1.6</u> until Holder has had the benefit of a Review Period within which to make its Election under this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In all Acquisitions other than the cash and/or Marketable Securities consideration scenario described in Section 1.7(a), unless Holder (in its sole discretion) elects to exercise its right to convert this Warrant or exercise the Put Right, the Company shall procure that either (i) the surviving entity assumes the obligations of the Company under this Warrant mutatis mutandis and, to the extent applicable, in which case this Warrant shall be exercisable for the same securities as would be deliverable for the shares of Warrant Stock issuable upon conversion of the unconverted portion of this Warrant as if such shares of Warrant Stock were issued stock on the record date for the Acquisition (and the Exchange Price and/or number of shares of Warrant Stock shall be adjusted accordingly), or (ii) the acquirer or other surviving entity purchases this Warrant for its fair value, the starting value to be the implied valuation of the Company's stock in such Acquisition that would be issued upon Exchange of this Warrant (the "<u>Initial Value</u>"), but such fair value to be adjusted to reflect the initial value incorporated into a Black-Scholes Option Pricing Model (the "<u>Black-Scholes Calculation</u>") with the following assumptions: (A) a risk-free interest rate equal to the risk-free interest rate at the time of the closing of the Acquisition (or as close thereto as practicable), (B) a contractual life of the Warrant equal to the remaining term of this Warrant as of the date of the announcement of the Acquisition, and (C) a volatility factor of the expected market price of the Company's stock comprised of: (1) if the Company's securities are traded on a Trading Market, its volatility over the one year period ending on the day prior to the announcement of the Acquisition, or (2) if the Company's securities are not traded on a Trading Market (e.g., the Company is a nonpublic company), the volatility, over the one-year period prior to the announcement of the Acquisition, of an average of publicly-traded companies in the same or similar industry to the Company with such companies having similar revenues. The purchase price determined in accordance with the above clause (ii) shall be paid upon the initial closing of the Acquisition and shall not be subject to any post-Acquisition closing contingencies or adjustments; provided, however, the parties may mutually agree to take such post-Acquisition closing contingencies or adjustments into account in determining the purchase price, and if the parties take any post-Acquisition closing contingencies or adjustments into account, then upon the partial or complete removal of those post-Acquisition closing contingencies or adjustments, a new Black-Scholes Calculation would be made using all of the same inputs except for the value of the Company's stock (as determined under subclause (C)), and any increase in fair value (and, correspondingly, purchase price), including, without limitation, as a result of any earn-out or escrowed consideration, would be paid in full to Holder immediately after those post-Acquisition closing contingencies or adjustments can be determined or achieved. In lieu of the Company's obligation to procure assumption or Black-Scholes buy-out of this Warrant, the Company may purchase this Warrant (or the underlying Warrant Stock prior to the initial consummation of the Acquisition) (the "<u>Pre-Closing Purchase</u>") at the Initial Value, subject to later adjustment as set forth in the proviso below. The Company's election to exercise the Pre-Closing Purchase right shall be notified to Holder not less than ten (10) Business Days prior to the consummation of the Acquisition (which election may be contingent on such consummation), and the purchase price shall be paid to Holder on or before the date that is five (5) Business Days after such consummation (and upon payment of such purchase price, this Warrant shall terminate); provided, however, if (x) the terms of the Acquisition change prior to its consummation in such a manner that the consideration received by Holder in the Pre-Closing Purchase is less than Holder would have received if the Pre-Closing Purchase had occurred based on the Acquisition as closed and consummated, and/or (y) the Acquisition terms call for earn-outs or adjustments to be made on a post-Acquisition closing basis, then the Pre-Closing Purchase consideration shall be grossed up to account for such additional consideration at such time as such additional consideration is reasonably determinable and payable to the Company or its equityholders, and the Company shall reserve or otherwise provide for such additional consideration and shall pay it over to Holder when determinable and payable to the Company or its equityholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.8 <u>Warrant Put; Liquidity Events; Put Right Exercise</u>. Notwithstanding anything to the contrary set forth in this Warrant, upon (i) a Liquidity Event during the Term or (ii) at any time within thirty (30) days prior to and including the Expiration Date, subject to Section 1.6, Holder shall have the right (but not the obligation) to exchange this Warrant (a "<u>Put</u>" or the "<u>Put Right</u>") for the net cash sum of $700,000 (the "<u>Put Price</u>"); provided, however, if this Warrant has expired or been Exercised or Exchanged in full or in part at any time during its Term, then Holder shall be deemed to have waived its Put Right on the date of such expiration or Exercise or Exchange in part. For the avoidance of doubt, either this Warrant may be converted, in whole or in part, or the Put Right exercised, but not both; and upon payment of the Put Price, this Warrant shall terminate. The right to be paid the Put Price shall be, upon exercise of the Put Right, a binding and enforceable debt obligation of the Company until paid. Holder shall exercise such Put Right by written notice as provided in this Warrant and <u>Exhibit A</u> hereto, and upon receipt by the Company of such notice (unless the Put Right is withdrawn (or deemed withdrawn as set forth below) by Holder), this Warrant may not be converted and the Expiration Date of this Warrant shall be deemed extended until such time as the Company has paid the Put Price to Holder. The Company shall promptly (and in no event later than five (5) Business Days from the later of (x) Holder's notice to the Company or (y) the applicable Liquidity Event or Expiration Date) pay the Put Price to Holder. Without limiting the parties' obligations under Section 1.7(a) in respect of an Acquisition, Holder shall use all reasonable commercial efforts to provide notice to the Company of its election to convert this Warrant or exercise the Put Right, subject to the last sentence of this Section 1.8, as soon as practicable (but no later than five (5) Business Days) after having received notice of the relevant impending Liquidity Event (or expiration, as the case may be), together with the relevant material details in the case of a Liquidity Event as contemplated in the last paragraph of Section 4.4 hereof. The Company shall reasonably and timely respond to questions Holder may have concerning a Liquidity Event or, in the case of an expiration, the Fair Market Value under Section 1.3(c) hereof so as to enable Holder to make an informed investment decision, and Holder shall notify the Company of any elections in connection with Liquidity Events no later than other shareholders, option holders and/or warrant holders are required to give notice of any election, investment decision or vote in connection with the relevant Liquidity Event. The Put Right in connection with a Liquidity Event is conditional on consummation of the Liquidity Event, and if the applicable contemplated Liquidity Event is abandoned and not consummated, the exercise of a Put Right for such event shall be deemed automatically withdrawn.

