# EDGAR Filing Document

**Accession Number:** 0000095572
**File Stem:** 0001731122-25-001019
**Filing Date:** 2025-7
**Character Count:** 627223
**Document Hash:** 6a4acf616e92a17f939c2b92c3c90a6c
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001731122-25-001019.hdr.sgml**: 20250724

**ACCESSION NUMBER**: 0001731122-25-001019

**CONFORMED SUBMISSION TYPE**: 10-12G

**PUBLIC DOCUMENT COUNT**: 94

**FILED AS OF DATE**: 20250724

**DATE AS OF CHANGE**: 20250724

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** KiNRG, Inc.
- **CENTRAL INDEX KEY:** 0000095572
- **STANDARD INDUSTRIAL CLASSIFICATION:** GOLD & SILVER ORES [1040]
- **ORGANIZATION NAME:** 01 Energy & Transportation
- **EIN:** 826008752
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-12G
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-53035
- **FILM NUMBER:** 251148008

**BUSINESS ADDRESS:**
- **STREET 1:** 839 BESTGATE ROAD
- **STREET 2:** SUITE 400
- **CITY:** ANNAPOLIS
- **STATE:** MD
- **ZIP:** 21401
- **BUSINESS PHONE:** 443-227-4545

**MAIL ADDRESS:**
- **STREET 1:** 839 BESTGATE ROAD
- **STREET 2:** SUITE 400
- **CITY:** ANNAPOLIS
- **STATE:** MD
- **ZIP:** 21401

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** SOLAR WIND ENERGY TOWER, INC.
- **DATE OF NAME CHANGE:** 20130311

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** CLEAN WIND ENERGY TOWER, INC.
- **DATE OF NAME CHANGE:** 20110121

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** SUPERIOR SILVER MINES INC
- **DATE OF NAME CHANGE:** 20000101

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10**

**GENERAL FORM FOR REGISTRATION OF SECURITIES**

**Pursuant to Section 12(b) or (g) of**

**The Securities Exchange Act of 1934**

**KiNRG, Inc.**

(Exact name of registrant as specified in its charter)

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| | |
|:---|:---|
| **Nevada** | **82-6008752** |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |

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| | |
|:---|:---|
| **1213 Culbreth Drive Suite 103, Wilmington, NC 28405** | **1213 Culbreth Drive Suite 103, Wilmington, NC 28405** |
| (Address of principal executive office) | (Zip Code) |

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Registrant's telephone number, including area code **<u>443-227-4545</u>**

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

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

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| |
|:---|
| Common Stock, par value $0.0001 per share |
| (Title of class) |

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

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

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

**Cautionary Note on Forward-Looking Statements**

This Form 10 Registration Statement contains information that may not be historical facts but should be considered to be "forward-looking statements" as that term is defined by the federal securities laws. All forward-looking statements are based upon current expectations and various assumptions and apply only as of the date that this document is written. The Company's expectations, beliefs, and projections are expressed in good faith, and the Company believes there is a reasonable basis for them. However, there can be no assurance that these expectations, beliefs and projections will be achieved or if they are achieved that the forward-looking statements contained herein will come to fruition.

Forward-looking statements are generally identified by the words "may", "will", "could", "would", "should", "expect", "intend", "plan", "anticipate", "hope", "believe", "estimate", "predict", "likely", "project", "potential", "continue", "ongoing", "forecast", "strategy" as well as variations of such words or similar expressions.

Forward-looking statements involve known and unknown risks, future risks, uncertainties, matters which are beyond the Company's control, and any or all of these or other factors could cause actual results or plans to differ materially from those expressed, implied or contemplated. The forward-looking information is based on various factors, including but not limited to, economic, legislative, industry, and other circumstances, and is derived using numerous assumptions. The identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the likelihood of achieving the performance enumerated in those forward-looking statements.

These forward-looking statements reflect the Company's current views about future events and are subject to risks, uncertainties and assumptions. Forward-looking statements include, but are not limited to, statements concerning the Company's

● business plans and strategy;

● projected profitability, performance, or cash flows;

● future capital expenditures;

● growth strategy, including the ability to grow organically and through mergers and acquisitions("M&A");

● anticipated financing needs;

● business trends;

● capital allocation strategy;

● liquidity and capital management; and

● other information that is not historical information.

There are a number of risks, uncertainties, and other important factors that could cause actual results to differ materially from those suggested by the Company's forward-looking statements, including, but not limited to, those set forth in "Item 1. Business" and "Item 1A. Risk Factors" of this Form 10 Registration Statement. All forward-looking statements are expressly qualified in their entirety by such cautionary statements. The Company undertakes no obligation to update, revise or publicly release the results of any revision to any forward-looking statements that have been made to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events, except as may be required by law. Given these risks and uncertainties, investors are cautioned not to place undue reliance on such forward-looking statements.

*Unless the context provides otherwise, all references in this prospectus to "KiNRG," "we," "us," "our," the "Company," or similar terms, refer to KiNRG, Inc. and its directly and indirectly owned subsidiaries on a consolidated basis.* 

***Item 1. Business***

 ****

**Overview**

Our core objective and focus is to become a leading provider of clean efficient green energy and green hydrogen to the world communities at a reasonable cost without the destructive residuals of fossil fuel, while continuing to generate innovative technological solutions for today and tomorrow's electrical power needs.

We have assembled a team of experienced business professionals, engineering and scientific consultants with the proven ability to bring the idea to market. We have filed and been issued patents that we believe will further enhance this potentially revolutionary technology.

We have, designed, engineered, developed and are preparing to construct both large and smaller Solar Thermal Tower Reactors that use benevolent, non-toxic natural elements to generate electricity economically by integrating and synthesizing numerous proven as well as emerging technologies. In addition to constructing large and smaller Solar Thermal Tower Reactors in the United States and abroad, the Company intends to establish partnerships at home and abroad to propagate these systems and meet increasing global demand for electricity. The Company is developing a smaller "modular" reactor to support AI data centers and other applications where a constant 24/7/365 base load is required.

**A Bold New Energy Solution**

The United States and other nations are aggressively pursuing energy independence with clean, sustainable energy solutions. KiNRG offers a bold new approach to overcome the current limitations of other known alternative energy sources. The Solar Thermal Tower Reactors (STTR) combines dry air heated by the solar rays of the sun with water added as a catalyst reacting to create a powerful natural downdraft.

**Hybrid Solar/Wind Technology** 

We view ourselves as a "Thermal" technology because the simplicity of our solution is the harnessing of the natural power of a downdraft created when water is introduced to hot dry air and "reacts" by evaporating within the confines of our tower structure.

**Industry Analysis**

Electricity is one of the essential sources to meet our growing demand for energy. At the same time, greenhouse gas emissions, primarily CO<sub>2</sub>, must be reduced in order to protect the climate. To reconcile these two conflicting needs, more electricity from clean, renewable sources needs to be made available. Furthermore, there is a global demand for massive amounts of electricity to power the emerging AI industry. Lack of energy combined with an aging grid demand "Behind the Meter" stand alone systems such as the STTR.

Renewable energy sources are becoming increasingly important. The impact of the transition toward renewable energy sources becomes more apparent when looking at the amount of energy consumption expected in 2050: Worldwide in total more than 40.000TWh should come from renewables – this means a sevenfold increase from today.

For an industry that has focused heavily on solar and wind, supportive federal actions could help progress timelines for further expansion into new technologies, including advanced batteries and other forms of storage, offshore wind, and green hydrogen technology. As these new technologies, especially green hydrogen production and storage, move toward commercialization, we may see more power-to-x projects to store, convert, and reconvert surplus solar and wind power into carbon-neutral fuels and chemicals.

The potential for increasing renewable energy demand, as well as the electrification of the transportation and industrial sectors and oil and gas companies' plans to increase participation in the electricity value chain, are accelerating energy industry convergence. These trends may foster collaboration that gives rise to new business models and helps advance the energy transition.(Deloitte)

As renewable energy gains wider acceptance, competition may increase as large, well-capitalized companies enter the business. Although one or more may be successful, KiNRG believes that its technological expertise and early entry will provide a degree of competitive protection

**Background/Technology**

***Innovative Renewable Energy Technology***

 ****

Over the past decade KINRG, has used its resources to develop and refine a means to generate carbon free electricity with no residual waste, 24/7/365.

The concept of harnessing thermal energy from hot air and water has been contemplated for a number of years but no one has been able to create an economic model that was stable, viable, and sustainable. We have tested, prototyped, and patented the finished generating facility capable of producing energy that is significantly more efficient, cost effective, and reliable than either traditional solar or wind. A clean power source that does not degrade over years, that is safe for wildlife and birds, and complimentary to the ecosystem has arrived.

KINRG, has worked diligently with qualified and experienced management to bring this novel clean energy solution to market. The efforts have been supported by large successful companies in conjunction with academia. Consultants to the Company include department heads from universities including N.C. State University (Physicist), Penn State University (Meteorology), Georgia Tech (Aerospace & CFD), University of Oklahoma (Meteorology), and Milwaukee School of Engineering (Fluid Dynamics & CFD).

**THE SOLAR THERMAL TOWER REACTOR**

The working principle of the STTR is based on "Evaporative Cooling", a fundamentally and accurately predictable scientific principle – "cold air sinks". When water-soaked air evaporates, the result of the reaction is that the air is cooled. Locate a tall enough hollow tower in hot dry climate, saturate the incoming hot/dry air with water and the water soaked air near the top of the tower will immediately begin to react and evaporate, which means it cools and falls, creating a natural downdraft contained inside the hollow tower cylinder reactor.

Benefiting from 12 years of hourly weather statistics provided by the Department of Defense to the Company, a reliable data base of the weather 24/7/365 in Yuma, Arizona was created. Using that historical hourly weather data, the dimensions of the Tower were designed based on the amount of downdraft energy that is needed to be created to support the cost of constructing the Tower so that the project would more than pay for itself with the sales from the electricity to be sold.

The KiNRG staff and consultants are well experienced in construction and development. Once the construction challenge was overcome with contractors willing to guarantee fixed prices and date certain construction time frames, and knowing the science was sound, finding a suitable site and then completing a final design specific to a site is the goal.

**Intellectual Property**

We own six U.S. patents. The term of individual patents depends upon the legal term for patents in the countries in which they are obtained. In most countries, including the United States, the patent term is 20 years from the earliest filing date of a non-provisional patent application.

KiNRG believes our intellectual property rights provide a barrier to entry for potential competitors. The patents cover a system of efficiently extracting energy while using "simple and proven" methods with "off the shelf" components, producing cost effective energy. KiNRG has more recently filed applications for additional coverages.

Two scientific principles impact wind energy. First, when one doubles wind velocity the kinetic energy is cubed. That is why Hurricane Category 1 begins with winds of 74 mph, and a Category 5 begins with winds of 157 mph. Minimal damage is expected from 74 mph winds, while 157 mph sustained winds are totally destructive. Second, Betts Law states that no turbine can capture more than 59.3% of the wind's kinetic energy in an "open environment". Add to those two scientific facts, traditional wind turbines are hooked directly to their generators and "brake" in wind speed in excess of 35 mph to avoid damaging the generator.

The STTR creates internal downdraft wind velocities in the Tower up to 50 mph, but when "convergence" occurs and the pressure in the tower achieves "Steady State" the design pushes the wind from the tower and compresses it into wind tunnels easily exceeding speeds of 100 mph in the tunnels.

A significant portion of the electricity produced by the STTR will be consumed by our onsite tenant/s (in some cases all). KiNRG also has options to sell whatever excess power is produced to specific entities offsite and is in discussion with these parties that have expressed interest. Power from the STTR can also be transmitted to a nearby power grid. The California Energy Commission has already PreCertified the electricity from a proposed STTR to be eligible to meet the California Renewables Portfolio Standard as a "Solar Thermal Electric" product.

When the DET is properly located in a suitable hot/dry location, the STTR solution will create zero carbon emission energy at a cost comparable, if not less, than traditional fossil fuel powered facilities and traditional solar and wind. The tower generates alternating current (AC) and can concurrently easily generate direct current (DC) with which can be transmitted up to 2,500 miles, widening the market opportunities for these towers outside of the required meteorological siting conditions.

**Global Energy Generation Calculator**

Many countries around the globe have initiated programs to significantly cut greenhouse gas emissions by limiting and eventually eliminating the use of fossil fuels and replacing them in an orderly fashion with renewable sources of energy. The KiNRG STTR's will be a participant in this evolutionary change in electrical energy production. Additionally, support and development of the Data Center market is virtually limitless.

KiNRG has developed a unique software platform for evaluating and rating specific geographic sites around the globe, "The Energy Calculator" (EC) that will sustain and provide a suitable environment for a STTR. The EC takes existing statistical weather data accumulated from within a radius of 100 miles from an existing airport (hourly temperatures, relative humidity, wind speeds etc.) and translates to elevations from ground level to 4000 feet. This data along with geographic intelligence and data available from international archived satellite weather data is entered into our system. The propriety algorithms then determine the exact dimensions of the proposed energy tower, along the performance output for that location. KiNRG's "Energy Calculator" has enabled the Company to design a smaller modular version of the full tower that can support a 24/7/365 base load capacities to power AI data centers.

**Business Model** 

The business model of our Company is to create an Energy Compound of Towers and to co-locate high consumption energy consumers such as AI data centers, green hydrogen production facilities and/or green steel in US to be developed individually with a common water supply and electrical grid access. Energy Compounds could actually be developed simultaneously in North America, North Africa (to serve the European grid by piping direct current across the Mediterranean), India and the Middle East. The world market can support all the materials needed and the market for carbon free energy is strong. The cost per kilowatt is similar to that of a typical coal or gas-fired facility. KiNRG has positioned itself to take advantage of this solution and bring the first project to market, thereby setting the stage for a global "game changing" opportunity. It is expected that utilizing the remaining energy to manufacture green hydrogen may further contribute to the positive environmental aspects of the project.

***Project Partnering***

KiNRG's business plan involves potential "partnering" with various entities such as utilities, sovereign nations and independent power producers, to provide the ability to bring this solution to the market as rapidly as possible.

Each STTR is its own independent project. KiNRG's involvement in each project is to facilitate the Tower's development with its expertise, intellectual property and project management team. KiNRG will receive development fees, licensing fees, and royalties on power sales from each project and/or ownership interests.

***Coordinated World Class Expertise***

KiNRG has evaluated potential sites for a possible first Tower here in the United States and received key patents to protect its techniques to extract the energy from the STTR. Some of the best consultants in the world have been and continue to support the KiNRG's efforts to bring this first STTR to market.

**Customers**

Energy produced by the STTR could provide low cost electricity to the power grid. KiNRG plans to ultimately build and operate STTR's with co-located Eco-Energy Industrial Parks housing carbon free energy consumers and sell the electricity either through contracts with utilities, which is the traditional method for independent power plants, or directly into the open market or electricity commodities market like a merchant plant similar to many natural gas fired power plants. The Company may also sell the power plants themselves to large customers or utilities and/or operate such plants for customers or utilities.

**Markets**

KiNRG is investigating the feasibility of locating a STTR in California. California has three major regulated investor-owned utilities and many municipal utilities, all of which are required by state law to have renewable sources of generation in their resource portfolios, whether generated or purchased. Arizona utilities have similar requirements. Due to federal regulations requiring that transmission owners provide service on the same terms to all generators requesting service, known as "open access", independent power producers (which KiNRG would be under its business model), are able to develop wind energy projects in areas where such resources are most prevalent and sell power to anyone interconnected with the transmission grid in California. California's transmission grid is operated by a regional transmission organization ("RTO"), the California Independent System Operator ("CAISO"). Other states belong to other RTOs. The California Energy Commission has designated the KiNRG STTR as a "Solar Thermal Facility".

**Competition**

The STTR project requires specific site and appropriate weather conditions. Given these constraints and the increasing focus on renewable energy to offset the environmental problems caused by fossil fuels, the renewable energy industry is highly competitive.

In the markets where KiNRG plans to conduct its business, it will compete with many energy producers including electric utilities and large independent power producers. There is also competition from fossil fuel sources such as natural gas and coal, and other renewable energy sources such as solar, traditional wind, hydro and geothermal. The competition depends on the resources available within the specific markets.

Although the cost to produce clean, reliable, renewable energy is becoming more competitive with traditional fossil fuel sources, it generally remains more expensive to produce, and the reliability of its supply is less consistent than traditional fossil fuel. Deregulation and consumer preference are becoming important factors in increasing the development of alternative energy projects.

KiNRG believes that governments and consumers recognize the importance of renewable energy resources in the energy mix, and are facilitating the implementation of wind and other renewable technologies through renewable portfolio standards and revenue and tax incentives.

Arizona and California have climates that support DET's and are primarily served by large utilities, such as Southern California Edison Company, Pacific Gas & Electric Company, San Diego Gas & Electric Company, Arizona Public Service Company ("Arizona Public Service") and UNS Energy Corporation. All of these companies have non-regulated subsidiaries or sister companies that develop generating facilities. In addition, utilities from other states and countries have established large wind energy generating companies, such as Florida Power & Light Company, enXco, Inc. and PPM Energy, Inc. (now part of a large Spanish renewable company, Iberdrola Renovables, S.A.).

According to the Electric Power Research Institute traditional energy costs have increased while solar and wind energy costs have declined. The advances in technology, larger-scale and more efficient manufacturing processes, and increased experience in wind turbine and solar operations has contributed substantially to this trend. This cost decline is paralleled with a several hundred fold increase in installed wind energy capacity. As a result, maintenance costs have fallen significantly.

**Environmental**

Various parties in the United States and other nations are pursuing clean energy solutions that use efficient and cost- effective renewable resources to serve society while avoiding the adverse effects associated with fossil and nuclear fuels, and also the obvious limitations of solar collectors that work only when the sun shines or wind turbines that work only when the wind blows.

The STTR has the capability of being operated with virtually no carbon footprint, fuel consumption, or waste production. The technology has the potential to generate clean, cost effective and efficient electrical power without the damaging effects caused by using fossil or nuclear fuels, and other conventional power sources. KiNRG also believes that increasing emphasis on green technologies and governmental incentives in the energy industry should have a positive long-term effect on KiNRG's planned business.

Numerous federal and state environmental laws can affect the development of renewable energy, such as the California Environmental Quality Act. These laws require that certain studies be conducted to ensure that there are no significant adverse impacts on wildlife, humans and the environment generally. The significant impacts of wind energy projects are on visibility, noise, birds, wildlife habitat and soil erosion. Changes in environmental laws can pose significant expenses on renewable energy development.

International treaties and protocols, have significantly impacted the development and implementation of renewable energy technologies. Certain countries and regions also have established emission trading programs. Under emission trading programs, utilities and factories are permitted to produce a certain level of emissions. If such an entity produces fewer emissions than its allotment, the entity may sell its excess allotment to parties exceeding their emissions allotments. To date, these mechanisms are at an early stage of development within the United States. Credit trading provides the potential for creating additional income for renewable energy producers, rationalizing of electricity prices for utilities and reducing the overall retail price for green power.

The Company believes that increasing emphasis on green technologies and governmental incentives in the renewable energy industry should have a positive long-term effect on KiNRG's planned business.

**Licensing and Regulation**

In the United States, many state governments have amended their utility regulations and significantly changed certain competition and marketing rules with respect to generation, transmission and distribution of electric energy. Among other things, deregulation allows consumers to purchase electricity from a source of their choice, and requires utilities to purchase electricity from independent power producers and to offer transmission to independent power producers at reasonable prices.

In Arizona, access to the electricity market has been established through Arizona's Retail Electric Competition Rules, which, in the Company's opinion, provide a favorable environment for renewable energy generators. Electricity producers are subject to the Federal Public Utilities Regulatory Policies Act ("PURPA") and state regulations. In addition, power producers must also meet standards set by the Arizona Corporations Commission (the "ACC").

**Employees**

As of July 1, 2025, the Company had a total of three full time employees. The Company has agreed to and will add additional staff in the areas of engineering, marketing and administration in the future. The Company relies on a number of expert consultants that have been advising the Company during the previous years.