**Section 2. Exchange and Transfer of Warrant.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Warrant may be transferred, in whole or in part, subject only to (i) Holder's compliance with applicable securities laws, (ii) the transferee not being a direct competitor of the Company, (iii) the transferee holder of the new Warrant assuming the obligations of Holder set forth in this Warrant and making the representations and warranties of the Holder hereunder, including to be bound by the terms and restrictions of the Company's Constitutional Documents as would apply to stock of the same class and series upon Exercise or Exchange of this Warrant for Warrant Stock. The consent of the Company to a proposed transfer shall not be unreasonably withheld if the foregoing requirements are met to the reasonable and good faith satisfaction of the Company. A transfer of the Warrant may be registered with the Company by submission to it of the Assignment Form attached hereto as <u>Exhibit B</u> duly completed and executed. After the Company's registration of a transfer of this Warrant, the Company will issue and deliver to the transferee a new warrant (representing the portion of this Warrant so transferred) upon the same terms and conditions as this Warrant and in substantially identical form, which the Company will register in the new holder's name. In the event of registration of a partial transfer of this Warrant, the Company shall concurrently issue and deliver to the transferring holder a new warrant that entitles the transferring holder to the balance of this Warrant not so transferred and that otherwise is upon the same terms and conditions as this Warrant. Upon the delivery of this Warrant for transfer, the transferee holder shall for all purposes become the holder of the new warrant issued for the portion of this Warrant so transferred, irrespective of the date of actual delivery of the new warrant representing the portion of this Warrant so transferred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In the event of the loss, theft or destruction of this Warrant, the Company shall execute and deliver an identical new warrant to Holder in substitution therefor upon the Company's receipt of (i) evidence reasonably satisfactory to the Company of such event, and (ii) if requested by the Company, an indemnity agreement in reasonable and customary form.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Company shall pay its own and of all Holder's reasonable out of pocket costs and expenses incurred in connection with its negotiation and documentation, and any opinions of counsel required by the Company as to securities matters on a proposed transfer of this Warrant to an Affiliate.

**Section 3. Certain Covenants.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company shall ensure that any approval of its stockholders required for issuance of this Warrant and of the Warrant Stock issuable upon conversion hereof (which shall, for the avoidance of doubt, include any securities into which Warrant Stock is or becomes convertible) and payment of the Put Price upon exercise of the Put Right (to the extent the same could be characterized as a repurchase of Company securities) shall remain in full force and effect until the earlier of the conversion hereof or the Expiration Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company will not, by amendment of the Constitutional Documents or through reorganization, consolidation, merger, amalgamation, sale of assets or otherwise, avoid or seek to avoid the observance or performance of any of the terms of this Warrant related to the issuance of Warrant Stock. Without limiting the foregoing, the Company will from time to time take all such action as may be necessary or appropriate in order that the Company may validly and legally (i) issue the shares of Warrant Stock upon the conversion of this Warrant, including such Company and stockholder actions as may be required to maintain sufficient availability of its authorized stock for issuance of the Warrant Stock free of pre-emptive rights, adjustments for dilutive issuances, rights of refusal and any other stockholder rights that may be triggered by the issuance of this Warrant and the issuance of Warrant Stock to Holder upon the conversion hereof, or (ii) pay the Put Price upon exercise of the Put Right, free of restrictions in the Company's Constitutional Documents and other agreements with, or consent from, any other Person (other than, after the Loan under the Loan Agreement has been repaid in full, a restriction on payment arising from the priority of secured indebtedness to the Company held by a Lender (made aware of the existence of the Put Right debt obligation) over contractual obligations owing to general unsecured creditor obligations, or a consent or restriction agreed to with such a Lender who is a lender holding such indebtedness, with any such restriction being promptly notified by PFG, <u>provided</u>, that, the Company will use reasonable best efforts not to agree to such explicit restriction or consent with such a Lender and will promptly notify Holder of the existence of any such restrictions or consent obligations by which the Company is bound; and, for the avoidance of doubt, this sentence (x) shall not require the Company to reserve cash to pay the Put Price, but (y) shall require the Company to reflect the contingent obligation represented by the Put Right in its books and records. If the Company fails to pay the Put Price when it is owed upon exercise of the Put Right due to any such restrictions, the Company will issue a promissory note to the Holder for payment of the Put Price with a due date no later than 12 months thereafter, subject to any such restrictions. A "<u>Lender</u>" shall mean a Person who is either (A) not an Affiliate of the Company or (B) an Affiliate of the Company who is participating in secured indebtedness of the Company on a minority basis with Person(s) who are not Affiliates of the Company on substantially the same terms as (or terms that are more favorable to the Company than) the terms with such Person(s) who are not Affiliates of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) So long as Holder or any of its Affiliates holds this Warrant and/or the shares of Warrant Stock, and an IPO has not occurred, the Company shall deliver to Holder (i) such reports as it provides to any holders of securities of the same class and series as the shares of Warrant Stock solely by virtue of their ownership thereof, as and when delivered to such holders, and (ii) copies of any and all valuations performed of the Company or the value of its stock for purposes of Section 409A of the Internal Revenue Code of 1986, as amended, as and when such valuations are made available to the Company. Notwithstanding the foregoing, as long as an IPO has not occurred, the Company shall provide quarterly and annual financial statements that it prepares in the ordinary course and such other information as such Holder may reasonably request and that the Company may lawfully provide at such time under applicable securities laws, regardless of its obligation to provide such information to holders of the same class as the Warrant Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Company shall not treat this Warrant or the shares of Warrant Stock as being granted or issued as property transferred in connection with the performance of services or otherwise as compensation for services rendered.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Company shall not characterize Holder as a stockholder of the Company until such time as Holder converts this Warrant for shares of Warrant Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) This Warrant shall be exempt from pay-to-play and like provisions except to the extent that such provisions arise and are approved by stockholders after this Warrant has been converted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Notwithstanding anything to the contrary set forth in this Warrant, there shall be no requirement imposed on Holder in connection with a Liquidity Event to convert this Warrant, unless (i) the Liquidity Event in question is an Acquisition in which the consideration to be paid to stockholders in connection therewith consists at least 80% of cash and/or Marketable Securities and/or a combination of the foregoing (or other consideration, to the extent Holder had an option to choose cash or Marketable Securities in lieu of such other consideration) (which, assuming proper notice of such Acquisition, would result in the expiration of this Warrant under Section 1.7(a) upon consummation of such an Acquisition if Holder if did not convert this Warrant or exercise the Put Right), or (ii) the Liquidity Event is (A) an IPO or (B) another Liquidity Event consummated at arm's length for fair value, and in each Holder would be able to lawfully liquidate at least 80% of the non-cash consideration in the ordinary course of business during a seven month period, free of any contractual lock-up, regulatory restrictions on transfer or sale, standstills or similar restrictions on transfer or sale, but not including restrictions that are specific to Holder as compared to similarly situated holders.

**Section 4. Adjustments to Number of Shares of Warrant Stock, Etc.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 <u>Adjustments</u>. In order to prevent dilution of the rights granted hereunder, the Number of Shares and Exchange Price shall be subject to adjustment from time to time in accordance with this Section 4. Upon each adjustment of the Exchange Price pursuant to this Section 4, Holder shall thereafter be entitled to acquire upon conversion, at the Exchange Price resulting from such adjustment, (without duplication of a change in the number of shares of Warrant Stock otherwise provided for in this <u>Section 4</u>) the number of shares of Warrant Stock obtainable by multiplying the Exchange Price in effect immediately prior to such adjustment by the number of shares of Warrant Stock acquirable immediately prior to such adjustment and dividing the product thereof by the new Exchange Price resulting from such adjustment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 <u>Subdivisions, Combinations and Stock Dividends</u>. If the Company shall at any time subdivide, by split-up or otherwise, the class and series of the Company's securities into which this Warrant could then be converted into a greater number of shares of stock, or issue additional securities as a dividend, bonus issue, or otherwise with respect to such securities into which this Warrant could be converted, then the Exchange Price in effect immediately prior to such subdivision or share dividend or bonus issue shall be proportionately reduced and the number of shares of stock acquirable upon exchange hereunder shall be proportionately increased. Conversely, if the class and series of the Company's securities into which this Warrant could then be converted are combined into a smaller number of shares of stock, the Exchange Price in effect immediately prior to such combination shall be proportionately increased and the number of shares of stock acquirable upon exchange hereunder shall be proportionately decreased.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 <u>Reclassification, Exchange, Substitutions, Etc.</u> Upon any reclassification, exchange, substitution, or other event that results in a change of the number and/or class of the securities issuable upon exchange or exercise of this Warrant, Holder shall be entitled to receive, upon conversion of this Warrant, the number and kind of securities and property that Holder would have received for the Warrant Stock if this Warrant had been converted immediately before such reclassification, exchange, substitution, or other event. Such an event shall include any automatic conversion of the outstanding or issuable securities of the Company of the same class or series as the Warrant Stock to Common Stock pursuant to the Constitutional Documents upon the closing of a public offering of the Company's Common Stock. The Company or its successor shall promptly issue to Holder an amendment to this Warrant setting forth the number and kind of such new securities or other property issuable upon exchange or exercise of this Warrant as a result of such reclassification, exchange, substitution or other event that results in a change of the number and/or class of securities issuable upon exchange or exercise of this Warrant. The amendment to this Warrant shall provide for adjustments (as determined in good faith by the Board) which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 4 including, without limitation, adjustments to the Exchange Price and to the number of securities or property issuable upon exchange of the new Warrant. The provisions of Sections 4.2 and 4.3 shall similarly apply to successive subdivisions, combinations, stock dividends, distributions, reclassifications, exchanges, substitutions, and dilutive events.