**The Revocation of the Registration of our Securities**

On September 16, 2019, we were named as a respondent in an Order Instituting Administrative Proceedings and Notice of Hearing brought by the SEC pursuant to Section 12(j) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), File No. 3-19456 (the "Hearing"). The purpose of the Hearing was to determine whether it was necessary and appropriate for the protection of investors to suspend for a period not exceeding twelve months or revoke the registration, of each class of securities of the Company registered pursuant to Section 12 of the Exchange Act. The Hearing was scheduled because the Company failed to comply with the reporting requirements of Regulation 13(a) of the Exchange Act which required us to file with the SEC, in part, annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, and to comply with all other obligations of the Exchange Act applicable to issuers filing registration statements pursuant to Section 12(g) of the Exchange Act. On October 7, 2019, we signed an order that provided that the registration of our common stock and any other class of its securities registered pursuant to Section 12 of the Exchange Act will be revoked, subject to approval of the SEC (the "Proposed Order"). The Proposed Order became effective as of October 8, 2019.

**Corporate History and Structure**

On December 29, 2010, the Company completed a reverse merger (the "Merger") with Solar Wind Energy, Inc., a corporation formed under the laws of the State of Delaware on July 26, 2010 ("Solar Wind - Subsidiary"). In connection with the Merger, the Company issued to the stockholders of Solar Wind - Subsidiary in exchange for their Solar Wind - Subsidiary Common Stock, the right to receive an aggregate of 300,000,000 shares of the Company's Common Stock.

The Company was incorporated under the laws of the State of Idaho on January 22, 1962, as Superior Mines Company. In 1964, the Company's name was changed to Superior Silver Mines, Inc. On December 27, 2010, the Company reincorporated as a Nevada corporation. Prior to the Merger, the Company had been dormant for a number of years and had no known mineral reserves. On January 21, 2011, the Company changed its name from Superior Silver Mines, Inc. to Clean Wind Energy Tower, Inc. and on March 11, 2013, changed its name to Solar Wind Energy Tower Inc. along with its wholly-owned subsidiary, a corporation formed under the laws of the State of Delaware, which changed its name from Clean Wind Energy, Inc. to Solar Wind Energy, Inc., On December 28, 2020 the Company changed its name from Solar Wind Energy Tower, Inc. to KiNRG, Inc.

***Item 1A. Risk Factors***

*Investing in our common stock involves a high degree of risk. You should carefully consider the following risk factors and all other information contained in this registration statement before purchasing our common stock. If any of the following risks actually occur, we may be unable to conduct our business as currently planned and our financial condition and results of operations could be seriously harmed. In addition, the trading price of our common stock could decline due to the occurrence of any of these risks, and you may lose all or part of your investment.*

 **Risks Related to Our Business and the Industry in Which We Compete**

***We are an early development stage company. We have not yet commenced with the construction of our Downdraft Towers or the production of electricity.***

The Company has a limited operating history and has primarily engaged in operations relating to the development of its business plan. As a development stage entity, the Company is subject to many of the risks common to such enterprises, including the ability of the Company to implement its business plan, market acceptance of its proposed business, under-capitalization, cash shortages, limitations with respect to personnel, financing and other resources, and uncertainty of the Company's ability to generate revenues. There can be no assurance that the Company's activities will be successful or result in any revenues or profit for the Company, and the likelihood of the Company's success must be considered in light of the stage in its development. To date, the Company has generated no revenue and has generated losses.

The Company believes it has engaged professionals and consultants experienced in the type of business contemplated by the Company; however, there can be no assurance that the predictions, opinions, analyses, or conclusions of such professionals will prove to be accurate. In addition, no assurance can be given that the Company will be able to consummate its business strategy and plans or those financial or other limitations may force the Company to modify, alter, significantly delay, or significantly impede the implementation of such plans or the Company's ability to continue operations. If the Company is unable to successfully implement its business strategy and plans, investors may lose their entire investment in the Company.

Potential investors should also be aware of the difficulties normally encountered by new renewable energy companies. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the inception of the enterprise that we plan to undertake. These potential problems include, but are not limited to, raising capital to implement each of the STTR's, unanticipated problems relating to construction, operation and distribution, and additional costs and expenses that may exceed current estimates.

***Future financings will involve a dilution of the interests of the stockholders of the Company upon the issuance of additional shares of Common Stock or other securities.***

We will need to engage in additional financings in the future. There can be no assurances that such financings will ever be completed, but any such financings will involve a dilution of the interests of our stockholders upon the issuance of additional shares of Common Stock or other securities. Attaining such additional financing may not be possible, or if additional capital may be otherwise available, the terms on which such capital may be available may not be commercially feasible or advantageous to existing shareholders. We expect to issue shares of our Common Stock and/or other securities in exchange for additional financing.

***We anticipate significant future capital needs and the availability of future capital is uncertain.***

The Company has experienced negative cash flows from operations since its inception. The Company will be required to spend substantial funds to continue research and development. It is estimated that the cost of permitting and constructing STTR's will be in excess of $2 billion and the cost of a green hydrogen plant will be in excess of $1.2 billion. In addition, we will need to raise funds for working capital purposes. The Company will need to raise additional capital. The Company's capital requirements will depend on many factors, primarily relating to the problems, delays, expenses and complications frequently encountered by development stage companies; construction and permitting delays and related issues; the progress of the Company's research and development programs; the costs and timing of seeking regulatory approvals of the Company's products under development; the Company's ability to obtain such regulatory approvals; costs in filing, prosecuting, defending, and enforcing any patent claims and other intellectual property rights; the extent and terms of any collaborative research, manufacturing, marketing, or other arrangements; and changes in economic, regulatory, or competitive conditions or the Company's planned business.

To satisfy its capital requirements, the Company may seek to raise funds in the public or private capital markets. The Company may seek additional funding through corporate collaborations and other financing vehicles. There can be no assurance that any such funding will be available to the Company, or if available, that it will be available on acceptable terms. If adequate funds are not available, the Company may be required to curtail significantly one or more of its research or development programs or it may be required to obtain funds through arrangements with future collaborative partners or others that may require the Company to relinquish rights to some or all of its technologies or products under development. If the Company is successful in obtaining additional financing, the terms of the financing may have the effect of diluting or adversely affecting the holdings or the rights of the holders of Common Stock.

***We have a history of losses.***

We expect to incur non-capitalized development costs and general and administrative expenses prior to the completion of construction and commencement of operation of our proposed projects. We cannot predict if we will ever achieve profitability and, if we do, we may not be able to sustain or increase our profitability. If we cannot achieve or maintain profitability, we may not be able to continue to absorb the resulting financial losses. If we continue to suffer financial losses, our business may be jeopardized and our shareholders may lose all of their investment in our shares.

***The Company's strategies for development of the business might not be successful.***

The Company is currently evaluating potential development strategies for the further development of STTR technology and implementation of the construction of STTR's. It may take several years, if ever, for the Company to achieve cumulative positive cash flow. The Company could experience significant difficulties in executing its business plan, including: inability to successfully implement the Company's business plan; changes in market conditions; inability to obtain necessary financing; delays in completion of the Company's projects or their underlying technologies; inaccurate cost estimates; changes in government or political reform; or the Company may not benefit from the proposed projects as the Company expected. The Company's inability to develop and market the Company's STTR's successfully and to generate positive cash flows from these operations in a timely manner would have a material adverse effect on the Company's ability to meet the Company's working capital requirements.

***We expect to rely upon strategic relationships in order to execute our business plan and the Company may not be able to consummate the strategic relationships necessary to execute its business plan.***

The Company plans to enter into and rely on strategic relationships with other parties, in particular to acquire rights necessary to develop and build proposed STTR's and to develop and build such projects. These strategic relationships could include licensing agreements, partnerships, joint ventures, or even business combinations. The Company believes that these relationships will be particularly important to the Company's future growth and success due to the size and resources of the Company and the resources necessary to complete the Company's proposed projects. The Company may, however, not be able to successfully identify potential strategic relationships.

Even if the Company does identify one or more potentially beneficial strategic relationships, it may not be able to consummate these relationships on favorable terms or at all, obtain the benefits it anticipates from such relationships or maintain such relationships. In addition, the dynamics of the Company's relationships with possible strategic partners may require the Company to incur expenses or undertake activities it would not otherwise be inclined to undertake in order to fulfill the Company's obligations to these partners or maintain the Company's relationships.

To the extent the Company consummates strategic relationships; it may become reliant on the performance of independent third parties under such relationships. Moreover, certain potentially critical strategic relationships are only in the early stages of discussion and have not been officially agreed to and formalized. If strategic relationships are not identified, established or maintained, or are established or maintained on terms that become unfavorable, the Company's business prospects may be limited, which could have a negative impact on the Company's ability to execute the Company's business plan, diminish the Company's ability to conduct the Company's operations and/or materially and adversely affect the Company's business and financial results.

***Project development or construction activities may not be successful and proposed projects may not receive required permits or construction may not proceed as planned.***

The development and construction of our proposed projects will involve numerous risks. We may be required to spend significant sums for preliminary engineering, permitting, legal, and other expenses before we can determine whether a project is feasible, economically attractive or capable of being built. Success in developing a particular project is contingent upon, among other things: (i) negotiation of satisfactory engineering, procurement and construction agreements; (ii) receipt of required governmental permits and approvals, including the right to interconnect to the electric grid on economically acceptable terms; (iii) payment of interconnection and other deposits (some of which may be non-refundable); (iv) obtaining construction financing; and (v) timely implementation and satisfactory completion of construction.

Successful completion of a particular project may be adversely affected by numerous factors, including: (i) delays in obtaining required governmental permits and approvals with acceptable conditions; (ii) uncertainties relating to land costs for projects ; (iii) unforeseen engineering problems; (iv) construction delays and contractor performance shortfalls; (v) work stoppages; (vi) cost over-runs; (vii) equipment and materials supply; (viii) adverse weather conditions; and (ix) environmental and geological conditions.

***The estimates and projections contained herein may not be realized.***

Any estimates or projections have been prepared on the basis of assumptions and hypotheses, which the Company believes to be reasonable. However, no assurance can be given that the potential benefits described herein will prove to be available. Such assumptions are highly speculative and, while based on management's best estimates of projected sales levels, operational costs, consumer preferences, and the Company's general economic and competitive conditions in the industry, there can be no assurance that the Company will operate profitably or remain solvent. To date, the Company has not operated profitably and has a history of losses. If the Company's plans prove unsuccessful, investors could lose all or part of their investment. There can be no assurance that the Company will be able to generate any revenue or profits.

***Our business is subject to significant government regulation and, as a result, changes to such regulations may adversely affect our business.***

Although independent and small power producers may generate electricity and engage in wholesale sales of energy without being subject to the full panoply of state and/or provincial and federal regulation to the same extent as a public utility company, our planned operations will nonetheless be subject to changes in government regulatory requirements, such as regulations related to the environment, zoning and permitting, financial incentives, taxation, competition, pricing, and FERC and state PUC regulations on competition. The operation of our proposed projects will be subject to regulation by various U.S. government agencies at the federal, state and municipal level.

There is always the risk of change in government policies and laws, including but not limited to laws and regulations relating to income, capital, sales, corporate or local taxes, and the removal of tax incentives. Changes in these regulations could have a negative impact on our potential profitability. Laws and tax policies may change and such changes may be favorable or unfavorable to the Company, which may result in the cancellation of proposed projects or reduce anticipated revenues and cash flow.

***We may be unable to acquire or lease land and/or obtain the approvals, licenses and permits necessary to build and operate our proposed projects in a timely and cost effective manner, and regulatory agencies, local communities or labor unions may delay, prevent or increase the cost of construction and operation of our proposed projects.***

In order to construct and operate our proposed projects, we need to acquire or lease land and obtain all necessary local, county, state and federal approvals, licenses and permits. We may be unable to acquire the land or lease interests needed, may not receive or retain the requisite approvals, permits and licenses or may encounter other problems which could delay or prevent us from successfully constructing and operating proposed projects.

Proposed projects may be located on or require access through public lands administered by federal and state agencies pursuant to competitive public leasing and right-of-way procedures and processes. The authorization for the use, construction and operation of our proposed projects and associated transmission facilities on federal, state and private lands will also require the assessment and evaluation of mineral rights, private rights-of-way and other easements; environmental, agricultural, cultural, recreational and aesthetic impacts; and the likely mitigation of adverse impacts to these and other resources and uses. The inability to obtain the required permits and, potentially, excessive delay in obtaining such permits due, for example, to litigation, could prevent us from successfully constructing and operating our proposed projects. Moreover, project approvals subject to project modifications and conditions, including mitigation requirements and costs, could affect the financial success of our proposed projects.

***Our ability to manage our growth successfully is crucial to our future.***

We are subject to a variety of risks associated with a growing business. Our ability to operate successfully in the future depends upon our ability to finance, develop, and construct future renewable energy projects, implement and improve the administration of financial and operating systems and controls, expand our technical capabilities and manage our relationships with landowners and contractors. Our failure to manage growth effectively could have a material adverse effect on our business or results of operations.

***Notwithstanding the Recovery Act and other regulatory incentives, we may not be able to finance the development or the construction costs of building our planned projects.***

We do not have sufficient funds from the cash flow of our operations to fully finance the development or the construction costs of building our proposed projects. Additional funds will be required to complete the development and construction of our proposed projects, to find and carry out the development of properties, and to pay the general and administrative costs of operating our business. Additional financing may not be available on acceptable terms, if at all. If we are unable to raise additional funds when needed, we may be required to delay development and construction of our proposed projects, reduce the scope of our proposed projects, and/or eliminate or sell some or all of our development projects, if any.

***We may not be able to obtain access to the transmission lines necessary to deliver the power we plan to produce and sell.***

We will depend on access to transmission facilities so that we may deliver power to purchasers. If existing transmission facilities do not have available transmission capacity, we would be required to pay for the upgrade of existing transmission facilities or to construct new ones. There can be no assurance that we will be able to secure access to transmission facilities at a reasonable cost, or at all. As a result, expected profitability on a proposed project may be lower than anticipated or, if we have no access to electricity transmission facilities, we may not be able to fulfill our obligations to deliver power or to construct the project or we may be required to pay liquidated damages.

***Changes in interest rates and debt covenants and increases in turbine and generator prices and construction costs may result in our proposed projects not being economically feasible.***

Increases in interest rates and changes in debt covenants may reduce the amounts that we can borrow, reduce the cash flow, if any, generated by our proposed projects, and increase the equity required to complete the construction of our proposed projects. The cost of wind turbines, generators and construction costs have increased significantly over the last four years. Further increases may increase the cost of our proposed projects to the point that such projects are not feasible given the prices utilities are willing to pay. There can be no assurance that we will be able to negotiate power purchase agreements with sufficiently profitable electricity prices in the future.

***We may not be able to secure power purchase agreements.***

We may not be able to secure power purchase agreements for our proposed projects. In the event that we do secure power purchase agreements, if we fail to construct our proposed projects in a timely manner, we may be in breach of our power purchase agreements and such agreements may be terminated.

***The operation of our proposed projects may be subject to equipment failure.***

After the construction of our proposed projects, the electricity produced may be lower than anticipated because of equipment malfunction. Unscheduled maintenance can result in lower electricity production for several months or possibly longer depending on the nature of the outage, and correspondingly, in lower revenues.

***Changes in weather patterns may affect our ability to operate our proposed projects.***

Meteorological data we collect during the development phase of a proposed project may differ from actual results achieved after the project is erected. While long-term precipitation patterns have not varied significantly, short-term patterns, either on a seasonal or on a year-to-year basis may vary substantially. These variations may result in lower revenues and higher operating losses.

***Environmental damage on our properties may cause us to incur significant financial expenses.***

Environmental damage may result from the development and operation of our proposed projects. The construction of our proposed initial STTR involves, among other things, land excavation and the installation of concrete foundations. Equipment can be a source of environmental concern, including noise pollution, damage to the soil as a result of oil spillage, and peril to certain migratory birds and animals that live, feed on, fly over, or cross the property. In addition, environmental regulators may impose restrictions on our operations, which would limit our ability to obtain the appropriate zoning or conditional use permits for our project. We may also be assessed significant financial penalties for any environmental damage caused on properties that are leased, and we may be unable to sell properties that are owned. Financial losses and liabilities that may result from environmental damage could affect our ability to continue to do business.

***Larger developers have greater resources and expertise in developing and constructing renewable energy projects.***

We face significant competition from large power project developers, including electric utilities and large independent power producers that have greater project development, construction, financial, human resources, marketing and management capabilities than the Company. They have a track record of completing projects and may be able to acquire funding more easily to develop and construct projects. They have also established relationships with energy utilities, transmission companies, turbine suppliers, and plant contractors that may make our access to such parties more difficult.

***Renewable energy must compete with traditional fossil fuel sources.***

In addition to competition from other industry participants, we face competition from fossil fuel sources such as natural gas and coal, and other renewable energy sources such as solar, traditional wind, hydro and geothermal. The competition depends on the resources available within the specific markets. Although the cost to produce clean, reliable, renewable energy is becoming more competitive with traditional fossil fuel sources, it generally remains more expensive to produce, and the reliability of its supply is less consistent than traditional fossil fuel. However, deregulation, legislative mandates for renewable energy, and consumer preference for environmentally more benign energy sources are becoming important factors in increasing the development of alternative energy projects.

***The wind and solar energy industry in California is highly competitive since wind and solar play an integral role in the electricity portfolio in California.***

KiNRG is investigating the feasibility of locating a STTR in California. Since wind and solar play an integral role in the electricity portfolio in California and wind energy require a significant amount of land resource, the wind and solar energy industry in California is highly competitive. Wind and solar developers compete for leased and owned land with favorable wind characteristics, limited supply of turbines and contractors, and for purchasers and available transmission capacity. There is no guarantee that we will be able to acquire the significant land resources needed to develop projects in California.

***Our ability to hire and retain qualified personnel and contractors will be an important factor in the success of our business. Our failure to hire and retain qualified personnel may result in our inability to manage and implement our plans for expansion and growth.***

Competition for qualified personnel in the renewable energy industry is significant. To manage growth effectively, we must continue to implement and improve our management systems and to recruit and train new personnel. We may not be able to continue to attract and retain the qualified personnel necessary to carry on our business. If we are unable to retain or hire additional qualified personnel as required, we may not be able to adequately manage and implement our plans for expansion and growth.

***The market in which we operate is rapidly evolving and we may not be able to maintain our profitability.***

As a result of the emerging nature of the markets in which we plan to compete and the rapidly evolving nature of our industry, it is particularly difficult for us to forecast our revenues or earnings accurately. Our current and future expense levels are based largely on our investment plans and estimates of future revenues and are, to a large extent, fixed. We may not be able to adjust spending in a timely manner to compensate for any unexpected revenue shortfall. Accordingly, any significant shortfall in revenues relative to our planned expenditures would have an immediate adverse effect on our business, results of operations and financial condition.

***We depend on key personnel, the loss of which could have a material adverse effect on us.***

Our performance depends substantially on the continued services and on the performance of our senior management and other key personnel. Our ability to retain and motivate these and other officers and employees is fundamental to our performance. The unexpected loss of services of one or more of these individuals could have a material adverse effect on us. We are not protected by a material amount of key-person or similar life insurance covering our executive officers and other directors. We have entered into employment agreements with our executive officers, but the non-compete period with respect to certain executive officers could, in some circumstances in the event of their termination of employment with the Company, end prior to the employment term set forth in their employment agreements.

***Certain legal proceedings and regulatory matters could adversely impact our results of operations.***

We may be subject from time to time to various claims involving alleged breach of contract claims, intellectual property and other related claims, and other litigations. Certain of these lawsuits and claims, if decided adversely to us or settled by us, could result in material liability to the Company or have a negative impact on the Company's reputation or relations with its employees, customers, licensees or other third parties. In addition, regardless of the outcome of any litigation or regulatory proceedings, such proceedings could result in substantial costs and may require that the Company devotes substantial time and resources to defend itself. Further, changes in governmental regulations in the U.S. could have an adverse impact on our results of operations.

***The Company's insurance coverage may not be adequate.***

If the Company was held liable for amounts exceeding the limits of its insurance coverage in place at any given time or for claims outside the scope of that coverage, its business, results of operations and financial conditions could be materially and adversely affected.

***Our business is subject to extensive governmental regulation that could reduce our profitability, limit our growth, or increase competition.***

Our planned businesses are subject to extensive federal, state and foreign governmental regulation and supervision, which could reduce our potential profitability or limit our potential growth by increasing the costs of regulatory compliance, limiting or restricting the products or services we plan to sell or the methods by which we plan to sell our products and services, or subjecting our businesses to the possibility of regulatory actions or proceedings.