4.4 <u>Notices of Record Date, Etc</u>. In the event that the Company shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) declare or propose to declare any dividend on any class or series of the Company's stock, whether payable in cash, property, stock or other securities and whether or not a regular cash dividend, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) offer for sale any additional shares of any class or series of the Company's stock or securities exchangeable for or convertible into such stock in any transaction that would give rise (regardless of waivers thereof) to pre-emptive rights of any class or series of stockholders, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) effect or approve any reclassification, exchange, substitution or recapitalization of the capital stock of the Company, including any subdivision or combination of its outstanding stock, or consolidation or merger of the Company with, or sale of all or substantially all of its assets to, another corporation, or to liquidate, dissolve or wind up (including an assignment for the benefit of creditors) or a reorganization of the Company, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) offer holders of registration rights the opportunity to participate in any underwritten public offering of the Company's securities, or receive a notice or demand for redemption of any class or series of Company securities, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) seek stockholder approval for, approve, effect or consummate any transaction or result that would constitute a Liquidity Event,

<u>then</u>, in connection with such event, the Company shall give to Holder:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) at least ten (10) Business Days prior written notice of the date on which the books of the Company shall close or a record shall be taken for such a distribution or offer in respect of the matters referred to in (1) or (2) above, or for determining rights to vote in respect of the matters referred to in (3) above; 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;(ii) in the case of the matters referred to in (4) and (5) above, the greatest of (A) ten (10) Business Days prior written notice of the date when the same is proposed to be consummated, (B) in respect of an Acquisition, the notices provided in Section 1.7(a) (including the Company's notice of a Pre-Closing Purchase), and (C) the first date notice of such Acquisition is provided to any class or series of capital stock of the Company generally.

Such notice in accordance with the foregoing clause (1) shall also specify, in the case of any such distribution, the date on which the holders of Company securities shall be entitled thereto and the material terms of such distribution, and such notice in accordance with clause (3) shall also specify the date on which the holders of Company securities shall be entitled to convert their stock for securities or other property deliverable upon such reorganization, reclassification, exchange, substitution, consolidation, merger or sale, as the case may be, and the material terms of such exchange. With respect to such notice in accordance with clauses (4) and (5), upon request of Holder, the Company will provide such reasonable detail and description as would enable a reasonable financial investor to make an informed investment decision with respect to such matters. Each such written notice shall be given in accordance with Section 9.

&nbsp;&nbsp;&nbsp;&nbsp;4.5 <u>Adjustment for Capitalization Table Errors</u>. The parties acknowledge their mutual agreement that the initial Number of Shares is based on the capitalization of the Company being in all material respects as represented to Holder and appended hereto as <u>Exhibit D</u>, on a post-Warrant basis. If the Fully-Diluted equity of the Company is not, as of the Issue Date, in fact as represented in Section 6.3 and <u>Exhibit D</u>, the Number of Shares and / or Exchange Price shall be equitably adjusted under Section 4.6.

&nbsp;&nbsp;&nbsp;&nbsp;4.6 <u>Duty to Make Equitable Adjustments</u>. If any event occurs that does not fall within the generic terms used in Section 4.2 or 4.3 (such as merger or reorganization) but is similar to such terms and within the scope of the purpose for adjustment provisions generally in warrants in order to maintain the economic value of the warrant and underlying equity stock relative to other holders of equity, then the Board shall make an adjustment in the application of such provisions so that the effect of such event on the rights and economics of Holder are not advantaged nor disadvantaged relative to the rights and economics of equity holders generally.

&nbsp;&nbsp;&nbsp;&nbsp;4.7 <u>Officer's Statement as to Adjustments</u>. Whenever the Number of Shares subject to this Warrant is required to be or is adjusted as provided in Section 4, the Company shall deliver to Holder's address for notices hereunder a statement, signed by the secretary, chief executive officer, or chief financial officer of the Company, showing in reasonable detail the facts requiring such adjustment and the number of issuable shares of Warrant Stock that will be effective after such adjustment. If such notice relates to an adjustment resulting from an event referred to in Section 4.3, such notice shall be included (to the extent known) as part of the notice required to be mailed or published under the provisions of Section 4.4.

&nbsp;&nbsp;&nbsp;&nbsp;4.8 <u>Issue of Securities other than Warrant Stock</u>. In the event that at any time, as a result of any adjustment made pursuant to Section 4, Holder thereafter shall become entitled to receive any securities of the Company, other than shares of Warrant Stock, thereafter the number of such other securities so receivable upon conversion of this Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Warrant Stock contained in Section 4.