In all jurisdictions the applicable laws and regulations are subject to amendment or interpretation by regulatory authorities. Generally, such authorities are vested with relatively broad discretion to grant, renew and revoke licenses and approvals and to implement regulations. Accordingly, we may be precluded or temporarily suspended from carrying on some or all of our planned activities or otherwise fined or penalized in a given jurisdiction. No assurances can be given that our business will be allowed to be, or continue to be, conducted in any given jurisdiction as we plan.

Competition resulting from these developments could cause the supply of, and demand for, our planned products and services to change, which could adversely affect our results of operations and financial condition.

***Our planned operations will expose us to various international risks that could adversely affect our business.***

We are seeking to reach agreements for the provision of key aspects of our business with foreign operators. Accordingly, we may become subject to legal, economic and market risks associated with operating in foreign countries, including:

● the general economic and political conditions existing in those countries;

● devaluations and fluctuations in currency exchange rates;

● imposition of limitations on conversion of foreign currencies or remittance of dividends and other payments by foreign subsidiaries;

● imposition or increase of withholding and other taxes on remittances and other payments by subsidiaries;

● hyperinflation in certain foreign countries;

● imposition or increase of investment and other restrictions by foreign governments;

● longer payment cycles;

● greater difficulties in accounts receivable collection; and

● the requirement of complying with a wide variety of foreign laws.

***Our ability to conduct business in foreign countries may be affected by legal, regulatory, political and economic risks.***

Our ability to conduct business in foreign countries is subject to risks associated with international operations. These include:

● the burdens of complying with a variety of foreign laws and regulations;

● unexpected changes in regulatory requirements; and

● new tariffs or other barriers in some international markets.

We are also subject to general political and economic risks in connection with our international operations, including:

● political instability and terrorist attacks;

● changes in diplomatic and trade relationships; and

● general economic fluctuations in specific countries or markets.

We cannot predict whether quotas, duties, taxes, or other similar restrictions will be imposed by the U.S. or foreign countries upon our business in the future, or what effect any of these actions would have on our business, financial condition or results of operations. Changes in regulatory, geopolitical, social or economic policies and other factors may have a material adverse effect on our business in the future or may require us to significantly modify our current business practices.

***The occurrence of natural or man-made disasters could adversely affect our financial condition and results of operations.***

We are exposed to various risks arising out of natural disasters, including earthquakes, hurricanes, fires, floods and tornadoes, and pandemic health events such as COVID, as well as man-made disasters, including acts of terrorism and military actions. The continued threat of terrorism and ongoing military actions may cause significant volatility in global financial markets, and a natural or man-made disaster could trigger an economic downturn in the areas directly or indirectly affected by the disaster. These consequences could, among other things, result in a decline in business and increased claims from those areas. Disasters also could disrupt public and private infrastructure, including communications and financial services, which could disrupt our normal business operations.

Our inability to successfully recover should we experience a disaster or other business continuity problem could cause material financial loss, loss of human capital, regulatory actions, reputational harm or legal liability.

Should we experience a local or regional disaster or other business continuity problem, such as an earthquake, hurricane, terrorist attack, pandemic, security breach, power loss, telecommunications failure or other natural or man-made disaster, our continued success will depend, in part, on the availability of our personnel, our office facilities, and the proper functioning of our computer, telecommunication and other related systems and operations.

Our operations are dependent upon our ability to protect our technology infrastructure against damage from business continuity events that could have a significant disruptive effect on our operations. We could potentially lose operation of our projects or experience material adverse interruptions to our operations or delivery of services to our clients in a disaster recovery scenario.

We plan to regularly assess and take steps to improve upon our existing business continuity plans and key management succession. However, a disaster on a significant scale or affecting certain of our key operating areas within or across regions, or our inability to successfully recover should we experience a disaster or other business continuity problem, could materially interrupt our business operations and cause material financial loss, loss of human capital, regulatory actions, reputational harm, damaged client relationships or legal liability.

***Assertions by a third party that the Company infringes its intellectual property could result in costly and time-consuming litigation, expensive licenses or the inability to operate as planned.***

The energy and technology industries are characterized by the existence of a large number of patents, copyrights, trademarks and trade secrets and by frequent litigation based on allegations of infringement or other violations of intellectual property rights. There is a possibility of intellectual property rights claims against the Company. The Company's technologies may not be able to withstand third-party claims or rights restricting their use. Companies, organizations or individuals, including the Company's competitors, may hold or obtain patents or other proprietary rights that would prevent, limit or interfere with the Company's ability to provide the Company's services or develop new products or services, which could make it more difficult for the Company to operate the Company's business. Any litigation or claims, whether or not valid, could be time-consuming, expensive to litigate or settle and could divert the Company's managements' attention and financial resources. If the Company is determined to have infringed upon a third party's intellectual property rights, the Company may be required to pay substantial damages, stop using technology found to be in violation of a third party's rights or seek to obtain a license from the holder of the infringed intellectual property right, which license may not be available on reasonable terms, or at all, and may significantly increase the Company's operating expenses or may require the Company to restrict the Company's business activities in one or more respects.

The Company may also be required to develop alternative non-infringing technology that could require significant effort and expense or may not be feasible. In the event of a successful claim of infringement against the Company and the Company's failure or inability to obtain a license to the infringed technology, the Company's business and results of operations could be harmed.

***The Company's business will be adversely affected if the Company is unable to protect its intellectual property rights from unauthorized use or infringement by third-parties.***

The Company intends to rely on a combination of trademark, patent, trade secret and copyright law, license agreements and contractual restrictions, including confidentiality agreements, invention assignment agreements and non-disclosure agreements with employees, contractors and suppliers, to protect the Company's proprietary rights, all of which provide only limited protection. The Company believes its intellectual property rights are valuable, and any inability to protect them could reduce the value of the Company's products, services and brand. Various events outside of the Company's control pose a threat to the Company's intellectual property rights as well as to the Company's products and services. The efforts the Company has taken to protect its proprietary rights may not be sufficient or effective, may not be enforceable or may be capable of being effectively circumvented.

Any significant impairment of the Company's intellectual property rights could harm the Company's business or the Company's ability to compete. Also, protecting the Company's intellectual property rights is costly and time consuming. The Company also seeks to maintain certain intellectual property as trade secrets. The secrecy could be compromised by outside parties, or by the Company's employees, which would cause the Company to lose the competitive advantage resulting from these trade secrets.

**Risks Related to Ownership of our Common Stock**

***We are a "smaller reporting company" and we have elected to comply with certain reduced reporting and disclosure requirements which could make its common stock less attractive to investors.***

We are a "smaller reporting company," as defined in the Regulation S-K of the Securities Act of 1933, as amended, which allows us to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not smaller reporting companies, including (1) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, and (2) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. In addition, as an emerging growth company, we are only required to provide two years of audited financial statements in this document. As a result of these reduced reporting and disclosure requirements our financial statements may not be comparable to SEC registrants not classified as emerging growth companies.

We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

Our independent registered public accounting firm is not be required to formally attest to the effectiveness of our internal control over financial reporting until we are no longer a "smaller reporting company". We cannot assure you that there will not be material weaknesses or significant deficiencies in our internal controls in the future.

Investors may find our common stock less attractive as a result of our election to utilize these exemptions, which could result in a less active trading market for our common stock and/or the market price of our common stock may be more volatile.

***A sale or perceived sale of a substantial number of shares of our common stock may cause the price of our common stock to decline.***

All of our executive officers and directors and certain of our stockholders and warrant holders have agreed not to sell shares of our common stock for a period of 180 days following this offering, subject to extension under specified circumstances. See "Underwriting". Common stock subject to these lock-up agreements will become eligible for sale in the public market upon expiration of these lock-up agreements, subject to limitations imposed by Rule 144 under the Securities Act of 1933, as amended. If our stockholders sell substantial amounts of our common stock in the public market, the market price of our common stock could fall. Moreover, the perceived risk of this potential dilution could cause stockholders to attempt to sell their shares and investors to short our common stock. These sales also may make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate.

***Market and economic conditions may negatively impact our business, financial condition and share price.***

Concerns over medical epidemics, energy costs, geopolitical issues, the U.S. mortgage market and a deteriorating real estate market, unstable global credit markets and financial conditions, and volatile oil prices have led to periods of significant economic instability, diminished liquidity and credit availability, declines in consumer confidence and discretionary spending, diminished expectations for the global economy and expectations of slower global economic growth, increased unemployment rates, and increased credit defaults in recent years. Our general business strategy may be adversely affected by any such economic downturns (including the current downturn related to the current COVID-19 pandemic), volatile business environments and continued unstable or unpredictable economic and market conditions. If these conditions continue to deteriorate or do not improve, it may make any necessary debt or equity financing more difficult to complete, more costly, and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance, and share price and could require us to delay or abandon development or commercialization plans.

***If securities or industry analysts do not publish research or reports, or publish unfavorable research or reports about our business, our stock price and trading volume may decline.***

The trading market for our common stock will rely in part on the research and reports that industry or financial analysts publish about us, our business, our markets and our competitors. We do not control these analysts. If securities analysts do not cover our common stock after the closing of this offering, the lack of research coverage may adversely affect the market price of our common stock. Furthermore, if one or more of the analysts who do cover us downgrade our stock or if those analysts issue other unfavorable commentary about us or our business, our stock price would likely decline. If one or more of these analysts cease coverage of us or fails to regularly publish reports on us, we could lose visibility in the market and interest in our stock could decrease, which in turn could cause our stock price or trading volume to decline and may also impair our ability to expand our business with existing customers and attract new customers.

***Because certain of our stockholders control a significant number of shares of our common stock, they may have effective control over actions requiring stockholder approval.***

Our directors, executive officers and principal stockholders, and their respective affiliates, will beneficially own approximately 70% of our outstanding shares of common stock. As a result, these stockholders, acting together, would have the ability to control the outcome of matters submitted to our stockholders for approval, including the election of directors and any merger, consolidation or sale of all or substantially all of our assets. In addition, these stockholders, acting together, would have the ability to control the management and affairs of our company. Accordingly, this concentration of ownership might harm the market price of our common stock by:

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

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

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

***Our share price may be volatile, and you may lose all or part of your investment.***

The executive officers, directors, 5% or greater stockholders, and their respective affiliated entities will in the aggregate beneficially own approximately 70% of our outstanding common stock. As a result, these stockholders, acting together, have control over matters that require approval by our stockholders, including the election of directors and approval of significant corporate transactions. Corporate actions might be taken even if other stockholders oppose them. This concentration of ownership might also have the effect of delaying or preventing a corporate transaction that other stockholders may view as beneficial.

***We do not intend to pay dividends for the foreseeable future, which could reduce the attractiveness of our stock to some investors.***

We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable future. As a result, you may only receive a return on your investment in our common stock if the market price of our common stock increases. In addition, we may incur debt financing to further finance our operations, the governing documents of which may contain restrictions on our ability to pay dividends.

***Provisions in our articles of incorporation and bylaws and Nevada law may discourage, delay or prevent a change of control of our company and, therefore, may depress the trading price of our stock.***

Our articles of incorporation and bylaws contain provisions that may discourage, delay or prevent a change of control that our stockholders may consider favorable. These provisions:

● authorize the issuance of "blank check" preferred stock that our board of directors could issue to increase the number of outstanding shares to discourage a takeover attempt;

● prohibit stockholder action to elect or remove directors by majority written consent;

● provide that the board of directors is expressly authorized to make, alter or repeal our bylaws;

● prohibit our stockholders from calling a special meeting of stockholders; and

● establish advance notice requirements for nominations for elections to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings.

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***We may be subject to securities litigation, which is expensive and could divert management attention.***

In the past companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Litigation of this type could result in substantial costs and diversion of management's attention and resources, which could seriously hurt our business. Any adverse determination in litigation could also subject us to significant liabilities.

***If we fail to comply with the rules under the Sarbanes-Oxley Act of 2002 related to accounting controls and procedures in the future, or, if we discover additional material weaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be more difficult. Our management determined that our disclosure controls and procedures and internal controls were ineffective as of December 31, 2024 and 2023 and if they continue to be ineffective could result in material misstatements in our financial statements.***

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If we fail to comply with the rules under the Sarbanes-Oxley Act related to disclosure controls and procedures in the future, or, if we discover material weaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be more difficult. Section 404 of the Sarbanes-Oxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting. In connection with the audit of our consolidated financial statements for the years ended December 31, 2023 and 2022, our management concluded that the Company had material weaknesses in its internal controls because we did not have adequately designed internal controls to ensure the timely preparation and review of the accounting for certain complex, non-routine transactions by those with appropriate technical expertise, which was necessary to provide reasonable assurance that the Company's consolidated financial statements and related disclosures would be prepared in accordance with generally accepted accounting principles in the United States of America. In addition, we did not have adequately designed and documented financial close and management review controls to properly detect and prevent certain accounting errors and omitted disclosures in the financial statements and related footnotes. Upon completion of this offering, we intend to invest as soon as practicable in resources to create a larger finance function with additional personnel to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management's time and attention from revenue-generating activities to compliance activities. If additional material weaknesses or significant deficiencies are discovered or if we otherwise fail to achieve and maintain the adequacy of our internal control, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act. Moreover, effective internal controls are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our common stock could drop significantly.

***We may not qualify for OTC Market inclusion, and therefore you may be unable to sell your shares.***

 

We believe that, at some time following the effectiveness of this registration statement of which this prospectus forms a part our common stock will become eligible for quotation on the OTC Market. No assurances can be given, however, that this eligibility will be granted. OTC Market eligible securities include securities not listed on a registered national securities exchange in the United States and that are also required to file reports pursuant to Section 13 or 15(d) of the Securities Act of 1933, as amended (the "Securities Act"), and require that the company be current in its periodic securities reporting obligations.

Among other matters, in order for our common stock to become OTC Market eligible, a broker/dealer member of the Financial Industry Regulatory Authority ("FINRA"), must file a Form 211 with FINRA and commit to make a market in our securities once the Form 211 is approved by FINRA. As of the date of this offering memorandum, a Form 211 has [not] been filed with FINRA by any broker/dealer. If for any reason our common stock does not become eligible for quotation on the OTC Market or a public trading market does not develop, purchasers of shares of our common stock may have difficulty selling their shares should they desire to do so. If we are unable to satisfy the requirements for quotation on the OTC Market, any quotation of our common stock would be conducted in the "Pink Sheets" market. As a result, a purchaser of our common stock may find it more difficult to dispose of, or to obtain accurate quotations as to the price of their shares.

***Our common stock may be considered a "penny stock," and thereby be subject to additional sale and trading regulations that may make it more difficult to sell. Further, if our common stock is considered a "penny stock," the protection provided by the federal securities laws relating to forward looking statements would not apply to us.***

 

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

Although federal securities laws provide a safe harbor for forward-looking statements made by a public company that files reports under the federal securities laws, this safe harbor is not available to issuers of penny stocks. As a result, we may not have the benefit of this safe harbor protection in the event of any legal action based upon a claim that the material provided by us contained a material misstatement of fact or was misleading in any material respect because of our failure to include any statements necessary to make the statements not misleading. Such an action could hurt our financial condition.

**FINRA sales practice requirements may also limit your ability to buy and sell our common stock, which could depress the price of our shares.**

FINRA rules require broker-dealers to have reasonable grounds for believing that an investment is suitable for a customer before recommending that investment to the customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status and investment objectives, among other things. Under interpretations of these rules, FINRA believes that there is a high probability such speculative low-priced securities will not be suitable for at least some customers. Thus, FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our shares once publicly traded, have an adverse effect on the market for our shares, and thereby depress our share price.

***Item 2. Financial Information.***

 ****

**Background of the Company**

KiNRG, Inc. is a green energy company. Our core objective and focus is to become a leading provider of clean efficient green energy to the world communities at a reasonable cost without the destructive residuals of fossil fuel, while continuing to generate innovative technological solutions for today and tomorrow's electrical power needs. KiNRG has designed, engineered, developed and is preparing to construct large "Solar Thermal Tower Reactors" that use benevolent, non-toxic natural elements to generate electricity economically by integrating and synthesizing numerous proven as well as emerging technologies. In addition to constructing Solar Thermal Tower Reactors in the United States and abroad, the Company intends to establish partnerships at home and abroad to propagate these systems and meet increasing global demand for electricity. We have assembled a team of experienced business professionals, engineering, and scientific consultants with the proven ability to bring the idea to market. KiNRG has filed and been issued patents that the Company believes will further enhance this potentially revolutionary technology. KiNRG is based in Annapolis, MD.

**Results of Operations for the Year Ended December 31, 2024 Compared with the Year Ended December 31, 2023**

***Selling, General, and Administrative Expenses***

Selling, general, and administrative expenses ("SG&A") were $1,205,354 for the year ended December 31, 2024, an increase of $130,279 or 12.1%, compared to $1,075,075 during the year ended December 31, 2023. SG&A expenses consisted primarily of payroll and related costs, professional fees, consulting expenses, and director compensation.

***Impairment of Deposit***

 ****

During the year ended December 31, 2023, the Company determined that a long-term deposit on land in the amount of $200,000 was unlikely to be recovered, and recorded an impairment on this asset in the amount of $200,000. There was no comparable transaction in the current period.

***Interest Expense***

 ****

Interest expense was $42,082 during the year ended December 31, 2024, a decrease of $9,699 or 18.7%, compared to interest expense of $51,781 during the year ended December 31, 2023. Interest expenses consists of interest on the Company's note payable and related party loan payable.

***Net Loss From Continuing Operations***

 ****

For the reasons above, the Company had a net loss from continuing operations of $1,247,436 for the year ended December 31, 2024, compared to $1,326,856 for the year ended December 31, 2023.

***Net Loss Attributable to Non-controlling Interest8***

 ****

Net loss attributable to non-controlling interest was $20,089 during the year ended December 31, 2024, a decrease of $105,652 compared to $125,741 during the year ended December 31, 2023. During the prior period, the Company held an 82.77% interest in Arizona Green Power ("AGP").

***Net Loss from Discontinued Operations***

 ****

Net loss attributable to discontinued operations was $104,595during the year ended December 31, 2024, a decrease of $613,184 compared to $717,779 during the year ended December 31, 2023. Discontinued operations consist of the activities of AGP.

***Consolidated Net Loss***

 ****

For the reasons above, consolidated net loss was $1,331,942 during the year ended December 31, 2024, a decrease of $586,952 compared to $1,918,894 during the year ended December 31, 2023.

***Cash Flows from Operating Activities***

 ****

Cash flows used in operating activities were ($857,270) during the year ended December 31, 2024, a decrease of $298,206or 26% compared to ($1,155,476) during the prior period. The Company currently has no sales. Cash flows from operating activities consists of the net loss of ($1,331,853) reduced by increases in non-cash costs, primarily accrued payroll of $185,516, stock based compensation of $139,173, accounts payable of $18,780, and accrued liabilities – related party of $100,000.

***Cash Flows Provided by Financing Activities***

 ****

For the year ended December 31, 2024, cash provided by financing activities was $600,000 consisting of proceeds from the sale of common stock, compared to $1,407,000 during the prior period.

**Liquidity and Capital Resources**

As of July 8, 2025, we had cash on hand of approximately $105,015. Management believes this amount is not sufficient to meet our operating needs for the next 12 months, and in order to meet our working capital requirements, we will need to either raise sufficient capital or reduce our expenditures. We will rely on our ability to improve operating cash flow or raise additional capital through the sale of debt or equity securities in addition to our existing cash and cash equivalents to meet our working capital requirements for at least the next 12 months.

The Company's unaudited consolidated financial statements for the year ended December 31, 2024 and 2023 were prepared under the assumption that it would continue operations as a going concern. However, the report of the Company's independent registered public accounting firm that accompanies the Company's consolidated financial statements for the years ended December 31, 2024 and 2023 contain a qualification in which such firm expressed substantial doubt about the Company's ability to continue as a going concern.

**Results of Operations for the Three Months Ended March 31, 2025 Compared with the Three Months Ended March 31, 2024**

***Selling, General, and Administrative Expenses***

Selling, general, and administrative expenses ("SG&A") were $234,353 for the three months ended March 31, 2025, a decrease of $10,622 or 4.3%, compared to $244,975 during the three months ended March 31, 2024. SG&A expenses consisted primarily of payroll and related costs, professional fees, consulting expenses, and director compensation.

***Interest Expense***

 ****

Interest expense was $10,397 during the three months ended March 31, 2025, an increase of $2,411 or 30.2%, compared to interest expense of $7,986 during the three months ended March 31, 2024. Interest expenses consists of interest on the Company's note payable and related party loan payable.

***Net Loss From Continuing Operations***

 ****

For the reasons above, the Company had a net loss from continuing operations of $244,750 for the three months ended March 31, 2025, compared to $252,961 for the three months ended March 31, 2024.

***Net Loss Attributable to Non-controlling Interest8***

 ****

Net loss attributable to non-controlling interest was $0 during the three months ended March 31, 2025, a decrease of $4,102 compared to $4,102 during the three months ended March 31, 2024. During the prior period, the Company held an 82.77% interest in Arizona Green Power ("AGP"); during the three months ended March 31, 2025, the Company sold its interest in AGP, eliminating any minority interest.

***Net Loss from Discontinued Operations***

 ****

Net loss attributable to discontinued operations was $0 during the three months ended March 31, 2025, a decrease of $20,209 compared to $20,809 during the three months ended March 31, 2024. Discontinued operations consist of the activities of AGP.

***Consolidated Net Loss***

 ****

For the reasons above, consolidated net loss was $245,530 during the three months ended March 31, 2025, a decrease of $24,138 compared to $269,668 during the three months ended March 31, 2024.

***Cash Flows from Operating Activities***

 ****

Cash flows used in operating activities were ($42,412) during the three months ended March 31, 2025, a decrease of $153,825 or 78% compared to ($196,237) during the prior period. The Company currently has no sales. Cash flows from operating activities consists of the net loss of ($245,530) reduced by increases in non-cash costs, primarily accrued payroll of $107,838, stock based compensation of $34,793, accounts payable of $25,302, and accrued liabilities – related party of $25,000.

***Cash Flows Provided by Financing Activities***

 ****

For the three months ended March 31, 2025, cash provided by financing activities was $60,000 consisting of proceeds from the sale of common stock. There were no cash flows from financing activities in the prior period.

**Liquidity and Capital Resources**

As of July 8, 2025, we had cash on hand of approximately $105,015. Management believes this amount is not sufficient to meet our operating needs for the next 12 months, and in order to meet our working capital requirements, we will need to either raise sufficient capital or reduce our expenditures. We will rely on our ability to improve operating cash flow or raise additional capital through the sale of debt or equity securities in addition to our existing cash and cash equivalents to meet our working capital requirements for at least the next 12 months.

The Company's unaudited consolidated financial statements for the three months ended March 31, 2025 and 2024 were prepared under the assumption that it would continue operations as a going concern. However, the report of the Company's independent registered public accounting firm that accompanies the Company's consolidated financial statements for the years ended December 31, 2024 and 2023 contain a qualification in which such firm expressed substantial doubt about the Company's ability to continue as a going concern.

**Critical Accounting Policy and Estimates**

*Use of Estimates in the Preparation of Financial Statements*

 

The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. These estimates include certain assumptions related to, among others, valuation of stock-based services, operating right of use assets and liabilities, and income taxes. On an on-going basis, we evaluate these estimates, including those related to revenue recognition and concentration of credit risk. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Accounts subject to estimate and judgements are accounts receivable reserves, income taxes, intangible assets, contingent liabilities, and equity-based instruments. Actual results may differ from these estimates under different assumptions or conditions. We believe our estimates have not been materially inaccurate in past years, and our assumptions are not likely to change in the foreseeable future.

<u>Fair Value of Financial Instruments</u>

The Company measures its financial assets and liabilities in accordance with accounting principles generally accepted in the United States of America. The estimated fair values approximate their carrying value because of the short-term maturity of these instruments or the stated interest rates are indicative of market interest rates. These fair values have historically varied due to the market price of the Company's stock at the date of valuation.

<u>Leases</u> 

The Company determines if an arrangement is a lease at inception. Operating lease right-of-use assets ("ROU assets") and short-term and long-term lease liabilities are included on the face of the condensed consolidated balance sheet. Finance lease ROU assets are presented within other assets, and finance lease liabilities are presented within accrued liabilities.

ROU assets represent the right of use to an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company's leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also excludes lease incentives. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are accounted for as a single lease component. For lease agreements with terms less than 12 months, the Company has elected the short-term lease measurement and recognition exemption, and it recognizes such lease payments on a straight-line basis over the lease term.

<u>Income Taxes</u>

The Company uses the liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to financial statements carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. The measurement of deferred tax assets and liabilities is based on provisions of applicable tax law. The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance based on the amount of tax benefits that, based on available evidence, is not expected to be realized.

***Item 3. Properties.***

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We do not own any real estate or other properties materially important to our operations or those of any of our subsidiaries. Our headquarters are currently located in Annapolis, MD and the Company shares space at a location in Herndon, VA and the CEO maintains an office at 1213 Culbreth Drive Suite 103, Wilmington, NC 28405. We believe that our current office facilities are suitable and adequate to meet our needs as they are contemplated to be conducted.

 **

***Item 4. Security Ownership of Certain Beneficial Owners and Management.***

 **

The following table sets forth the beneficial ownership of our common stock as of July 1, 2025 by:

● each person, or group of affiliated persons, whom we know to beneficially own more than 5% of our common stock;

● each of our named executive officers;

● each of our executive officers;

● each of our directors; and

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

The percentage ownership information shown in the column labeled "Percentage of Shares Outstanding" as of July 1 2025 is based upon 51,538,193 shares of common stock outstanding as of July 1, 2025.

We have determined beneficial ownership in accordance with the rules of the Securities and Exchange Commission. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities. In addition, the rules include shares of common stock issuable pursuant to the exercise of stock options or warrants or upon conversion of a security that are either exercisable or convertible on or before July 22, 2025. These shares are deemed to be outstanding and beneficially owned by the person holding those options or warrants for the purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them, subject to applicable community property laws.

Except as otherwise noted below, the address for persons listed in the table is c/o KiNRG, Inc., 1213 Culbreth Drive Suite 103, Wilmington, NC 28405.

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;**Name of Beneficial Owner** | **Number of Shares<br> Beneficially Owned<br> (2)** | **Percentage of Shares<br> Outstanding (2)** |
| ***Names Executive Officers, Executive<br> Officers and Directors:*** | | |
| Ronald W. Pickett | 9842529 | 19.0% |
| Flip Wallen | 2825000 | 5.5% |
| Stephen Sadle | 7915176 | 15.3% |
| Robert P. Crabb | 1552174 | 3.0% |
| H. James Magnuson | 725250 | 1.4% |
| Mossadaq Chughtai | 1637500 | 3.1% |
| Troy A. Hering CPA | 100000 | \* |
| Livian L. Jones | 100000 | \* |
| All executive officers and directors as a group (7 persons) | 23145455 | 44.6% |

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\* denotes less than 1%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Beneficial ownership as reported in the above table has been determined in accordance with Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended, and is not necessarily indicative of beneficial ownership for any other purpose. The number of shares of common stock shown as beneficially owned includes shares of common stock issuable upon the exercise of warrants that will become exercisable within sixty (60) days of July 22, 2025.

 **

***Item 5. Directors And Executive Officers.***

 **

The following table sets forth the names of the company's directors, executive officers, and key employees, and their positions with the company, as of the date hereof:

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| | | | |
|:---|:---|:---|:---|
| **<u>Name</u>** | **<u>Age</u>** | **<u>Position(s)</u>** | **<u>Terms of Office (directors)</u>** |
| Ronald W. Pickett | 77 | President, Chief Executive Officer, Chairman |  |
| Flip Wallen | 63 | President |  |
| Stephen Sadle | 79 | Chief Operation Officer and Director |  |
| Rober P. Crabb | 77 | Secretary |  |
| H. James Magnuson | 71 | Director |  |
| Mossadq Chughtai | 66 | Director |  |
| Troy A. Hering CPA | 50 | Director |  |
| Livian L. Jones | 59 | Director |  |

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None of the events listed in Item 401(f) of Regulation S-K has occurred during the past ten years and that is material to the evaluation of the ability or integrity of any of the Company's directors, director nominees or executive officers.

The following is a brief account of the business experience during the past five years (and, in some instances, for prior years) of each director and executive officer.

**Ronald W. Pickett, CEO & Chairman**

Ron Pickett founded the Company in July 2010. He has remained Chairman and CEO since January 2011. Prior to this experience, Ron Pickett served as Youth Advisor to President Johnson until January 1969. After leaving the Johnson Administration in 1969 he consulted for the Frouge Corporation and its partner Gulf Oil, obtaining a Title 10 loan agreement for a large real estate development in San Francisco Bay area. He then consulted Madison Square Garden Corporation liquidating assets from its real estate portfolio after its acquisition of control by Phil Levin. After the passing of Levin, Pickett and a group of the Levin "team" formed a new development group led by Pickett developing multiple projects in Maryland, Florida and NYC. After selling that operation (late 1975) Pickett developed over 200 units in Old Town Alexandria, Virginia. Pickett held a real estate brokers license for 30 years as well as an Unlimited Contractors License. In 1980 he founded Medical Advisory Systems, the first company to commercialize and institute an international program for telemedicine for vessels at sea, also F&E Resource Systems (FERS) the largest composting/recycling facility in the USA, processing over 2,000 tons per day and reclaiming 92% of the waste stream while creating and innovating the entire system, and Telkonet (TKO) the first company to commercialize broadband over powerlines, creating the ability to encrypt and send data over the existing electrical infrastructure of commercial and industrial buildings, as well as military vessels.

**Flip Wallen, President**

Mil "Flip" Wallen, III, a 43-year veteran of the Commercial Real Estate Industry, specializes in Mission Critical construction, design, and development. He is a graduate of James Madison University with a BBA in Management Information Systems. Flip's proclivity for the latest technology trends helps keep his internal processes fresh, innovative, and competitive with industry standards. Flip has become one of the most trusted sources of knowledge, wisdom, and leadership in the Data Center market, particularly in Northern Virginia's "Data Center Alley" located in Ashburn, VA – where he has developed and built over 2 million square feet in this market alone. He is the founder and owner of TRINITY Group Construction, established in 2002, an award-winning construction company and one of the leading commercial construction firms in the DC Metro Area, specializing in the data center market. Flip will advise the company on integrating an Eco-Energy Park and GH2 plant with their Arizona Tower Project. He has agreed to join the company during the fourth quarter of 2020 as Executive Vice President of Construction & Development. Flip was elected President of KiNRG in late 2023.

**Stephen Sadle, Chief Operating Officer & Director**

Mr. Sadle, co-founder of the Company, is an entrepreneur with over 40 years of diversified experience in management, contracting, and heavy infrastructure development, interfacing with both the government and private sectors. He was the co-founder and President of PAVCO, The Pavement Consultants Group, that consulted, designed and managed infrastructure projects for a variety of Fortune companies, as well as National Striping Company, a Washington DC regional multifaceted remediation and construction company and was awarded the Small Businessman of the Year Award for the Washington Metropolitan Area. He is experienced in the development and management of new corporate entities. He was co-founder, Chief Operating Officer and Director of Telkonet, a Company that commercialized broadband communications over powerlines for hospitality, government and commercial use and are developers, manufacturers and vendors of energy efficiency and smart grid networking technology. Mr. Sadle served as Vice President of Business Development for a large regional heavy highway/construction company with revenues in excess of $220MM and created an innovative environmental remediation division that handled the cleanup of multiple environmentally impaired sites, federal, municipal and industrial.

**Robert P. Crabb, Secretary** 

Mr. Crabb has over 40 years of public and private sector experience including 15years in the insurance industry including, sales and sales management with MetLife and independent property and casualty brokerage. His entrepreneurial expertise includes marketing consulting, corporate management and commercial/residential real estate development. He has served in a corporate governance capacity as secretary to a number of start-up companies. Since September, 2007, Mr. Crabb has been an independent real estate development consultant. Until September, 2007, Mr. Crabb was Secretary of Telkonet, until February, 2009, Mr. Crabb was Secretary of Microwave Systems, and until October, 2009, Mr. Crabb was Secretary of Geeks on Call.

**H. James Magnuson, Director**

Mr. Magnuson has served as a member of the Company's Board of Directors since 2007. Mr. Magnuson resigned as the Company's Vice President effective December 29, 2010 pursuant to the terms of the Merger Agreement. Since 1979, Mr. Magnuson has been an attorney engaged in the private practice of law in Coeur d'Alene, Idaho, and received his BS degree from the University of Idaho and his Juris Doctorate from Boston College.

**Mossadaq Chughtai, Director**

Mossadaq Chughtai is an accomplished business executive, CEO and owner of Zima Inc., which owns various commercial real estate projects throughout Washington DC, Maryland, Virginia and Pennsylvania in east coast. The Development arm of his company has been involved in development of a 2.4 million sq. ft. data center that will be one of the top five largest data centers in the world. As a member of United States Chamber of commerce in Washington DC, he has visited Pakistan as a member of a US business delegation. Mr. Chughtai has also served on the board of Islamic Saudi Academy, in 2009 and 2010, a prestigious private school owned by Government of Saudi Arabia based in Washington DC. Besides serving on the boards of several organizations including Pakistan American Business Council, Jinnah Foundation for Peace and Public Policy, Healing & Caring Foundation, he is also president of AMAA Muslim Cemetery in Stafford, VA, first ever and the largest Muslim Cemetery in USA which operates as a non-profit entity. Mr. Chughtai has made several appearances in international media including ABC, FOX News, CNN International, Press TV, Al Jazeera, GEO and AAJ TV. His interviews have been published in Washington Post, Business Recorder, Jang, Dawn, Nation, The World News, Pakistan Today as well as in various other publications. He has an executive degree in the field of AI (artificial intelligence) from MIT and has attended Murray College in Sialkot, Pakistan. Mr. Chughtai's extensive career in global international business makes him uniquely qualified to serve as a director.

**Troy A. Hering, CPA, Director**

Troy Hering is an assertive senior financial and accounting executive in the professional services and high technology industries, with over 30 years of progressive experience in accounting, financial management and analysis, strategic planning, due diligence, mergers & acquisitions, budgeting, contract administration, team building and personnel management. He is committed to achieving strategic corporate goals and objectives through proactive team leadership and dedicated to serving clients and maximizing profitability by providing accurate, timely and effective financial expertise to the executive management team and operational team leaders. Mr. Hering is Certified Public Accountant, CPA, Licensed in the state of Virginia. He attended the Graduate Accounting Certificate Program at the University of Virginia and received a Bachelor of Science, Finance and Management, McIntire School of Commerce, University of Virginia. Mr. Hering is a Member of the Virginia Society of Certified Public Accountants and Northern Virginia Society of Certified Public Accountants. Mr. Hering's training an extensive experience in these fields gives him the qualifications and skills to serve as a director.

**Livian L. Jones, Director**

Ms. Jones is a strong leader with over 25 years' experience in construction and development with proven project management, operations, business development, and marketing skills. A collaborator and consensus builder with an extensive network throughout North and South Carolina. Ms. Jones has knowledge and oversight of managing commercial, retail, and residential development and construction. Ms. Jones holds a Bachelor of Science, Criminal Justice BSCJ, from Appalachian State University and a Master of Business Administration from the University of North Carolina, Wilmington. She is a North Carolina Licensed General Contractor and has completed DBE/ACDBE Training by The National DBE Training Institute. Ms Jones serves on many boards including South State Bank Regional Board -Wilmington, NC (2015-Present), First Tee Board (2016- Present), Appalachian Foundation Board (2007- 2020). Ms. Jones' experience in these fields and on these boards gives her the qualifications and skill to serve as a director.

**Family Relationships**

There are no family relationships among any of our executive officers and directors

**Corporate Governance**

**Board of Directors and Board Committees**

Our board of directors currently consists of six directors. Our amended and restated certificate of incorporation will provide that the number of directors on our board of directors shall be fixed exclusively by resolution adopted by our board of directors. We may apply to list our common stock on the NASDAQ Capital Market provided however there is no guarantee that we will be successful in these efforts. Under the rules of NASDAQ, "independent" directors must make up a majority of a listed company's board of directors. In addition, applicable NASDAQ rules require that, subject to specified exceptions, each member of a listed company's audit and compensation committees be independent within the meaning of the applicable NASDAQ rules. Audit committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Exchange Act.

When considering whether directors have the experience, qualifications, attributes or skills, taken as a whole, to enable our board of directors to satisfy its oversight responsibilities effectively in light of our business and structure, the board of directors focuses primarily on each person's background and experience as reflected in the information discussed in each of the directors' individual biographies set forth above. We believe that our directors provide an appropriate mix of experience and skills relevant to the size and nature of our business.

**Director Independence**

Our board of directors undertook a review of the independence of our directors and considered whether any director has a relationship with us that could compromise that director's ability to exercise independent judgment in carrying out that director's responsibilities. Our board of directors has affirmatively determined that H. James Magnuson, Mossadaq Chughtai, Troy A. Hering CPA and Livian L Jones are each an "independent director," as defined under the Nasdaq rules.

**Committees of Our Board of Directors**

Our board of directors directs the management of our business and affairs, as provided by Nevada law, and conducts its business through meetings of the board of directors and its standing committees. We will have a standing audit committee, nominating and corporate governance committee and compensation committee. In addition, from time to time, special committees may be established under the direction of the board of directors when necessary to address specific issues.

***Audit Committee***

Our audit committee will be responsible for, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•approve and retain the independent auditors to conduct the annual audit of our financial statements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•review the proposed scope and results of the audit;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•review and pre-approve audit and non-audit fees and services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•review accounting and financial controls with the independent auditors and our financial and accounting staff;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•review and approve transactions between us and our directors, officers and affiliates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•establish procedures for complaints received by us regarding accounting matters;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•oversee internal audit functions, if any; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•prepare the report of the audit committee that the rules of the Securities and Exchange Commission require to be included in our annual meeting proxy statement.

As of this filing, our audit committee consists of Troy Hering, James Magnuson and Mossadaq, with Mr. Hering serving as chair. Rule 10A-3 of the Exchange Act and the Nasdaq rules require that our audit committee have at least one independent member upon the listing of our common stock, have a majority of independent members within 90 days of the date of this prospectus and be composed entirely of independent members within one year of the date of this prospectus. Our board of directors has affirmatively determined that Mr. Hering meets the definition of "independent director" under the Nasdaq rules, that Mr. Hering meets the independence standards under Rule 10A-. Each member of our audit committee meets the financial literacy requirements of the Nasdaq rules. In addition, our board of directors has determined that Mr. Hering will qualify as an "audit committee financial expert," as such term is defined in Item 407(d)(5) of Regulation S-K. Our board of directors will adopt a written charter for the audit committee, which will be available on our principal corporate website at www.kinrg.com substantially concurrently with the consummation of this offering. The information on any of our websites is deemed not to be incorporated in this prospectus or to be part of this prospectus.

***Compensation Committee***

Our compensation committee is responsible for, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•review and recommend the compensation arrangements for management, including the compensation for our president and chief executive officer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•establish and review general compensation policies with the objective to attract and retain superior talent, to reward individual performance and to achieve our financial goals;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•administer our stock incentive plans; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•prepare the report of the compensation committee that the rules of the Securities and Exchange Commission require to be included in our annual meeting proxy statement.

As of this filing, our compensation committee consists of Mr. Magnuson, Mr. Hering and Ms. Jones with Mr. Magnuson serving as chair. Our board has determined that each member of the compensation committee are "non-employee directors" as defined in Section 16b-3 of the Exchange Act. Our board of directors will adopt a written charter for the compensation committee, which will be available on our principal corporate website at kinrg.com substantially concurrently with the consummation of this offering. The information on any of our websites is deemed not to be incorporated in this prospectus or to be part of this prospectus.

***Nominating and Governance Committee***

 ****

Our nominating and governance committee is responsible for, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•identify and nominate members of the board of directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•develop and recommend to the board of directors a set of corporate governance principles applicable to our company; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•oversee the evaluation of our board of directors.