**Section 5. Rights and Obligations of the Warrant Holder**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 <u>Rights as a Stockholder</u>**.** Nothing contained herein shall entitle the Holder to any rights as a stockholder of the Company or to be deemed the holder of any securities that may at any time be issuable on the exercise of the rights hereunder for any purpose nor shall anything contained herein be construed to confer upon the Holder, as such, any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value or change of stock to no par value, consolidation, merger, conveyance or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or any other rights of a stockholder of the Company until the rights under the Warrant shall have been exercised and the shares of Warrant Stock purchasable upon exercise of the rights hereunder shall have become deliverable as provided herein. For the avoidance of doubt, this Warrant shall entitle Holder, upon conversion, to the benefit of all rights as are applicable to a stockholder of the Company holding shares of stock that are the same class and series as the shares of Warrant Stock by virtue of their ownership thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 <u>Constitutional Documents.</u> If Holder exercises this Warrant, Holder shall execute and deliver to the Company such joinder documentation as is reasonably necessary for Holder to become a party (if Holder is not already a party) to the Constitutional Documents as a Key Holder thereunder, but only if execution of such Constitutional Documents is required of all other stockholders (other than Excepted Purchasers) holding the same or greater number of Company securities at such time. Holder hereby acknowledges that the Warrant Stock issuable upon exercise of this Warrant shall be subject to the terms of the Constitutional Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 <u>Lock-Up Agreement</u>. Holder agrees that the Warrant and the Warrant Stock, shall be subject to the lock-up provisions in Section 5 of the ROFR Agreement, as if a part of this Warrant to the same extent as other stockholders (other than Excepted Purchasers) holding the same or a greater number of Company securities are so required at such time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4 <u>Confidentiality</u>. Holder agrees to be bound by the confidentiality obligations set forth in Section 7 of the Voting Agreement (including with respect to information received by the Holder as a holder of the Warrant or Warrant Stock) as if a part of this Warrant. <u>Sections 5.3 and 5.4</u> shall survive any termination or expiration of the Warrant.

**Section 6. Representations, Warranties and Covenants of the Company**. The Company represents and warrants to Holder as of the Issue Date that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1. <u>Corporate Power; Authorization</u>. The Company has all requisite corporate power and has taken all requisite corporate action to execute and deliver this Warrant, to issue this Warrant and the Warrant Stock and to carry out and perform all of its obligations hereunder. This Warrant has been duly authorized, executed and delivered on behalf of the Company and constitutes the valid and binding agreement of the Company, enforceable in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization or similar laws relating to or affecting the enforcement of creditors' rights generally and (ii) as limited by equitable principles generally. Any person executing this Warrant on behalf of the Company is a duly authorized officer of the Company with all necessary legal authority to bind the Company generally and with the specific legal authority to cause the Company to execute and deliver this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2. <u>Validity of Securities</u>. This Warrant, when sold by the Company for the consideration therefor as provided herein, will be validly authorized, issued and fully paid. The issuance and delivery of this Warrant is not subject to any consent, approval, preemptive or any similar rights of the stockholders of the Company (which has not been duly secured or waived), including without limitation any pre-emptive rights, or any Liens or encumbrances except for restrictions on transfer provided for herein or under applicable securities laws; and, as a continuing covenant of the Company, when and if Warrant Stock is issued upon conversion and in accordance with the terms hereof and this Warrant is converted for such Warrant Stock, such issuance of the Warrant will not be subject to any of the afore-specified consent, approval, preemptive or any similar rights of stockholders or the Company and such securities will be, at each such issuance, validly issued shares of Warrant Stock in the Company's capital, in compliance with all applicable securities laws and free of any Liens or encumbrances except for restrictions on transfer set forth in Section 2 hereof, in the Constitutional Documents or under such applicable securities laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3. <u>Capitalization</u>. The authorized capital of the Company (after giving effect to the issuance of shares of capital stock to Eywin Bilgi Teknolojileri A.S. on or about the date hereof) consists of (x) 3,005,150,000 shares of common stock, $0.0001 par value per share, of which 785,842,164 are issued and outstanding, which consist of (i) 2,125,000,000 shares of Class A Common Stock, of which 646,825,014 are issued and outstanding, (ii) 268,000,000 shares of Class B Common Stock, of which 21,043,178 are issued and outstanding, (iii) 12,150,000 shares of Class C Common Stock, of which 10,993,629 are issued and outstanding, and (iv) 600,000,000 shares of Class AAA Common Stock, of which 106,980,343 are issued and outstanding and (y) 388,800,000 shares of Preferred Stock, all of which are designated as shares of Series Seed Preferred Stock, of which 353,712,906 are issued and outstanding. As of the date hereof, the Company has reserved a total of 268,000,000 shares of its Class B Common Stock for issuance under its Nativ Mobile, Inc. 2021 Stock Incentive Plan, of which 209,407,222 shares are reserved for issuance upon exercise of outstanding options. Before giving effect to this Warrant, the Company has issued warrants to acquire an aggregate of 3,721,875 shares of Class AAA Common Stock. A true, correct and current copy of the Company's current Amended and Restated Articles of Incorporation is appended as <u>Exhibit C</u> hereto. Except as specified in this Warrant or <u>Exhibit D</u>, there are no other options, warrants, conversion privileges or other contractual rights presently outstanding to purchase or otherwise acquire any authorized but unissued shares of the Company's capital stock or other securities. <u>Exhibit D</u> hereto sets forth a summary capitalization table of the Company which is true, correct accurate and complete as of the Issue Date (after giving effect to the issuance of this Warrant and the issuance of shares of capital stock to Eywin Bilgi Teknolojileri A.S. on or about the date hereof). Assuming the issuance of all shares of Warrant Stock issuable hereunder (and after giving effect to the issuance of shares of capital stock to Eywin Bilgi Teknolojileri A.S. on or about the date hereof), Holder (together with its Affiliate Warrant holder) would own as of the Issue Date approximately 0.43% of the Fully-Diluted equity of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4. <u>No Conflict</u>. Assuming the accuracy of the representations and warranties of Holder in Section 7 hereof, the execution and delivery of this Warrant do not, and the consummation of the transactions contemplated hereby and thereby will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both), or give rise to a right of termination, cancellation or acceleration of any obligation or to a loss of a material benefit (which has not been duly secured or waived), under, any provision of the Constitutional Documents, as amended, or any mortgage, indenture, lease or other agreement or instrument, permit, concession, franchise, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to the Company, its properties or assets, the effect of which would have a material adverse effect on the Company or materially impair or restrict its power to perform its obligations as contemplated hereby, subject to the filings described in <u>Section 6.5</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5. <u>Governmental, Company and Stockholder Consents</u>. As at the Issue Date, assuming the accuracy of the representations and warranties of Holder in Section 7 hereof, no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any governmental authority or other person or entity is required on the part of the Company in connection with the issuance, sale and delivery of this Warrant and the issuance of the Warrant Stock, except such filings as shall have been made prior to and shall be effective on and as of the date hereof and filings pursuant to applicable securities laws, which have been made or will be made in a timely manner. All Company and stockholder consents required in connection with issuance of this Warrant and Warrant Stock have either been irrevocably given in connection prior to or contemporaneously with the execution of this Warrant and the Warrant terms are thereby deemed approved by the Company and its stockholders (if such consents are required).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6. <u>Exempt from Registration</u>. As at the Issue Date, assuming the accuracy of the representations and warranties of Holder in Section 7 hereof, the offer, sale and issuance of this Warrant and the Warrant Stock will be exempt from any registration requirements of the Securities Act, the registration and qualification requirements of applicable state securities laws.