As of this filing, our nominating and corporate governance committee will consist of H. James Magnuson , and Troy A. Hering, Livian L Jones and H. James Magnusonwith serving as chair. Our board of directors will adopt a written charter for the nominating and corporate governance committee, which will be available on our principal corporate website at kinrg.com substantially concurrently with the consummation of this offering. The information on any of our websites is deemed not to be incorporated in this registration statement.

**Compensation Committee Interlocks and Insider Participation**

Except for Mr. Pickett and Mr. Sadle, none of our executive officers serves as a member of the board of directors or compensation committee (or other committee performing equivalent functions) of any entity that has one or more executive officers serving on our board of directors or compensation committee.

***Item 6. Executive Compensation.***

 ****

The following table and related footnotes show the compensation incurred and or paid during the fiscal years ended December 31, 2024 and 2023, to all individuals serving as the Company's principal executive officer or acting in a similar capacity during the last completed fiscal year. No other executive officers received compensation in excess of $100,000 for such fiscal years.

**Summary Compensation Table**

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| Name and principal position | Year | Salary<br> ($) | Bonus<br> ($) | Stock awards<br> ($) | Non-equity incentive plan compensation | Nonqualified deferred compensation earnings ($) | All other Compensation<br> ($) | Total ($) |
| Ronald W. Pickett, | 2024 | 200000<sup>(2)</sup> | $– $|  | $– $|  | $– | 200000 |
| President, Chief Executive Officer, Chairman and Principal Accounting officer <sup>(1)</sup> | 2023 | 200000<sup>(2)</sup> | – |  | – |  | – | 200000 |
| Stephen L. Sadle | 2023 | 175000<sup>(4)</sup> | – |  | – |  | – | 175000 |
| Chief Operating Officer <sup>(3)</sup> | 2022 | 175000<sup>(4)</sup> | – |  | – |  | – | 175000 |

---

______________

(1) Appointed as President, Chief Executive Officer and Chairman effective December 29, 2010 pursuant to the terms of the Merger Agreement.

(2) Amounts consist of $127,308 of accrued salary for Mr. Pickett for the years ended December 31, 2024.

(3) Appointed as Chief Operating Officer effective December 29, 2010 pursuant to the terms of the Merger Agreement.

(4) Amounts consist of $195,615 of accrued salary for Mr. Sadle for the years ended December 31, 2024.

**Employment Contracts and Termination of Employment and Change-In-Control Arrangements**

On December 29, 2010, pursuant to the Merger, Solar Wind Energy (f/k/a Clean Wind Energy) became a wholly-owned subsidiary of the Company. Solar Wind Energy (f/k/a Clean Wind Energy) has employment agreements with Ronald Pickett and Stephen Sadle its executive officers. Each of the employment agreements was effective January 1, 2014.

The Indemnification Agreements provide that the Company will indemnify the Company's officers and directors, to the fullest extent permitted by law, relating to, resulting from or arising out of any threatened, pending or completed action, suit or proceeding, or any inquiry or investigation by reason of the fact that such officer or director (i) is or was a director, officer, employee or agent of the Company or (ii) is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful.

In addition, the Indemnification Agreements provide that the Company will make an advance payment of expenses to any officer or director who has entered into an Indemnification Agreement, in order to cover a claim relating to any fact or occurrence arising from or relating to events or occurrences specified in this paragraph, subject to receipt of an undertaking by or on behalf of such officer or director to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Company as authorized under this Agreement.

**Director Compensation Table**

The following table and related footnotes show the compensation incurred and or paid during the fiscal year ended December 31, 2024 to the Company's directors for their service as directors.

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Name** | Fees earned or paid in cash<br> ($) | Stock awards<br> ($) | Option awards<br> ($) | Non-equity <br> incentive plan <br> compensation<br> ($) | Nonqualified deferred <br> compensation earnings<br> ($) | All other <br> compensation<br> ($) | Total<br> ($) |
| Robert P. Crabb <sup>(1)</sup> | $— | $| $0 | $0 | $0 | $0 | $— |
| H. James Magnuson | $0 | $| $0 | $0 | $0 | $0 | $— |
| Arthur P. Dammarell | $— | $| $0 | $0 | $0 | $0 | $— |
| Mossadaq Chughtai | $0 |  |  |  |  | $0 | $0 |
| Troy A. Hering CPA | $0 |  |  |  |  | $0 | $0 |
| Livian L Jones | $0 |  |  |  |  | $0 | $0 |

---

**Narrative to Summary Compensation Table and Director Compensation Table**

During the year ended December 31, 2020, the Company provided no stock options, warrants, or stock appreciation rights. On December 29, 2010, pursuant to the Merger, KiNRG Global Solutions, Inc. (f/k/a Solar Wind Energy, Inc.) became a wholly-owned subsidiary of the Company. The Company has employment agreements with its officers as described below. The Company has accrued salaries for all its executives from inception through December 31, 2024 and the balance amounted to $$322,923 at December 31, 2024.

No officer, other than Flip Wallen, President, or director has outstanding unexercised options, stock that has not vested, or equity incentive plan awards. The Company maintains no employee benefits plans.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Name** | **Position(s)** | **Term** | **Salary** | **Bonus** | **Severance** |
| Ronald W. Pickett | President, Chief Executive Officer | 1 year; renewable for 1 year on mutual consent \* | $200000 | Board Discretionary | Twelve (12) months' salary and benefits for termination without cause. |
| Stephen Sadle | Chief Operating Officer | 1 year; renewable for 1 year on mutual consent \* | $175000 | Board Discretionary | Twelve (12) months' salary and benefits for termination without cause. |
| Robert P. Crabb | Secretary |  | $25000 |  | . |

---

____________________

\* Terms to modify the 1 year contract extension by mutual consent have been agreed to by the Officers and Directors. Provisions for automatic salary increases based on specific events related to business development successes, rights for the officers to convert any accrued salary into Company notes, and rights to receive warrants to purchase Company stock at market plus 20% premium at the time of the grant while notes are outstanding will be incorporated in the new contracts. The parties have mutually agreed to a stock option plan, the specific terms to be negotiated as part of the final contract.

**Equity Compensation Plan Information**

The Company did not have an equity compensation plan outstanding as of December 31, 2024.

<u>2021 Incentive Stock Plan</u>

In February 2021, the Company adopted its 2021 Incentive Stock Plan. No stock option have been granted from the Plan.

**General**

The 2021 Incentive Plan was adopted by the Board of Directors. The Board of Directors has reserved 4,000,000 shares of Common Stock for issuance under the 2021 Incentive Plan. Under the Plan, options may be granted which are intended to qualify as Incentive Stock Options ("ISOs") under Section 422 of the Internal Revenue Code of 1986 (the "Code") or which are not ("Non-ISOs") intended to qualify as Incentive Stock Options thereunder. Other types of equity awards may also be granted under the Plan including but not limited to restricted stock, restricted stock units, and stock appreciation rights, which together with the ISO's and Non-ISO's are hereinafter collectively referred to as "Awards".

The 2021 Incentive Plan is not a qualified deferred compensation plan under Section 401(a) of the Internal Revenue Code and is not subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA").

**Purpose**

The primary purpose of the 2021 Incentive Plan is to attract and retain the best available personnel for the Company in order to promote the success of the Company's business and to facilitate the ownership of the Company's stock by employees. In the event that the 2021 Incentive Plan is not adopted the Company, the Company may have considerable difficulty in attracting and retaining qualified personnel, officers, directors and consultants. As present, our board of directors has no immediate plans, arrangements or understandings to issue awards under the 2021 Incentive Plan.

**Administration**

The 2021 Incentive Plan is administered by the Board or by a committee of the Board that may be designated by the Board to administer the Plan, composed of not less than two members of the Board all of whom are disinterested persons, as contemplated by Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended (the "**Exchange Act**"). All questions of interpretation of the 2021 Incentive Plan are determined by the Board or such Committee, and its decisions are final and binding upon all participants.

**Eligibility**

Under the 2021 Incentive Plan, equity grants may be granted to employees, officers, directors or consultants of the Company, as provided in the 2021 Incentive Plan.

**Terms of Awards**

The terms of Awards granted under the Plan shall be contained in an agreement between the participant and the Company and such terms shall be determined by the Board of Directors consistent with the provisions of the Plan. The terms of Awards may or not require a performance condition in order to vest the equity comprised in the relevant Award. The terms of each Option granted under the Plan shall be contained in a stock option agreement between the Optionee and the Company and such terms shall be determined by the Board of Directors consistent with the provisions of the Plan, including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) PURCHASE PRICE. The purchase price of the Common Shares subject to each ISO shall not be less than the fair market value (as set forth in the 2021 Incentive Plan), or in the case of the grant of an ISO to a Principal Stockholder, not less that 110% of fair market value of such Common Shares at the time such Option is granted. The purchase price of the Common Shares subject to each Non-ISO shall be determined at the time such Option is granted, but in no case less than 100% of the fair market value of such Common Shares at the time such Option is granted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) VESTING. The dates on which each Option (or portion thereof) shall be exercisable and the conditions precedent to such exercise, if any, shall be fixed by the Committee, in its discretion, at the time such Option is granted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) EXPIRATION. The expiration of each Option shall be fixed by the Committee, in its discretion, at the time such Option is granted; however, unless otherwise determined by the Committee at the time such Option is granted, an Option shall be exercisable for ten (10) years after the date on which it was granted (the "Grant Date"). Each Option shall be subject to earlier termination as expressly provided in the 2021 Incentive Plan or as determined by the Committee, in its discretion, at the time such Option is granted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) TRANSFERABILITY. No Option shall be transferable, except by will or the laws of descent and distribution, and any Option may be exercised during the lifetime of the Optionee only by him. No Option granted under the Plan shall be subject to execution, attachment or other process.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) OPTION ADJUSTMENTS. The aggregate number and class of shares as to which Options may be granted under the Plan, the number and class shares covered by each outstanding Option and the exercise price per share thereof (but not the total price), and all such Options, shall each be proportionately adjusted for any increase decrease in the number of issued Common Shares resulting from split-up spin-off or consolidation of shares or any like Capital adjustment or the payment of any stock dividend.

Except as otherwise provided in the 2021 Incentive Plan, any Option granted hereunder shall terminate in the event of a merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation of the Company. However, the Optionee shall have the right immediately prior to any such transaction to exercise his Option in whole or in part notwithstanding any otherwise applicable vesting requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) TERMINATION, MODIFICATION AND AMENDMENT. The 2021 Incentive Plan (but not Awards previously granted under the Plan) shall terminate ten (10) years from the earlier of the date of its adoption by the Board of Directors or the date on which the Plan is approved by the affirmative vote of the holders of a majority of the outstanding shares of capital stock of the Company entitled to vote thereon, and no Award shall be granted after termination of the Plan. Subject to certain restrictions, the Plan may at any time be terminated and from time to time be modified or amended by the affirmative vote of the holders of a majority of the outstanding shares of the capital stock of the Company present, or represented, and entitled to vote at a meeting duly held in accordance with the applicable laws of the State of Delaware.

The primary purpose of the 2021 Incentive Plan is to attract and retain the best available personnel for the Company in order to promote the success of the Company's business and to facilitate the ownership of the Company's stock by employees. In the event that the 2021 Incentive Plan is not adopted the Company, the Company may have considerable difficulty in attracting and retaining qualified personnel, officers, directors and consultants. As present, our board of directors has no immediate plans, arrangements or understandings to issue awards under the 2021 Incentive Plan.

**Administration**

The 2021 Incentive Plan is administered by the Board or by a committee of the Board that may be designated by the Board to administer the Plan, composed of not less than two members of the Board all of whom are disinterested persons, as contemplated by Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended (the "**Exchange Act**"). All questions of interpretation of the 2021 Incentive Plan are determined by the Board or such Committee, and its decisions are final and binding upon all participants.

**Eligibility**

Under the 2021 Incentive Plan, equity grants may be granted to employees, officers, directors or consultants of the Company, as provided in the 2021 Incentive Plan.

**Terms of Awards**

The terms of Awards granted under the Plan shall be contained in an agreement between the participant and the Company and such terms shall be determined by the Board of Directors consistent with the provisions of the Plan. The terms of Awards may or not require a performance condition in order to vest the equity comprised in the relevant Award. The terms of each Option granted under the Plan shall be contained in a stock option agreement between the Optionee and the Company and such terms shall be determined by the Board of Directors consistent with the provisions of the Plan, including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) PURCHASE PRICE. The purchase price of the Common Shares subject to each ISO shall not be less than the fair market value (as set forth in the 2021 Incentive Plan), or in the case of the grant of an ISO to a Principal Stockholder, not less that 110% of fair market value of such Common Shares at the time such Option is granted. The purchase price of the Common Shares subject to each Non-ISO shall be determined at the time such Option is granted, but in no case less than 100% of the fair market value of such Common Shares at the time such Option is granted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) VESTING. The dates on which each Option (or portion thereof) shall be exercisable and the conditions precedent to such exercise, if any, shall be fixed by the Committee, in its discretion, at the time such Option is granted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) EXPIRATION. The expiration of each Option shall be fixed by the Committee, in its discretion, at the time such Option is granted; however, unless otherwise determined by the Committee at the time such Option is granted, an Option shall be exercisable for ten (10) years after the date on which it was granted (the "Grant Date"). Each Option shall be subject to earlier termination as expressly provided in the 2021 Incentive Plan or as determined by the Committee, in its discretion, at the time such Option is granted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) TRANSFERABILITY. No Option shall be transferable, except by will or the laws of descent and distribution, and any Option may be exercised during the lifetime of the Optionee only by him. No Option granted under the Plan shall be subject to execution, attachment or other process.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) OPTION ADJUSTMENTS. The aggregate number and class of shares as to which Options may be granted under the Plan, the number and class shares covered by each outstanding Option and the exercise price per share thereof (but not the total price), and all such Options, shall each be proportionately adjusted for any increase decrease in the number of issued Common Shares resulting from split-up spin-off or consolidation of shares or any like Capital adjustment or the payment of any stock dividend.

Except as otherwise provided in the 2021 Incentive Plan, any Option granted hereunder shall terminate in the event of a merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation of the Company. However, the Optionee shall have the right immediately prior to any such transaction to exercise his Option in whole or in part notwithstanding any otherwise applicable vesting requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) TERMINATION, MODIFICATION AND AMENDMENT. The 2021 Incentive Plan (but not Awards previously granted under the Plan) shall terminate ten (10) years from the earlier of the date of its adoption by the Board of Directors or the date on which the Plan is approved by the affirmative vote of the holders of a majority of the outstanding shares of capital stock of the Company entitled to vote thereon, and no Award shall be granted after termination of the Plan. Subject to certain restrictions, the Plan may at any time be terminated and from time to time be modified or amended by the affirmative vote of the holders of a majority of the outstanding shares of the capital stock of the Company present, or represented, and entitled to vote at a meeting duly held in accordance with the applicable laws of the State of Delaware.

**FEDERAL INCOME TAX ASPECTS OF THE 2021 INCENTIVE PLAN**

THE FOLLOWING IS A BRIEF SUMMARY OF THE EFFECT OF FEDERAL INCOME TAXATION UPON THE PARTICIPANTS AND THE COMPANY WITH RESPECT TO THE PURCHASE OF SHARES UNDER THE 2021 INCENTIVE PLAN. THIS SUMMARY DOES NOT PURPORT TO BE COMPLETE AND DOES NOT ADDRESS THE FEDERAL INCOME TAX CONSEQUENCES TO TAXPAYERS WITH SPECIAL TAX STATUS. IN ADDITION, THIS SUMMARY DOES NOT DISCUSS THE PROVISIONS OF THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH THE PARTICIPANT MAY RESIDE, AND DOES NOT DISCUSS ESTATE, GIFT OR OTHER TAX CONSEQUENCES OTHER THAN INCOME TAX CONSEQUENCES. THE COMPANY ADVISES EACH PARTICIPANT TO CONSULT HIS OR HER OWN TAX ADVISOR REGARDING THE TAX CONSEQUENCES OF PARTICIPATION IN THE 2021 Incentive Plan AND FOR REFERENCE TO APPLICABLE PROVISIONS OF THE CODE.

**Incentive Stock Options (ISO)**

The recipient of an incentive stock option generally will not be taxed upon grant of the option. Federal income taxes are generally imposed only when the shares of common stock from exercised incentive stock options are disposed of, by sale or otherwise. The amount by which the fair market value of the common stock on the date of exercise exceeds the exercise price is, however, included in determining the option recipient's liability for the alternative minimum tax. If the incentive stock option recipient does not sell or dispose of the shares of common stock until more than one year after the receipt of the shares and two years after the option was granted, then, upon sale or disposition of the shares, the difference between the exercise price and the market value of the shares of common stock as of the date of exercise will be treated as a capital gain, and not ordinary income. If a recipient fails to hold the shares for the minimum required time the recipient will recognize ordinary income in the year of disposition generally in an amount equal to any excess of the market value of the common stock on the date of exercise (or, if less, the amount realized or disposition of the shares) over the exercise price paid for the shares. Any further gain (or loss) realized by the recipient generally will be taxed as short-term or long-term gain (or loss) depending on the holding period. We will generally be entitled to a tax deduction at the same time and in the same amount as ordinary income is recognized by the option recipient, if any.

**Nonstatutory Stock Options (Non-ISO)**

The recipient of stock options not qualifying as incentive stock options generally will not be taxed upon the grant of the option. Federal income taxes are generally due from a recipient of nonstatutory stock options when the stock options are exercised. The excess of the fair market value of the common stock purchased on such date over the exercise price of the option is taxed as ordinary income. Thereafter, the tax basis for the acquired shares is equal to the amount paid for the shares plus the amount of ordinary income recognized by the recipient. We will generally be entitled to a tax deduction at the same time and in the same amount as ordinary income is recognized by the option recipient by reason of the exercise of the option.

**Other Awards**

Recipients who receive restricted stock unit awards will generally recognize ordinary income when they receive shares upon settlement of the awards, in an amount equal to the fair market value of the shares at that time. Recipients who receive awards of restricted shares subject to a vesting requirement will generally recognize ordinary income at the time vesting occurs, in an amount equal to the fair market value of the shares at that time minus the amount, if any, paid for the shares. However, a recipient who receives restricted shares which are not vested may, within 30 days of the date the shares are transferred, elect in accordance with Section 83(b) of the Code to recognize ordinary compensation income at the time of transfer of the shares rather than upon the vesting dates. Recipients who receive performance shares will generally recognize ordinary income at the time of settlement, in an amount equal to the cash received, if any, and the fair market value of any shares received. We will generally be entitled to a tax deduction at the same time and in the same amount as ordinary income is recognized by the recipient.

**Restrictions on Resale**

Certain officers and directors of the Company may be deemed to be "affiliates" of the Company as that term is defined under the Securities Act. The Common Stock acquired under the 2021 Incentive Plan by an affiliate may be reoffered or resold only pursuant to an effective registration statement or pursuant to Rule 144 under the Securities Act or another exemption from the registration requirements of the Securities Act.

***Item 7. Certain Relationships and Related Person Transactions.***

 ****

Except as set forth below, since January 1, 2024, there has not been, nor is there currently proposed, any transaction or series of similar transactions to which the Company was or will be a party in which the amount involved exceeds the lesser of $120,000 or one percent of the average of the Company's total assets at year end for the last two completed fiscal years; and in which any director, executive officer, other stockholders of more than 5% of the Company's Common Stock or any member of their immediate family had or will have a direct or indirect material interest.

***Item 8. Legal Proceedings.***

 ****

We are not currently involved in any legal proceedings, however, from time to time, we may become a party to various legal actions and complaints arising in the ordinary course of business. In addition to commitments and obligations in the ordinary course of business, we are subject to various claims, pending and potential legal actions for damages, investigations relating to governmental laws and regulations and other matters arising out of the normal conduct of our business. It is possible that cash flows or results of operations could be materially affected in any particular period by the unfavorable resolution of one or more of these contingencies.

***Item 9. Market Price Of, And Dividends On, The Registrant's Common Equity And Related Stockholder Matters.***

 ****

Our shares were quoted on the OTC Pink, under the symbol "SWET" until 2019, when the U.S. Securities and Exchange Commission (the "SEC") suspended trading of our securities, since we failed to comply with certain reporting requirements outlined in the Securities Exchange Act of 1934. Subsequently, the SEC issued an Order that the registration of each class of the Company's securities registered pursuant to Exchange Act Section 12 be revoked pursuant to Section 12(j) of the Exchange Act, effective October 9, 2019. Subsequent to the foregoing, our common stock is not listed, traded or quoted on any national stock exchange or on the OTC Markets.

We have filed this Registration Statement on Form 10 with the Commission to satisfy the requirements related to reporting current and accurate information, in order to effectuate the registration of our common stock. It is our intention to upgrade our quotation to active status by causing this Form 10 to be made effective, and to allow our stock to resume trading and to be quoted on the OTC Pink or other platform maintained by OTC Markets Group, Inc.

 **

**Item 10. *Recent Sales of Unregistered Securities.***

 

**Item 11. *Description of Registrant's Securities to be Registered.***

 ****

 The total number of shares of capital stock we are authorized to issue is 260,000,000 shares, of which (a) 250,000,000 are Common Stock, par value $0.0001 per share, and (b) 10,000,000 are Preferred Stock, stated value $0.0001 per share. As of July 1, 2025, 51,538,193 shares of Common Stock and no shares of Preferred Stock were issued and outstanding. We are a Nevada corporation and our affairs are governed by our Articles of Incorporation and By-law. The following are summaries of material provisions of our Articles of Incorporation and By-law insofar as they relate to the material terms of our ordinary shares. Complete copies of our Articles of Incorporation and By-law are filed as exhibits to our public filings.

 *Preferred Stock*

 

The authorized but unissued shares of Preferred Stock may be divided into and issued in designated series from time to time by one or more resolutions adopted by the Board of Directors. The Board of Directors, in its sole discretion, has the power to determine the relative powers, preferences, and rights of each series of Preferred Stock.

*Common Stock*

 

Voting Rights

All of the shares of Common Stock have equal voting rights and power without restriction in preference. Each stockholder, on each matter submitted to a vote at a meeting of stockholders, has one vote for each share registered in the stockholder's name on the books of our company. A quorum at any annual or special meeting of stockholders consists of stockholders representing, either in person or by proxy, a majority of the outstanding shares of our company, entitled to vote at such meeting. The votes of a majority in interest of those present at any properly called meeting or adjourned meeting of stockholders at which a quorum is presented, is sufficient to transact business.

<u>Dividend rights</u>

The Board of Directors may, from time to time, declare and we may pay dividends on its outstanding shares of Common Stock in cash, property, or its own shares, except when we are insolvent or when the payment thereof would render us insolvent or when the declaration or payment thereof would be contrary to any restrictions contained in the Company's governing documents or applicable law. We have never paid, and have no plans to pay, any dividends on its shares of Common Stock.

 <u>Election of Directors</u>

Directors hold office until the next annual meeting of stockholders and are eligible for reelection at such meeting. Directors are elected by a plurality of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. There is no cumulative voting for directors.

<u>Liquidation</u>

In the event of any liquidation, dissolution or winding up of the Company, holders of the common stock have the right to receive ratably and equally all of the assets remaining after payment of liabilities and liquidation preferences of any preferred stock then outstanding.

 <u>Redemption</u>

The common stock is not redeemable or convertible.

<u>Preemptive Rights</u>

The stockholders of our company do not have a preemptive right to acquire our unissued shares.

<u>Right to Amend Bylaws</u>

The Bylaws of our company may be altered, amended or repealed by the affirmative vote of a majority of the voting stock issued and outstanding at any regular or special meeting of the stockholders. The Board of Directors has the power to make, alter, amend and repeal the Bylaws of our company. However, any such Bylaws, or any alteration, amendment or repeal of the Bylaws, may be changed or repealed by the holders of a majority of the stock entitled to vote at any stockholders' meeting.

<u>Anti-Takeover Provisions</u>

As a Nevada corporation, we are subject to the Nevada Control Share Acquisition Statute (Nevada Revised Statutes Sections 78.378 to 78.3793). This statute could have the effect of delaying or preventing a change in control of our company under certain circumstances.

<u>Other</u>

As a Nevada corporation, shares of our Common Stock are subject to all applicable provisions of Nevada law.

 **

**Item 12. *Indemnification of Directors and Officers.***

 **

<br> Our articles of incorporation provide that the Company shall indemnify its officers, directors, employees and agents to the full extent permitted by the laws of Nevada. Our bylaws provide that the Company shall indemnify its directors and officers to the fullest extent not prohibited by the Nevada law. In addition, the Company shall have power to indemnify its employees and other agents as set forth under Nevada law.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

**Item 13. *Financial Statements and Supplementary Data.***

 ****

The financial statements required to be included in this registration statement appear immediately following the signature page to this registration statement beginning on page F-1.

**Item 14. *Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.***

 ****

There are not and have not been any disagreements between the Company and its independent accountants on any matter of accounting principles, practices or financial statement disclosure.

***Item 15. Financial Statements and Exhibits.***

 ****

*(a) Financial Statements*

The information required by this item is contained under the section of the information statement entitled "Index to Financial Statements" (and the financial statements referenced therein). That section is incorporated herein by reference.

*(b) Exhibits*

The following documents are filed as exhibits hereto:

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| | |
|:---|:---|
| Exhibit Number | Exhibit Description |
| 2.1 | [Agreement and Plan of Merger, dated as of December 29, 2010, by and among Superior Silver Mines, Inc., Superior Silver Mines Acquisition Corp., and Clean Wind Energy, Inc.](e6725_ex2-1.htm) |
| 2.2 | [Plan of Domestication of Superior Silver Mines, Inc., dated December 21, 2010](e6725_ex2-2.htm) |
| 2.3 | [Nevada Articles of Domestication of Superior Silver Mines, Inc., dated December 27, 2010](e6725_ex2-3.htm) |
| 2.4 | [Idaho Statement of Domestication of Superior Silver Mines, Inc., dated December 22, 2010](e6725_ex2-4.htm) |
| 3.1 | [Articles of Incorporation of Superior Silver Mines, Inc.](e6725_ex3-1.htm) |
| 3.2 | [Amended By-Laws](e6725_ex3-2.htm) |
| 3.3 | [Articles of Merger by and between Clean Wind Energy Tower, Inc. and Superior Silver Mines, Inc.](e6725_ex3-3.htm) |
| 3.4 | [Certificate of Correction dated December 28, 2010](e6725_ex3-4.htm) |
| 3.5 | [Articles of Merger by and between Solar Wind Energy Tower Inc. and Clean Wind Energy Tower Inc. dated February 19, 2013](e6725_ex3-5.htm) |
| 3.6 | [Certificate of Change dated April 2, 2014](e6725_ex3-6.htm) |
| 3.7 | [Certificate of Change dated January 20, 2015](e6725_ex3-7.htm) |
| 3.8 | [Certificate of Designation – Series A Preferred Stock](e6725_ex3-8.htm) |
| 3.9 | [Certificate of Amendment dated June 5, 2015](e6725_ex3-9.htm) |
| 3.10 | [Certificate of Change dated September 14, 2015](e6725_ex3-10.htm) |
| 3.11 | [Certificate of Designation - Series AA Preferred Stock](e6725_ex3-11.htm) |
| 3.12 | [Certificate of Amendment dated December 24, 2020](e6725_ex3-12.htm) |
| 3.13 | [Certificate of Amendment dated December 28, 2020](e6725_ex3-13.htm) |
| 3.14 | [Certificate of Designtion Series AAA Preferred Stock](e6725_ex3-14.htm) |
| 3.15 | [Certificate of Amendment to Certificate of Designtion Series AAA Preferred Stock dated April 19, 2021](e6725_ex3-15.htm) |
| 3.16 | [Certificate of Designtion Series AAAA Preferred Stock](e6725_ex3-16.htm) |
| 3.17 | [Certificate of Amendment to Certificate of Designtion Series AAA Preferred Stock dated December 15, 2021](e6725_ex3-17.htm) |
| 3.18 | [Certificate of Amendment to Certificate of Designtion Series AAA Preferred Stock dated December 17, 2021](e6725_ex3-18.htm) |
| 3.19 | [Certificate of Amendment to Certificate of Designtion Series AAAA Preferred Stock dated May 23, 2022](e6725_ex3-19.htm) |
| 3.20 | [Certificate of Amendment to Certificate of Designtion Series AAAA Preferred Stock dated January 23, 2023](e6725_ex3-20.htm) |
| 3.21 | [Certificate of Amendment to Certificate of Designtion Series AAAA Preferred Stock dated January 26, 2023](e6725_ex3-21.htm) |
| 10.1 | [Executive Employment Agreement between Solar Wind Energy, Inc., Solar Wind Energy Tower, inc. and Ronald Pickett effective January 1, 2024](e6725_ex10-1.htm) |
| 10.2 | [Executive Employment Agreement between Solar Wind Energy, Inc., Solar Wind Energy Tower, inc. and Stephen Sadle effective January 1, 2024](e6725_ex10-2.htm) |

---

**KiNRG, INC.<br> INDEX TO THE FINANCIAL STATEMENTS**

---

| | |
|:---|:---|
| **Financial Statements for period ended December 31, 2024** |  |
| [Report of Independent Registered Public Accounting Firm](#a_001) | F-2 |
| [Consolidated Balance Sheets as of December 31, 2024 and 2023](#a_002) | F-4 |
| [Consolidated Statements of Operations for the years ended December 31, 2024 and 2023](#a_003) | F-5 |
| [Consolidated Statements of Stockholders' Deficit for the years ended December 31, 2024 and 2023](#a_004) | F-6 |
| [Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023](#a_005) | F-7 |
| [Notes to Consolidated Financial Statements](#a_006) | F-8 |
| **Financial Statements for the period ended March 31, 2025 (unaudited)** |  |
| [Consolidated Balance Sheet as of March 31, 2025](#a_007) | F-22 |
| [Consolidated Statement of Operations for the three months ended March 31, 2025 and 2024](#a_008) | F-23 |
| [Consolidated Statement of Changes in Stockholder's Deficit for the three months ended March 31, 2025](#a_009) | F-24 |
| [Consolidated Statement of Cash Flow for the three months ended March 31, 2025 and 2024](#a_010) | F-25 |
| [Consolidated Notes to the Financial Statements (unaudited)](#a_011) | F-26 |

---

![A blue and white logo AI-generated content may be incorrect.](image_001.jpg)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and <br> Stockholders of KiNRG, Inc. and subsidiary

**Opinion on the Financial Statements**

We have audited the accompanying consolidated balance sheets of KiNRG, Inc. and subsidiary (the Company) as of December 31, 2024 and 2023 and the related consolidated statements of operations, stockholders' deficit, and cash flows for the two years period then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its consolidated operations and its cash flows for each of the years in the two year period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

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

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 3 to the accompanying consolidated financial statements, the Company has not yet generated any significant revenue, has incurred recurring losses from operations, generated negative cash flows from operating activities and had an accumulated deficit that raises substantial doubt about the Company's ability to continue as a going concern. Management's evaluation of the events and conditions and management's plans in regarding these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

**Critical Audit Matter**

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

**Going Concern**

As discussed in Note 3, the Company has not yet generated any significant revenue, has incurred recurring losses from operations, generated negative cash flows from operating activities and had an accumulated deficit that raises substantial doubt about the Company's ability to continue as a going concern.

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

/s/ M&K CPAS, PLLC

We have served as the Company's auditor since 2022.

The Woodlands, Texas

March 18, 2025

**KiNRG, Inc.**

**CONSOLIDATED BALANCE SHEET**S

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2024** | **December 31,**<br>**2023** |
| ASSETS |  |  |
| Current assets: |  |  |
| Cash | $23099 | $317271 |
| Prepaid expenses | 12126 |  |
| Current assets - discontinued operations | 3909 | 7185 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 39134 | 324456 |
| Right of use asset, operating lease | 8525 | 8287 |
| Total assets | $47659 | $332743 |
| LIABILITIES AND STOCKHOLDERS' DEFICIT |  |  |
| Current liabilities: |  |  |
| Accounts payable | 18780 |  |
| Accrued liabilities - related parties | 100000 |  |
| Accrued payroll | 476981 | 293465 |
| Accrued interest | 121883 | 109883 |
| Lease liabilities - operating lease | 8525 | 8287 |
| Loans payable - related party | 250000 | 250000 |
| Notes payable | 80000 | 80000 |
| Other liabilities | 11511 | 11511 |
| Current liabilities - discontinued operations | 31265 | 48107 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 1098945 | 801253 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 1098945 | 801253 |
| Commitments and Contingencies |  |  |
| Stockholders' equity (deficit) |  |  |
| &nbsp;&nbsp;&nbsp;Preferred stock, par value $0.0001 per share; 10,000,000 shares authorized, 5,424,700 shares undesignated |  |  |
| &nbsp;&nbsp;&nbsp;Series A Convertible Preferred stock, par value $0.0001 per share, 500,000 shares designated, 0 shares issued and outstanding at December 31, 2024 and 2023 |  |  |
| &nbsp;&nbsp;&nbsp;Series AA Convertible Preferred stock, par value $0.0001 per share, 3,000,000 shares designated, 0 shares issued and outstanding at December 31, 2024 and 2023 |  |  |
| &nbsp;&nbsp;&nbsp;Series AAA Convertible Preferred stock, $0.0001 per share, 70,000 shares designated, 0 shares issued and outstanding at December 31, 2024 and 2023 |  |  |
| &nbsp;&nbsp;&nbsp;Series AAAA Convertible Preferred stock, $0.0001 per share, 1,005,300 shares designated, 0 shares issued and outstanding at December 31, 2024 and 2023 |  |  |
| &nbsp;&nbsp;&nbsp;Common stock, par value $0.0001, 250,000,000 shares authorized, 51,538,193 and 50,938,193 shares issued and outstanding at December 31, 2024 and 2023, respectively | 5154 | 5094 |
| &nbsp;&nbsp;&nbsp;Common stock to be issued, 2,657,550 shares at December 31, 2024 and 2023 | 265 | 265 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 25607397 | 24838202 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (26312700) | (24980758) |
| &nbsp;&nbsp;&nbsp;Stockholders' deficit attributable to KiNRG, Inc. | (699884) | (137197) |
| &nbsp;&nbsp;&nbsp;Non-controlling interest | (351402) | (331313) |
| Total stockholders' deficit | (1051286) | (468510) |
| Total liabilities and stockholders' equity | $47659 | $332743 |

---

See the accompanying notes to the consolidated financial statements.

**KiNRG, Inc.**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2024** | **2023** |
| Operating expenses: |  |  |
| Selling, general, and administrative expenses | $1205354 | $1075075 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 1205354 | 1075075 |
| Operating loss | (1205354) | (1075075) |
| Other expenses: |  |  |
| Impairment of deposit |  | (200000) |
| Interest expense | (42082) | (51781) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other expenses | (42082) | (251781) |
| Loss before provision for income taxes | (1247436) | (1326856) |
| Provision for income taxes |  |  |
| Net loss from continuing operations | (1247436) | (1326856) |
| Less: Net loss from non-controlling interest | (20089) | (125741) |
| Net loss attributable to KiNRG, continuing operations | (1227347) | (1201115) |
| Net loss from discontinued operations | (104595) | (717779) |
| Consolidated net loss | $(1331942) | $(1918894) |
| Net loss per common share from continuing operations, <br> basic and diluted | $(0.024) | $(0.028) |
| Net loss per common share from discontinued operations, <br> basic and diluted | $(0.002) | $(0.015) |
| Net loss per common share, basic and diluted | $(0.026) | $(0.043) |
| Weighted-average number of common shares outstanding, <br> basic and diluted | 51190679 | 47664479 |

---

See the accompanying notes to the consolidated financial statements.

**KiNRG, Inc.**

**CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT**

---

| | | | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Series A Preferred** | **Series A Preferred** | **Series AA Preferred** | **Series AA Preferred** | **Series AAA Preferred** | **Series AAA Preferred** | **Series AAAA Preferred** | **Series AAAA Preferred** | **Common Stock** | **Common Stock** | **Common Stock To Be Issued** | **Common Stock To Be Issued** | **Additional** | **Accumulated** | **Non-controlling** | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Paid-in Capital** | **Deficit** | **Interest** |<br>**Total** |
| **Balance, December 31, 2022** |  | $— |  | $— | 70000 | $7 | 1005300 | $100 | 47197553 | $4719 |  | $— | $22163746 | $(23061864) | $(205572) | $(1098864) |
| Vesting of compensatory warrants |  |  |  |  |  |  |  |  |  |  |  | **—** | 153578 |  |  | 153578 |
| Common stock sold for cash |  |  |  |  |  |  |  |  | 1407000 | 141 |  |  | 1406859 |  |  | 1407000 |
| Common stock issued for conversion of note payable |  |  |  |  |  |  |  |  | 250000 | 25 |  |  | 249975 |  |  | 250000 |
| Common stock issued for conversion of Series AAAA Pref |  |  |  |  |  |  | (413450) | (41) | 826650 | 83 |  | **—** | (42) |  |  |  |
| Common stock issued for cashless exercise of warrants |  |  |  |  |  |  |  |  | 495990 | 50 |  | **—** | (50) |  |  |  |
| Common stock issued to directors for conversion of fees |  |  |  |  |  |  |  |  | 250000 | 25 |  | **—** | 249975 |  |  | 250000 |
| Common stock issued to officers for conversion of salaries |  |  |  |  |  |  |  |  | 511000 | 51 |  | **—** | 510949 |  |  | 511000 |
| Common stock to be issued for cashless exercise of warrants |  |  |  |  |  |  |  |  |  |  | 710220 | 71 | (71) |  |  |  |
| Common stock to be issued for conversion of AAA Preferred |  |  |  |  | (70000) | (7) |  |  |  |  | 700000 | 70 | (63) |  |  |  |
| Common stock to be issued for conversion of AAAA Preferred |  |  |  |  |  |  | (591850) | (59) |  |  | 1183700 | 118 | (59) |  |  |  |
| Common stock to be issued for services |  |  |  |  |  |  |  |  |  |  | 63630 | 6 | 63624 |  |  | 63630 |
| Imputed interest on related party loans |  |  |  |  |  |  |  |  |  |  |  | **—** | 39781 |  |  | 39781 |
| Net loss for the twelve months ended December 31, 2023 |  |  |  |  |  |  |  |  |  |  |  | **—** |  | (1918894) | (125741) | (2044635) |
| **Balance, December 31, 2023** |  | $— |  | $— |  | $— |  | $— | 50938193 | $5094 | 2657550 | $265 | $24838202 | $(24980758) | $(331313) | $(468510) |
| Vesting of compensatory warrants |  |  |  |  |  |  |  |  |  |  |  |  | 139173 |  |  | 139173 |
| Common stock sold for cash |  |  |  |  |  |  |  |  | 600000 | 60 |  |  | 599940 |  |  | 600000 |
| Imputed interest on related party loans |  |  |  |  |  |  |  |  |  |  |  |  | 30082 |  |  | 30082 |
| Net loss for the twelve months ended December 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  | (1331942) | (20089) | (1352031) |
| **Balance, December 31, 2024** |  | $— |  | $— |  | $— |  | $— | 51538193 | $5154 | 2657550 | $265 | $25607397 | $(26312700) | $(351402) | $(1051286) |

---

See the accompanying notes to the consolidated financial statements.