**Section 7. Representations and Warranties of Holder**. Holder represents and warrants to the Company that the following are true, correct, and complete as of the Issue Date as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 <u>Investment Experience</u>. Holder is an "accredited investor" within the meaning of Rule 501 under the Securities Act, and was not organized for the specific purpose of acquiring this Warrant or the Warrant Stock issuable upon conversion of this Warrant (collectively, the "<u>Warrant Securities</u>"). Holder is aware of the Company's business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Warrant Securities. Holder has such business and financial experience and sophistication as is required to give it the capacity to protect its own interests in connection with the purchase of this Warrant and the Warrant Stock. The Holder has had an opportunity to discuss the Company's business, management, financial affairs and the terms and conditions of the sale and issuance of the Warrant Securities with the Company's management and has had an opportunity to review the Company's facilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 <u>Investment Intent</u>. Holder is purchasing this Warrant for investment for its own account only and not with a view to, or for resale in connection with, any "distribution" thereof within the meaning of the Securities Act. Holder understands that the Warrant Securities have not been registered under the Securities Act or registered or qualified under any state securities law in reliance on specific exemptions therefrom, which exemptions may depend upon, among other things, the bona fide nature of Holder's investment intent as expressed herein. Holder understands that the Warrant Securities are "restricted securities" under applicable U.S. federal and state securities laws and that, pursuant to these laws, Holder must hold the Warrant Securities indefinitely unless they are registered with the Securities and Exchange Commission and qualified by state authorities, or an exemption from such registration and qualification requirements is available. Holder acknowledges that the Company has no obligation to register or qualify the Warrant Securities, or the Common Stock into which it may be converted, for resale. Holder further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the Warrant Securities, and on requirements relating to the Company which are outside of Holder's control, and which the Company is under no obligation and may not be able to satisfy. Holder understands that no public market now exists for the Warrant Securities, and that the Company has made no assurances that a public market will ever exist for the Warrant Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 <u>Authorization</u>. Holder has all requisite power and has taken all requisite action required of it to carry out and perform all of its obligations hereunder. The execution and delivery of this Warrant has been duly authorized, executed and delivered on behalf of Holder and constitutes the valid and binding agreement of Holder, enforceable in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization or similar laws relating to or affecting the enforcement of creditors' rights generally and (ii) as limited by equitable principles generally. The consummation of the transactions contemplated herein and the fulfillment of the terms herein will not result in a breach of any of the terms or provisions of Holder's constitutional documents or instruments. Any person executing this Warrant on behalf of Holder is a duly authorized officer of Holder with all necessary legal authority to bind Holder generally and with the specific legal authority to cause Holder to execute and deliver this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4. <u>No "Bad Actor" Disqualification</u>*.*** Neither (i) the Holder, (ii) any of its directors, executive officers, other officers that may serve as a director or officer of any company in which it invests, general partners or managing members, nor (iii) any beneficial owner of any of the Company's voting equity securities (in accordance with Rule 506(d) of the Securities Act) held by the Holder is subject to any of the "bad actor" disqualifications described in Rule 506(d)(1)(i) through (viii) under the Securities Act, except as set forth in Rule 506(d)(2)(ii) or (iii) or (d)(3) under the Securities Act and disclosed, reasonably in advance of the acceptance of this Warrant, in writing in reasonable detail to the Company. Holder is a United States person (as defined by Section 7701(a)(30) of the Code).