**KiNRG, Inc.**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

---

| | | |
|:---|:---|:---|
| <br>**CASH FLOWS FROM OPERATING ACTIVITIES** | **For the**<br>**Year Ended**<br>**December 31,**<br>**2024** | **For the**<br>**Year Ended**<br>**December 31,**<br>**2023** |
| Net loss | $(1352031) | $(2044635) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Stock based compensation | 139173 | 217208 |
| &nbsp;&nbsp;&nbsp;Impairment of long-term deposit |  | 200000 |
| &nbsp;&nbsp;&nbsp;Imputed interest on loans payable | 30082 | 39781 |
| Changes in current assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Prepaid assets | (12126) |  |
| &nbsp;&nbsp;&nbsp;Right-of-use asset | 9892 | 9611 |
| &nbsp;&nbsp;&nbsp;Accounts payable | 18781 | (18633) |
| &nbsp;&nbsp;&nbsp;Accrued liabilities – related parties | 100000 |  |
| &nbsp;&nbsp;&nbsp;Accrued interest | 12000 | 12000 |
| &nbsp;&nbsp;&nbsp;Accrued payroll | 183516 | 432133 |
| &nbsp;&nbsp;&nbsp;Other liabilities | (16842) | 6670 |
| &nbsp;&nbsp;&nbsp;Operating lease liability | (9892) | (9611) |
| Net cash used in operating activities | (897448) | (1155476) |
| **CASH FLOWS FROM INVESTING ACTIVITIES** |  |  |
| **CASH FLOWS FROM FINANCING ACTIVITIES** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from sale of common stock | 600000 | 1407000 |
| Net cash provided by financing activities | 600000 | 1407000 |
| Net increase (decrease) in cash and cash equivalents | (297448) | 251524 |
| Cash and cash equivalents at beginning of period | 324456 | 72932 |
| Cash and cash equivalents at end of period | $27008 | $324456 |
| Cash and cash equivalents at end of period - continuing operations | $23099 | $317271 |
| Cash and cash equivalents at end of period - discontinued operations | $3909 | $7185 |
| **SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:** |  |  |
| Interest paid | $— | $— |
| Income taxes paid | $— | $— |
| **NON-CASH INVESTING AND FINANCING ACTIVITIES:** |  |  |
| Establish right-of-use asset and liability | $10130 | $9847 |
| Common stock issued for conversion of loan payable | $— | $250000 |
| Common stock issued for conversion of Series AAAA Preferred Stock | $— | $83 |
| Common stock issued for cashless exercise of warrants | $— | $50 |
| Common stock issued to directors for conversion of fees | $— | $250000 |
| Common stock issued to officers for conversion of salaries | $— | $511000 |
| Common stock to be issued for cashless exercise of warrants | $— | $71 |
| Common stock to be issued for conversion of AAA Preferred Stock | $— | $63 |
| Common stock to be issued for conversion of AAAA Preferred Stock | $— | $59 |

---

See the accompanying notes to the consolidated financial statements.

**KiNRG, Inc.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**December 31, 2024 and 2023**

**NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** 

<u>Description of Business</u>

KiNRG, Inc. is a green energy company. Our core objective and focus is to become a leading provider of clean efficient green energy to the world communities at a reasonable cost without the destructive residuals of fossil fuel, while continuing to generate innovative technological solutions for today and tomorrow's electrical power needs. KiNRG has, designed, engineered, developed and is preparing to construct large "Downdraft Energy Towers" that use benevolent, non-toxic natural elements to generate electricity economically by integrating and synthesizing numerous proven as well as emerging technologies. In addition to constructing Downdraft Energy Towers in the United States and abroad, the Company intends to establish partnerships at home and abroad to propagate these systems and meet increasing global demand for electricity. We have assembled a team of experienced business professionals, engineering, and scientific consultants with the proven ability to bring the idea to market. KiNRG has filed and been issued patents that the Company believes will further enhance this potentially revolutionary technology. KiNRG is based in Annapolis, MD.

<u>Basis of Presentation</u>

The accompanying consolidated financial statements present on a consolidated basis the accounts of the Company and subsidiaries. The Company presents noncontrolling interest within the equity section of its consolidated balance sheets and the amount of consolidated net income (loss) that is attributable to the Company and to the noncontrolling interest in its consolidated statement of operations. All significant intercompany accounts and transactions have been eliminated in consolidation.

<u>Discontinued Operations</u>

Pursuant to the guidance of Accounts Standards Codification ("ASC") 205-20, *Presentation of Financial Statements* – *Discontinued Operations,* the accounts of our discontinued entity Arizona Green Power ("AGP") have been included in "Net loss from discontinued operations" in our consolidated statements of operations until such time as the entity is sold. Additionally, the assets and liabilities of this entity have been presented as discontinued operations in our consolidated balance sheets. The Company expects to complete the sale of AGP in the first quarter of 2025. See Note 2.

<u>Reclassifications</u>

Certain amounts presented in the financial statements of the prior period have been reclassified to conform with the current period presentation of discontinued operations. See Note 2.

<u>Fair Value of Financial Instruments</u>

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification ("Paragraph 820-10-35-37") to measure the fair value of its financial instruments. Paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a framework for measuring fair value in generally accepted accounting principles (GAAP) and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by paragraph 820-10-35-37 of the FASB Accounting Standards Codification are described below:

---

| | |
|:---|:---|
| Level 1 | Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. |
| Level 2 | Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. |
| Level 3 | Pricing inputs that are generally observable inputs and not corroborated by market data. |

---

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

Our short-term financial instruments, including cash, other assets, and accounts payable and accrued expenses consist primarily of instruments without extended maturities, the fair value of which, based on management's estimates, reasonably approximate their book value. The fair value of our notes and advances payable is based on management estimates and reasonably approximates their book value based on their current maturity.

<u>Use of Estimates</u>

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the recoverability and useful lives of long-lived assets, the fair value of the Company's stock, stock-based compensation, and the valuation allowance related to deferred tax assets. Actual results may differ from these estimates.

<u>Long-Lived Assets</u>

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with Topic ASC 360, "Property, Plant and Equipment". Recoverability is measured by comparison of the carrying amount to the future net cash flows which the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the projected discounted future cash flows arising from the asset using a discount rate determined by management to be commensurate with the risk inherent to our current business model. During the year ended December 31, 2023, the Company determined that a long-term deposit on land in the amount of $200,000 was unlikely to be recovered, and recorded an impairment on this asset in the amount of $200,000.

<u>Net Loss per Common Share</u>

The Company computes net loss per share under Accounting Standards Codification subtopic 260-10, Earnings Per Share ("ASC 260-10"). Basic net income (loss) per common share is computed by dividing net loss by the weighted average number of shares of common stock. Diluted net loss per share is computed using the weighted average number of common and common stock equivalent shares outstanding during the period. There is no effect on diluted loss per share since the common stock equivalents are anti-dilutive. Dilutive common stock equivalents consist of shares issuable but not yet issued by the Company's transfer agent, shares issuable upon conversion of convertible preferred stock, and shares issuable upon the exercise of warrants. Fully diluted shares as of December 31, 2024 and 2023 were 55,335,743 and 54,735,743, respectively.

<u>Revenue Recognition</u>

The Company has generated no revenues to date. It is the Company's policy that revenue from product sales or services will be recognized in accordance with Financial Accounting Standards Board "FASB" Accounting Standards Codification "ASC" 606. A five-step analysis must be met as outlined in Topic 606: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations, and (v) recognize revenue when (or as) performance obligations are satisfied. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded.

<u>Stock Based Compensation</u>

We recognize the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation cost for stock options are estimated at the grant date based on each option's fair-value as calculated by the Black-Scholes-Merton ("BSM") option-pricing model. Share-based compensation arrangements may include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant.

<u>Income Taxes</u>

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of items that have been included or excluded in the financial statements or tax returns. Deferred tax assets and liabilities are determined on the basis of the difference between the tax basis of assets and liabilities and their respective financial reporting amounts ("temporary differences") at enacted tax rates in effect for the years in which the temporary differences are expected to reverse.

The Company adopted the provisions of Accounting Standards Codification ("ASC") Topic 740-10, which prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

Management has evaluated and concluded that there were no material uncertain tax positions requiring recognition in the Company's consolidated financial statements as of December 31, 2024 and 2023. The Company does not expect any significant changes in its unrecognized tax benefits within twelve months of the reporting date.

The Company's policy is to classify assessments, if any, for tax related interest as interest expense and penalties as general and administrative expenses in the consolidated statements of operations.

<u>Advertising costs</u>

All costs associated with advertising and promotion are expensed as incurred. Total recognized advertising and promotion expenses were $0 and $31,926 for the years ended December 31, 2024 and 2023, respectively.

<u>Research and development</u>

In accordance with ASC 730, "Research and Development", the Company expenses all research and development costs as incurred. The Company had incurred $0 of research and development costs for the years ended December 31, 2024 and 2023. The company expects the research and development costs to increase in the future as it continues to invest in the infrastructure that is critical to achieve our business goals and objectives.

<u>Cash and cash equivalents</u>

For purposes of the statement of cash flows, cash and cash equivalents includes demand deposits, saving accounts and money market accounts. The Company considers all highly liquid debt instruments with maturities of three months or less when purchased to be cash and cash equivalents. As of December 31, 2024 and 2023, the Company did not have cash in excess of the $250,000 FDIC insured amount.

<u>Related parties</u>

The Company follows the ASC 850-10 Related Party for the identification of related parties and disclosure of related party transactions.

Pursuant to section 850-10-20 the related parties include a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of section 825–10–15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and Income-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The consolidated financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d) amount due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

<u>Commitments and contingencies</u>

The Company follows the ASC 450-20, Commitments to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company's consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company's financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company's business, financial position, and results of operations or cash flows.

<u>Recently Issued Accounting Pronouncements</u>

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). This ASU requires measurement and recognition of expected credit losses for financial assets. ASU 2016-13 also requires new disclosures for financial assets measured at amortized cost, loans and available-for-sale debt securities. Entities will apply the standard's provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. This guidance became effective for us on January 1, 2023. Adoption of this guidance did not have a material effect on our financial statements.

In November 2023, the FASB issued ASU 2023-07, *Segment Reporting* (Topic 280): *Improvements to Reportable Segment Disclosures*. The amended guidance requires incremental reportable segment disclosures, primarily about significant segment expenses. The amendments also require entities with a single reportable segment to provide all disclosures required by these amendments, and all existing segment disclosures. The amendments will be applied retrospectively to all prior periods presented in the financial statements and is effective for fiscal years beginning after December 15, 2023, and interim periods in fiscal years beginning after December 15, 2024, with early adoption permitted. We adopted this guidance on January 1, 2024 and have included it in our annual disclosures; however, it did not impact our financial condition, results of operations, or cash flows. For additional information, see "Note 15—Segment Information."

<u>Accounting Standards Issued, Not Adopted</u>

In November 2024, the FASB issued Accounting Standard Update No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"). This standard requires additional disclosures over certain expenses, including purchases of inventory, employee compensation, depreciation, intangible asset amortization, and other specific expense categories. This standard also requires disclosure of the total amount of selling expenses and the Company's definition of selling expenses. This update is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. We are evaluating the impact this update will have on our annual disclosures; however, we do not anticipate a material impact to our financial condition, results of operations, or cash flows.

**NOTE 2: DISCONTINUED OPERATIONS**

From November 17, 2015 through December 31, 2023, through its subsidiary Arizona Green Power ("AGP"), the Company had entered into an agreement (the "Land Option Agreement"), and a series of amendments to said agreement, to purchase land in Arizona. The Land Option Agreement expired in March 2024. With the expiration of the Land Option Agreement, the Company has made the strategic decision to divest itself from AGP.

The following information presents the major classes of line item of assets and liabilities included as part of discontinued operations in the consolidated balance sheets:

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2024** | **December 31,**<br>**2023** |
| Current assets - discontinued operations: |  |  |
| Cash | $3909 | $7185 |
| Total current assets - discontinued operations | $3909 | $7185 |
| Current liabilities - discontinued operations: |  |  |
| Other liabilities | 31265 | 48107 |
| Total current liabilities - discontinued operations | $31265 | $48107 |

---

The following information presents the major classes of line items constituting the after-tax loss from discontinued operations in the consolidated statements of operations:

---

| | | |
|:---|:---|:---|
|  | **Twelve Months Ended** | **Twelve Months Ended** |
|  | **December 31,** | **December 31,** |
|  | **2024** | **2023** |
| Selling, general, and administrative expenses | 104595 | 717779 |
| Loss from discontinued operations, net of tax | $104595 | $717779 |

---

The following information presents the significant operating cash flow activities in the consolidated statements of cash flows relating to discontinued operations:

---

| | | |
|:---|:---|:---|
|  | **Twelve Months Ended** | **Twelve Months Ended** |
|  | **December 31,** | **December 31,** |
|  | **2024** | **2023** |
| Operating activities of discontinued operations |  |  |
| Net loss from discontinued operations | $(104595) | $(717779) |
| Changes in current assets and liabilities: |  |  |
| Other liabilities | (16844) | 6670 |

---

**NOTE 3: GOING CONCERN** 

For the years ended December 31, 2024 and 2023, the Company incurred a net loss from continuing operations of $1,247,436 and $1,326,856, respectively, and has an accumulated deficit of $26,312,700 as of December 31, 2024. At December 31, 2024, we have a working capital deficit of $1,059,811, compared to $476,797 at December 31, 2023.

The Company has been dependent on raising capital through debt and equity financings to meet its needs for cash used in operating and investing activities. During 2024, the Company received proceeds of $600,000 from the sale of common stock. Until the Company can generate positive cash from operations, it will need to raise additional funding to meet its liquidity needs and to execute its business strategy. As in the past, the Company will seek debt and/or equity financing, which may not be available on reasonable terms, if at all.

The Company's audited consolidated financial statements for the year ended December 31, 2024 and 2023 were prepared under the assumption that it would continue operations as a going concern. However, the report of the Company's independent registered public accounting firm that accompanies the Company's consolidated financial statements for the year ended December 31, 2023 contains a qualification in which such firm expressed substantial doubt about the Company's ability to continue as a going concern.

**NOTE 4: RIGHT-OF-USE ASSETS AND LEASE LIABILITIES** – **OPERATING LEASES**

The Company has operating leases for offices. The Company adopted Topic 842, using the modified-retrospective approach as discussed in Note 3, and as a result, recognized a right-of-use asset and a lease liability. The Company uses a 12% rate to determine the present value of the lease payments. The Company's leases have remaining lease terms of less than 1 year.

The Company's lease expense was entirely comprised of operating leases. Lease expense for the years ended December 31, 2024 and 2023 amounted to $10,550 and $10,250, respectively.

The Company's ROU asset amortization for the years ended December 31, 2024 and 2023 was $9,893 and $9,611, respectively. The difference between the lease expense and the associated ROU asset amortization consists of interest.

Right of use assets – operating leases are summarized below:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2023** |
| Office | $8525 | $8287 |
| Right of use assets, net | $8525 | $8287 |

---

Operating lease liabilities are summarized below:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2023** |
| Office | $8525 | $8287 |
| Lease liability | 8525 | 8287 |
| Less: current portion | (8525) | (8287) |
| Lease liability, non-current | $— | $— |

---

Maturity analysis under these lease agreements are as follows:

---

| | |
|:---|:---|
| For the year ended December 31, 2025 | $9000 |
| Less: Present value discount | (475) |
| Lease liability | $8525 |

---

**NOTE 5: DEPOSITS**

Long-term deposits consisted of a $200,000 deposit to acquire approximately 640 acres of land in Yuma County, Arizona originally priced at $46,500 per acre (the "Land Option Agreement"). The Company had entered into a series of amendments to the Land Option Agreement from November 17, 2015 through December 31, 2023. This deposit was determined to be unrecoverable, and an impairment in the amount of $200,000 was recorded during the year ended December 31, 2023.

On July 1, 2022, the Company entered into a ninth amendment to the Amended Land Option Agreement (the "Ninth Amendment") whereby the Company extended the term of the agreement through December 31, 2022 with the payment of non-refundable option fees in the amount of $12,500 per month, in advance; through June 30, 2023 with the payment of a $500,000 extension fee by December 30, 2022 (the "December 2022 Extension Payment"); and through December 31, 2023 with the payment of a $500,000 extension fee by June 30, 2023 (the "June 2023 Extension Payment). The December 2022 Extension Payment and June 20203 Extension Payment are non-refundable but will be applicable to the purchase price if and when the option agreement is exercised. The Land Option Agreement was deemed extended through June 2022 with the execution of the Ninth Amendment. The Company extended the term through August 2022 with a payment in the amount of $12,500 on July 22, 2022, through September 2022 with a payment in the amount of $12,500 on August 29, 2022, through October 2022 with a payment in the amount of $12,500 on September 27, 2022, through November 2022 with a payment in the amount of $12,500 on October 28, 2022, through December 2022 with a payment in the amount of $12,500 on November 29, 2022, through June 2023 with a payment in the amount of $500,000 on December 28, 2022; and through December 2023 with payments of $250,000 on June 30, 2023 and September 30, 2023. Pursuant to the Ninth Amendment, the purchase price of the Property was increased to $55,000 per acre if the sale closed before June 30, 2023, or $62,500 per acre thereafter.

On July 1, 2023, the Company entered into the tenth amendment to the Amended Land Option Agreement (the "Tenth Amendment"). Pursuant to the Tenth Amendment, the purchase price of the Property was increased to $58,750 per acre if the sale closed before September 30, 2023, or $62,500 per acre thereafter.

On September 26, 2023, the Company entered into the eleventh amendment to the Amended Land Option Agreement (the "Eleventh Amendment"). Pursuant to the Eleventh Amendment, the purchase price of the Property was changed to $58,750 per acre if the sale closed before October 31, 2023; $61,250 per acre if the sale closed between November 1, 2023 and November 30, 2023, and $62,500 per acre if the sale closed between December 1, 2023 and December 31, 2023.

On December 28, 2023, the Company entered into the twelfth amendment to the Amended Land Option Agreement (the "Twelfth Amendment"). Pursuant to the Twelfth Amendment, the Company extended the term of the agreement to February 29, 2024, with a payment in the amount of $150,000 on December 31, 2023. The Twelfth Amendment also established the purchase price of the Property to be $62,500 per acre. In addition, pursuant to the Twelfth Amendment, if the Company does not close on the purchase of the Property on or before February 29, 2024, the Company will have no further rights to acquire the property and the Option Agreement will terminate. The Company has in place a verbal agreement with the land owner to extend the terms of the agreement should we conclude a closing commitment. There is no assurance that the Company will be successful in concluding a satisfactory closing commitment.

During the years ended December 31, 2024 and 2023, the Company charged to operations the amount of $0 and $650,000, respectively, in connection with the Land Option Agreement.

On December 31, 2023, the Company recorded an impairment of the deposit on the land in the amount of $200,000. The Land Option Agreement expired on March 1, 2024.

**NOTE 6: ACCRUED LIABILITIES - RELATED PARTIES**

Accrued liabilities and expenses as of December 31, 2024 and 2023 consist of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2023** |
| Board of Director fees | $100000 | $— |
| Total | $100000 | $— |

---

During the year ended December 31, 2024, the Company accrued fees due to the Board of Directors in the amount of $100,000. During the year ended December 31, 2023, the Company accrued fees due to the Board of Directors in the amount of $100,000 and converted accrued fees due to the Board of Directors in the amount of $250,000 into 250,000 shares of the Company's common stock. There was no gain or loss recorded on this transaction as the conversion occurred at the fair value price of $1.00 per share.

**NOTE 7: ACCRUED PAYROLL**

Accrued payroll as of December 31, 2024 and 2023 consist of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2023** |
| Accrued payroll | $463274 | $292158 |
| Accrued payroll taxes | 13707 | 1307 |
| Total | $476981 | $293465 |

---

*Activity during the year ended December 31, 2024*

 

The Company accrued salaries in the amount of $435,000 and made payments of $263,885. The Company accrued payroll taxes in the amount of $103,598 and made payments of $91,198.

*Activity during the year ended December 31, 2023*

The Company accrued salaries in the amount of $435,000, made payments of accrued salaries in the amount of $93,538, and converted accrued salaries due to officers in the amount of $511,000 into 511,000 shares of the Company's common stock. There was no gain or loss recorded on this transaction as the conversion occurred at the fair value price of $1.00 per share.

The Company accrued payroll taxes in the amount of $33,208 and made payments of $37,351.

**NOTE 8: NOTES PAYABLE IN DEFAULT**

Notes payable as of December 31, 2024 and 2023 consist of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2023** |
| Note payable issued April 7, 2014 | $80000 | $80000 |
| Total | 80000 | 80000 |
| Less current portion | (80000) | (80000) |
| Long term portion | $— | $— |

---

On April 7, 2014, Arizona Green Power, LLC, a majority owned subsidiary of the Company, issued a note payable for $80,000 with interest at 10% per annum with a 15% default rate of interest, due at maturity of April 6, 2016. In connection with the issuance of the note, the Company granted i) a 1.33% ownership interest in Arizona Green Power, LLC and ii) a warrant to purchase 4,800 shares of the Company's common stock exercisable at $2.00 per share. This warrant expired on March 7, 2016. During each of the years ended December 31, 2024 and 2023, the Company accrued interest in the amount of $12,000 on this note. As of December 31, 2024, the amount of principal and accrued interest due on this note is $80,000 and $121,883, respectively. As of December 31, 2023, the amount of principal and accrued interest due on this note is $80,000 and $109,883, respectively. This note is in default as of the filing date.