**Section 8. Restrictive Securities Legend; Recordation of Warrant Ownership**.

This Warrant and the Warrant Stock have not been registered under any securities laws. Accordingly, any stock certificates issued pursuant to the conversion of this Warrant shall (until receipt of an opinion of counsel in customary form that such legend is no longer necessary) bear the following legend and any legends required by the Constitutional Documents or the securities laws of any applicable State:

THIS WARRANT AND THE SHARES OF WARRANT STOCK ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE LAWS OF ANY STATE OR OTHER JURISDICTION AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OF DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN CUSTOMARY FORM THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT OR OTHER APPLICABLE JURISDICTION'S LAW.

The Company shall record and reflect the issuance of this Warrant and any Warrant Stock issued upon conversion of this Warrant and Holder's record ownership of this Warrant in its books and records (or that of its transfer agent), including in all iterations of its capitalization table, and shall maintain such books and records (or cause such maintenance by any transfer agent or custodian used by the Company to maintain records of equity issuances) at all times during the Term.

**Section 9. Notices**.

All notices to be given under this Warrant shall be in writing and shall be given: (i) personally, (ii) by reputable private delivery service, (iii) by regular first-class mail, or certified mail return receipt requested, (iv) by fax, or (v) by electronic mail. If sent by fax, such notice shall also be sent concurrently by one of the other methods provided herein. Notices may be sent to the parties in accordance with their contact details specified below or to any other address, fax number or electronic mail address later designated in writing by a party. All notices shall be deemed to have been given upon delivery in the case of notices personally delivered, or at the expiration of one Business Day following delivery to the private delivery service during its Business Day prior to such delivery service's drop-off deadline for next Business Day delivery, or five (5) Business Days following the deposit thereof in the United States mail, with postage prepaid, or upon receipt during the Business Day where received in the case of notices sent by fax or electronic mail, but, with respect to a fax, subject to reasonably concurrent transmission by another method, as specified above. The addresses for such communications shall be:

if to Holder, at

Partners for Growth VII, L.P.

1751 Tiburon Blvd.

Tiburon, California 94920

Attention: Chief Financial Officer

Fax: [_]

Email: [_]

with a copy (not constituting notice) to

Greenspan Law Office

Attn: Benjamin Greenspan, Esq.

620 Laguna Road

Mill Valley, CA 94941

Fax: [_]

Email: [_]

with the original of this Warrant and any replacement, restatement or reissue of this Warrant to be delivered to:

Partners for Growth VII, L.P.

1751 Tiburon Blvd.

Tiburon, California 94920

Attention: [_]

or

if to the Company, at

Mode Mobile, Inc.

One East Erie Street, Suite 525 (#342)

Chicago, Illinois 60611

Attn: Justin Hines

with a copy (which shall not constitute notice to the Company) to:

[_]

Each party hereto may from time to time change its address for notices under this Section 9 by giving notice of such changes of address to the other party hereto as set forth in this Section 9 herein above.

**Section 10. Amendments and Waivers**.

This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought.

**Section 11. Applicable Law; Severability**.

This Warrant shall be governed by and construed and enforced in accordance with the laws of the State of Delaware. If any one or more of the provisions contained in this Warrant, or any application of any provision thereof, shall be invalid, illegal, or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and all other applications of any provision thereof shall not in any way be affected or impaired thereby. Each of the Holder and the Company waives, to the fullest extent permitted by law, any and all right to trial by jury in any legal proceeding (whether based on contract, tort or otherwise) arising out of or related to this Warrant.

California Corporate Securities Law. THE SALE OF THE SECURITIES THAT ARE THE SUBJECT OF THIS WARRANT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102, OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS WARRANT ARE EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

**Section 12. Electronic Execution of Warrant; Counterparts**.

The parties agree that this Warrant may be signed electronically by a party and, in such case, this Warrant shall be deemed to be an electronic record as such term is defined in Section 1633.2(g) of the Uniform Electronic Transactions Act enacted in the State of California (UETA) signed by the parties using electronic signatures (as defined in Section 1633.2(h) of UETA. The parties irrevocably agree to recognize and accept the use of electronic signatures and records in connection with the execution, storage and delivery of this Warrant, whether for purposes of transfer, enforcement or otherwise. Accordingly, and consistent with Sections 1633.12(d) and 1633.13 of UETA, any requirement that this Warrant must be tendered in original form or manually signed shall be deemed satisfied by delivery of any transmitted or delivered paper form of this Warrant and the same may not be excluded as evidence of this Warrant in any proceeding solely because this Warrant was executed in whole or in part in electronic form. As an ongoing obligation, the Company shall procure that no transfer agent, acquiring party or Company equity holder representative (e.g., responsible person for distributing proceeds of a merger or sale transaction to equity holders) refuse to accept delivery of this Warrant as electronically signed, delivered and/or stored as a condition to receiving consideration due in connection with this Warrant. To the extent that a third party fails to recognize this Warrant as electronically signed, the Company shall treat this Warrant as lost or stolen under Section 2(b) of this Warrant (except that Holder shall not be required to give any indemnity or undertaking as a condition to replacement of this Warrant) and shall promptly manually execute and deliver to Holder for its manual execution a replacement Warrant, all costs of which shall be for the account of the Company. This Warrant may be executed by one or more of the parties hereto in any number of separate counterparts, all of which together shall constitute one and the same instrument.

**Section 13. Construction, Misc**.

Section headings are only used in this Warrant for convenience. The Company and Holder each acknowledge that the headings may not describe completely the subject matter of the applicable Section, and the headings shall not be used in any manner to construe, limit, define or interpret any term or provision of this Warrant. The failure of Holder to pay or the Company to negotiate any check issued for the Notional Price shall have no effect on the lawful issuance, validity or enforceability of this Warrant. References to terms "as defined in the Loan Agreement" shall be valid and effective whether or not the Loan Agreement is in full force and effect or is no longer in effect. This Warrant has been fully reviewed and negotiated between the parties and no uncertainty or ambiguity in any term or provision of this Warrant shall be construed strictly against either party under any rule of construction or otherwise. This Warrant may be signed electronically or in counterparts. Except as expressly set forth herein, this Warrant (including the exhibits attached hereto and agreements contemplated hereby) constitutes the entire agreement and understanding of the Company and the Holder with respect to the subject matter hereof and supersede all prior agreements and understandings relating to the subject matter hereof.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed on the day and year first above written.

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| | | | |
|:---|:---|:---|:---|
| COMPANY: | COMPANY: | ACKNOWLEDGED AND AGREED: | ACKNOWLEDGED AND AGREED: |
| MODE MOBILE, INC. | MODE MOBILE, INC. | HOLDER: | HOLDER: |
| By: | */s/ Prakash Ramachandran* | Partners for Growth VII, L.P. | Partners for Growth VII, L.P. |
| Name: | Prakash Ramachandran |  |  |
| Title: | Chief Financial Officer | By: | *Andrew Kahn* |
|  |  | Name: | Andrew Kahn |
|  |  | Title: | Manager, Partners for Growth VII, LLC, its General Partner |

---

*(Partners for Growth VII, L.P. / Mode Mobile, Inc. Warrant Signature Page)*

To: [\*]

ELECTION TO EXCHANGE, EXERCISE OR "PUT"

The undersigned hereby exercises its right to **Exchange** its Warrant for _________________ :

☐ shares of Common Stock to be converted by Exchange hereunder

The undersigned hereby exercises its right to **Exercise** its Warrant for _________________ fully paid, validly issued and nonassessable:

☐ shares of Common Stock and tenders payment of the aggregate Exchange Price of $________ for such shares by check payable to order of the Company enclosed herewith or wire transfer of immediately available funds to the Company's account

☐ The undersigned hereby **exercises its Put Right** under its Warrant for all Warrant Stock.

[check one box]

covered by the attached Warrant in accordance with the terms thereof, and requests that certificates or other legal evidence of ownership of such shares of Warrant Stock be issued in the name of, and delivered to:

______________________

______________________

______________________

By its execution below and for the benefit of the Company, Holder hereby restates each of the representations and warranties in Section 7 of the Warrant as of the date hereof.

Holder hereby (a) agrees that the Warrant Stock and any other shares of capital stock or securities required by the ROFR Agreement and Voting Agreement to be bound thereby, shall be bound by and subject to the terms of such agreements and (b) adopts such agreements with the same force and effect as if Holder were originally a party thereto, as a Key Holder thereunder, but only if execution of such agreements is required of all other stockholders (other than Excepted Purchasers) holding the same or greater number of Company securities at the date of this Election.

---

| | |
|:---|:---|
| Date: | [Holder] |
|  | By: |
|  | Name: |
|  | Title: |

---

<u>Exhibit B</u>

Assignment Form

To: [\*]

The undersigned hereby assigns and transfers this Warrant to

_________________________________________________

(Insert assignee's social security or tax identification number)

____________________________________________________________________

(Print or type assignee's name, address and postal code)

____________________________________________________________________

____________________________________________________________________

and irrevocably appoints _______________________________________ to transfer this Warrant on the books of the Company.

__________________

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| | | |
|:---|:---|:---|
| Date: | Partners for Growth VII, L.P. | Partners for Growth VII, L.P. |
|  | By: |  |
|  | Name: | _______________, Manager of Partners for Growth VII, LLC, |
|  | Its General Partner | Its General Partner |

---

By its execution below and for the benefit of the Company, the assignee described above hereby makes each of the representations and warranties in Section 7 of the Warrant as of the date hereof, agrees to be bound by the terms and conditions of the Warrant, and assumes the obligations of the Holder under the Warrant.

---

| | |
|:---|:---|
| ASSIGNEE: | ASSIGNEE: |
| By: |  |
| Name: | __________________________, ________________ |

---

<u>Exhibit C</u>

<br> Amended and Restated<br> Certificate of Incorporation

[Omitted]

<u>Exhibit D</u>

<br> Capitalization Table

[Omitted]