**NOTE 9: LOANS PAYABLE – RELATED PARTIES**

On December 28, 2022, the Company received a non-interest bearing loan in the amount of $250,000 from a related party ("2022 Loan 1"). The Company imputed interest at a rate of 12% per annum, and charged interest expense in the amount of $30,082 and $20,000 to additional paid-in capital pursuant to 2022 Loan 1 during the years ended December 31, 2024 and 2023, respectively. Principal in the amount of $250,000 is due under 2022 Loan 1 at December 31, 2024 and 2023, respectively.

On December 28, 2022, the Company received a non-interest bearing loan in the amount of $250,000 from a related party ("2022 Loan 2"). The Company imputed interest at a rate of 8% per annum, and charged interest expense in the amount of $0 and $19,781 to additional paid-in capital pursuant to 2022 Loan 2 during the years ended December 31, 2024 and 2023, respectively. On December 28, 2023, principal in the amount of $250,000 due under 2022 Loan 2 was converted to 250,000 shares of common stock of the Company at a price of $1.00 per share. There was no gain or loss recorded on this transaction as the conversion occurred at the fair value of the common stock. Principal in the amount of $0 is due under 2022 Loan 1 at December 31, 2024 and 2023, respectively.

**NOTE 10: COMMITMENTS AND CONTINGENCIES**

*Lease Obligations*

The Company leases an office at 1213 Culbreth Drive, Suite 103, Wilmington, North Carolina 28405, on an annual lease. Rental expenses charged to operations for the years ended December 31, 2024 and 2023 were $10,550 and $10,250, respectively.

*Employment and Consulting Agreements*

The Company has employment agreements with certain of its key employees which include non-disclosure and confidentiality provisions for protection of the Company's proprietary information.

The Company has consulting agreements with outside contractors to provide marketing and financial advisory services. The Agreements are generally for a term of 12 months from inception and renewable automatically from year to year unless either the Company or Consultant terminates such engagement by written notice.

On December 29, 2010, pursuant to the Merger, Solar Wind Energy, Inc. became a wholly-owned subsidiary of the Company. Solar Wind has employment agreements with its executive officers. Each of the employment agreements was entered into on September 22, 2010 and amended on November 22, 2010. On March 30, 2023, the Board of Directors approved the contracts of its President and of its Chief Operating Officer through December 31, 2023. Any unpaid salaries are accrued and included in Accrued Payroll on the balance sheet. See Note 7.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Name** | **Position(s)** | **Term** | **Salary** | **Bonus** | **Severance** |
| Ronald W. Pickett | President, Chief Executive Officer | 3 years; renewable for 1 year on mutual consent | $200000 | Board Discretionary | Twelve (12) month salary and benefits for termination without cause. |
| Stephen Sadle | Chief Operating Officer | 3 years; renewable for 1 year on mutual consent | $175000 | Board Discretionary | Twelve (12) month salary and benefits for termination without cause. |
| Robert Crabb | Secretary | 1 year | $60000 | Board Discretionary | N/A |

---

Terms to modify the one-year contract extension by mutual consent have been agreed to by the Officers and Directors. Under the modification and extension, the contracts will be extended for an additional 4 years with current salaries being unchanged. Provisions for automatic salary increases based on specific events related to business development successes, rights for the officers to convert any accrued salary into Company notes, and rights to receive warrants to purchase Company stock at market plus 20% premium at the time of the grant while notes are outstanding will be incorporated in the new contracts. The parties have mutually agreed to a stock option plan, the specific terms to be negotiated as part of the final contract.

*Litigation*

From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are not aware of any such legal proceedings that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results.

**NOTE 11: STOCKHOLDERS' DEFICIT**

<u>Preferred stock</u>

The Company has authorized 10,000,000 shares of preferred stock, with a par value of $0.0001 per share. As of December 31, 2024 and 2023, the Company had 0 shares of preferred stock issued and outstanding.

Series A Convertible Preferred Stock:

On June 2, 2015, the Company designated 500,000 as Series A Convertible Preferred Stock ("Series A preferred") at $0.0001 par value. Each Series A preferred share i) shall rank senior in regard to dividend rights, rights of redemption and liquidation to all classes of common stock and any class or series of capital stock of the Company hereafter creates, ii) receive dividends if and when declared by the Company's board of directors, iii) each share of Series A preferred convertible into 0.386 shares of common and iv) each share of Series A preferred stock is entitled to 8,000 votes for each share of common stock into which Series A preferred could then be converted.

*Series A Convertible Preferred Stock transactions during the year ended December 31, 2024*

 

None.

*Series A Convertible Preferred Stock transactions during the year ended December 31, 2023*

 

None.

At December 31, 2024 and 2023, there are no shares of Series A Convertible Preferred Stock outstanding.

Series AA Convertible Preferred Stock:

On December 17, 2020, the Company designated 3,000,000 shares of Series AA Convertible Preferred stock (the "Series AA Preferred"), par value $0.0001, with a stated value of $1.00 per share. Each share of the Series AA Preferred is convertible to common stock at a rate of $0.40 per share, and will have voting rights on an as-converted basis. There are no provisions for coupons or any conversion terms into any form of debt or repayment in cash and therefore these series AA convertible preferred stock is classified as equity accounts.

*Series AA Convertible Preferred Stock transactions during the year ended December 31, 2024*

 

None.

*Series AA Convertible Preferred Stock transactions during the year ended December 31, 2023*

 

None.

At December 31, 2024 and 2023, there were no shares of Series AA Convertible Preferred Stock outstanding.

Series AAA Convertible Preferred Stock:

On March 31, 2021, the Company designated 70,000 shares of Series AAA Convertible Preferred Stock (the "Series AAA Preferred"), par value $0.0001, with a stated value of $1.00 per share. Each share of the Series AAA Preferred is convertible into ten shares of common stock and will have voting rights on an as-converted basis. There are no provisions for coupons or any conversion terms into any form of debt or repayment in cash and therefore the series AAA convertible preferred stock is classified as equity.

*Series AAA Convertible Preferred Stock transactions during the year ended December 31, 2024*

 

None.

*Series AAA Convertible Preferred Stock transactions during the year ended December 31, 2023*

 

On December 31, 2023, the Company converted 70,000 shares of Series AAA Convertible Preferred Stock at a price of $0.10 per share into 700,000 shares of the Company's common stock. There was no gain or loss recorded on this transaction as the conversion occurred pursuant to the terms of the Series AAA Preferred.

At December 31, 2024 and 2023, there were 0 shares of Series AAA Convertible Preferred Stock outstanding, respectively.

Series AAAA Convertible Preferred Stock:

On September 30, 2021, the Company designated 500,000 shares of Series AAAA Convertible Preferred Stock (the "Series AAAA Preferred"), par value $0.0001, with a stated value of $1.00 per share. On May 24, 2022, the Company designated an additional 500,000 shares of Series AAA Preferred. Each share of the Series AAAA Preferred is convertible into two shares of common stock, and will have voting rights on an as-converted basis. On May 24, 2022, the Company increased the number of shares designated as Series AAAA Preferred to 1,000,000. Thereafter, the Company further increased the number of shares designated as Series AAAA Preferred bringing the total to 1,005,300. There are no provisions for coupons or any conversion terms into any form of debt or repayment in cash and therefore the series AAAA convertible preferred stock is classified as equity.

*Series AAAA Convertible Preferred Stock transactions during the year ended December 31, 2024*

 

None.

 

*Series AAAA Convertible Preferred Stock transactions during the year ended December 31, 2023*

 

The Company converted 413,450 shares of Series AAAA Preferred into 826,650 shares of the Company's common stock. There was no gain or loss recorded on this transaction as the conversion occurred pursuant to the terms of the Series AAAA Preferred.

The Company converted 591,850 shares of Series AAA Preferred into 1,183,700 shares of common stock which have not been issued as of December 31, 2024. There was no gain or loss recorded on this transaction as the conversion occurred pursuant to the terms of the Series AAA Preferred.

At December 31, 2024 and 2023, there were 0 shares of Series AAAA Convertible Preferred Stock outstanding, respectively.

<u>Common Stock</u>

*Common stock transactions during the year ended December 31, 2024*

The Company sold 600,000 shares of common stock at a price of $1.00 per share.

*Common stock transactions during the year ended December 31, 2023*

 

The Company sold 1,407,000 shares of common stock at a price of $1.00 per share.

The Company issued 250,000 shares of common stock at a price of $1.00 per share to a related party for the conversion of a note payable in the amount of $250,000. There was no gain or loss on this transaction as it was made pursuant to the terms of the convertible note agreement.

The Company issued 826,650 shares of common stock at a price of $0.50 per share for the conversion of 413,450 shares of Series AAAA Preferred Stock. There was no gain or loss recorded on this transaction as the conversion occurred pursuant to the terms of the Series AAAA Preferred.

The Company issued 495,990 shares of commons stock at a price of $0.60 per share for the cashless exercise of 1,240,350 warrants. There was no gain or loss recorded on this transaction as the conversion occurred pursuant to the terms of the warrants.

The Company issued 250,000 shares of common stock at a price of $1.00 per share to Directors for the conversion of director's fees in the amount of $250,000. There was no gain or loss recorded on this transaction as the conversion occurred at the market price at the time of the conversion.

The Company issued 511,000 shares of common stock at a price of $1.00 per share to Officers for the conversion of accrued salary in the amount of $511,000. There was no gain or loss recorded on this transaction as the conversion occurred at the market price at the time of the conversion.

<u>Common Stock to be Issued</u>

*Common stock to be issued transactions during the year ended December 31, 2024*

None.

*Common stock to be issued transactions during the year ended December 31, 2023*

The Company has committed to issue 710,220 shares at a price of $0.50 per share for the cashless conversion of 1,775,550 warrants. There was no gain or loss recorded on this transaction as the conversion occurred pursuant to the terms of the warrants.

The Company has committed to issue 700,000 shares of common stock at a price of $0.10 per share for the conversion of Series AAA Preferred Stock. There was no gain or loss recorded on this transaction as the conversion occurred pursuant to the terms of the Series AAA Preferred.

The Company has committed to issue 1,183,700 shares of common stock at a price of $0.50 per share for the conversion of 591,850 shares of Series AAAA Preferred Stock. There was no gain or loss recorded on this transaction as the conversion occurred pursuant to the terms of the Series AAAA Preferred.

The Company has committed to issue 63,630 shares of common stock at a price of $1.00 per share to a related party as compensation. There was no gain or loss recorded on this transaction as the transaction was recorded at the market price of the common stock.

<u>Warrants</u>

During the years ended December 31, 2024 and 2023, a total of $139,173 and $153,578, respectively, was charged to operations for the amortization of warrants.

*Warrant Activity for the Year Ended December 31, 2024*

 

None.

*Warrant Activity for the Year Ended December 31, 2023*

 

During the year ended December 31, 2023, warrants to purchase 15,000 shares of common stock at a price of $1.05 and a term of 5 years were issued to a consultant. These warrants vested upon issuance.

During the year ended December 31, 2023, 700,000 warrants with an exercise price of $0.60 per share expired.

During the year ended December 31, 2023, 1,240,350 warrants with an exercise price of $0.60 per share were exercised in cashless conversions for a total of 495,990 shares of common stock.

During the year ended December 31, 2023, 1,775,550 warrants with an exercise price of $0.60 per share were exercised in cashless conversions for a total of 710,220 shares of common stock to be issued.

The following table summarizes the warrants outstanding and the related prices for the warrants to purchase shares of the Company's common stock issued by the Company as of December 31, 2024:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|<br><br>**Range of**<br>**exercise**<br>**prices** |<br><br>**Number of**<br>**warrants**<br>**outstanding** |<br>**Weighted**<br>**average**<br>**remaining**<br>**contractual**<br>**life (years)** | **Weighted**<br>**average**<br>**exercise**<br>**price of**<br>**outstanding**<br>**warrants** |<br><br>**Number of**<br>**warrants**<br>**exercisable** | **Weighted**<br>**average**<br>**exercise**<br>**price of**<br>**exercisable**<br>**warrants** |
| $0.40 | 1125000 | 1.00 | $0.40 | 750000 | $0.40 |
| $1.05 | 15000 | 2.50 | $1.05 | 15000 | $1.05 |
|  | 1140000 | 1.02 | $0.41 | 765000 | 0.41 |

---

Transactions involving warrants are summarized as follows:

---

| | | |
|:---|:---|:---|
| | **Number of Shares** | **Weighted Average**<br>**Exercise Price** |
| Warrants outstanding at December 31, 2022 | 4840900 | $0.55 |
| Issued | 15000 | 1.05 |
| Exercised | (3015900) | 0.60 |
| Cancelled/Expired | (700000) | 0.60 |
| Warrants outstanding at December 31, 2023 | 1140000 | $0.41 |
| Issued |  |  |
| Exercised |  |  |
| Cancelled/Expired |  |  |
| Warrants outstanding at December 31, 2024 | 1140000 | $0.41 |

---

<u>Incentive Stock Plan</u>

On February 18, 2021, the Company's board of directors approved an incentive stock plan (the "2021 Incentive Stock Plan") in order to provide additional incentive to employees, directors, and consultants. The 2021 Incentive Stock Plan permits the grant of Incentive Stock Options, Non-statutory Stock Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights, Performance Units and Performance Shares. The maximum number of aggregate shares available for issuance under the 2021 Incentive Stock Plan is 4,000,000. At December 31, 2024 and 2023, no shares have been issued pursuant to the 2021 Incentive Stock Plan.

**NOTE 12: NON-CONTROLLING INTEREST**

At December 31, 2024 and 2023, the Company's ownership interest in AGP was 82.77%, and minority interest was 17.23%.

A reconciliation of the non-controlling loss attributable to the Company:

Net loss attributable to non-controlling interest for the three months ended December 31, 2024:

---

| | |
|:---|:---|
| Net loss generated by AGP | $116595 |
| Non-controlling interest percentage | 17.23% |
| Net loss attributable to non-controlling interest | $20089 |

---

Net loss attributable to non-controlling interest for the year ended December 31, 2023:

---

| | |
|:---|:---|
| Net loss generated by AGP | $729779 |
| Average non-controlling interest percentage | 17.23% |
| Net loss attributable to non-controlling interest | $125741 |

---

**NOTE 13: INCOME TAXES**

Deferred income taxes result from the temporary differences primarily attributable to amortization of intangible assets and debt discount and an accumulation of net operating loss carryforwards for income tax purposes with a valuation allowance against the carryforwards for book purposes.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Included in deferred tax assets are Federal and State net operating loss carryforwards of approximately $18.3 million, which will expire through 2040. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Due to significant changes in the Company's ownership, the Company's future use of its existing net operating losses may be limited.

Significant components of the Company's deferred tax assets as of December 31, 2024 and 2023 are summarized below.

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024** | **December 31,<br> 2023** |
| Net operating loss carryforwards | $5344521 | $5004979 |
|  | 5, 344521 | 5004979 |
| Valuation allowance | (5, 344521) | (5004979) |
| Net deferred tax assets | $— | $— |

---

In assessing the potential realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the Company attaining future taxable income during the periods in which those temporary differences become deductible. As of December 31, 2024 and 2023, management was unable to determine if it is more likely than not that the Company's deferred tax assets will be realized and has therefore recorded an appropriate valuation allowance against deferred tax assets at such dates.

No U.S. federal tax provision has been provided for the Company for the years ended December 31, 2024 and 2023 due to the losses incurred during the periods.

The reconciliation below presents the difference between the income tax rate computed by applying the U.S. federal statutory rate and the effective tax rate for the years ended December 31, 2024 and 2023.

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024** | **December 31,<br> 2023** |
| U. S. federal statutory tax rate | (21.0)% | (21.0)% |
| State statutory tax rate | (8.25)% | (8.25)% |
| Change in valuation allowance | 29.25% | 29.25% |
| Effective tax rate | 0.0% | 0.0% |

---

At December 31, 2024 and 2023, the Company has available net operating loss carryforwards for U.S. federal corporate income tax purposes of approximately $5,344,521 and $5,004,979, respectively. U.S. federal net operating losses, if not utilized earlier, expire through 2041.

**NOTE 14: RELATED PARTY TRANSACTIONS**

*For the year ended December 31, 2024*

 

The Company accrued salaries due to officers in the amount of $435,000 and made payments of accrued salaries due to officers in the amount of $263,885. At December 31, 2024, the amount of $395,423 of accrued salaries due to officers is included in the Company's balance sheet as Accrued Payroll. See note 7.

The Company accrued fees due to the Board of Directors in the amount of $100,000.

*For the year ended December 31, 2023*

 

The Company accrued salaries due to officers in the amount of $435,000, made payments of accrued salaries due to officers in the amount of $93,538, and converted accrued salaries due to officers in the amount of $511,000 into 511,000 shares of the Company's common stock. At December 31, 2023, the amount of $224,308 of accrued salaries due to officers is included in the Company's balance sheet as Accrued Payroll. See note 7.

The Company accrued fees due to the Board of Directors in the amount of $100,000, and converted accrued fees due to the Board of Directors in the amount of $250,000 into 250,000 shares of the Company's common stock.

The Company has committed to issue 710,220 shares at a price of $0.50 per share for the cashless conversion of 1,775,550 warrants. There was no gain or loss recorded on this transaction as the conversion occurred pursuant to the terms of the warrants.

The Company has committed to issue 700,000 shares of common stock at a price of $0.10 per share for the conversion of Series AAA Preferred Stock. There was no gain or loss recorded on this transaction as the conversion occurred pursuant to the terms of the Series AAA Preferred.

The Company has committed to issue 1,183,700 shares of common stock at a price of $0.50 per share for the conversion of 591,850 shares of Series AAAA Preferred Stock. There was no gain or loss recorded on this transaction as the conversion occurred pursuant to the terms of the Series AAAA Preferred.

The Company has committed to issue 63,630 shares of common stock at a price of $1.00 per share to a related party as compensation. There was no gain or loss recorded on this transaction as the transaction was recorded at the market price of the common stock.

**NOTE 15: SEGMENT INFORMATION**

The Company operates in one reportable segment: the generation of green energy. The Company intends to leverage intellectual property and engage innovative clean energy technology to provide a reliable source of green electricity. The Company has not generated any revenues from operations. The accounting policies of the segment are the same as those described in the summary of significant accounting policies. The chief operating decision maker ("CODM") includes the chief executive officer and chief operating officer. The CODM decides how to allocate resources based on the components of net loss from continuing operations and significant expenses. The CODM evaluates expenses to ensure resources are appropriately allocated to foster progress. The segment net loss from continuing operations and significant segment expenses are presented in the table below. Segment assets are reported on the balance sheet as total assets, including assets of discontinued operations.

---

| | | |
|:---|:---|:---|
|  | **Year Ended** | **Year Ended** |
|  | **December 31,** | **December 31,** |
|  | **2024** | **2023** |
| Operating Expenses: |  |  |
| Advertising and promotion | $— | $24000 |
| Bank service charges | 1189 | 691 |
| Office supplies | 5265 | 3256 |
| Payroll and related costs | 469048 | 444711 |
| Director compensation | 100000 | 100000 |
| Rent expense | 3000 | 3000 |
| Travel expense | 6226 | 4379 |
| Professional fees | 226897 | 30788 |
| Insurance | 19013 | 26276 |
| Consulting expense | 234000 | 217900 |
| Taxes and licenses | 1543 | 2866 |
| Stock Based Compensation | 139173 | 217208 |
|  | $1205354 | $1075075 |
| Other expenses: |  |  |
| Interest expense | 42082 | 51781 |
| Impairment of assets |  | 200000 |
|  | $42082 | $251781 |
| Segment net loss from continuing operations | $(1247436) | $(1326856) |
| *Reconciliation of loss* |  |  |
| Adjustments and reconciling items |  |  |
| Net loss from continuing operations | $(1247436) | $(1326856) |
| Other segment disclosures: |  |  |
| Segment assets | $43750 | $325558 |

---

**NOTE 16: SUBSEQUENT EVENTS**

On February 17, 2025, the Company sold its majority interest in AGP to a related party for cash in the amount of $1. The financial statements of AGP will no longer be included in the consolidated financial statements of the Company as of the date of the sale. The Company recorded the difference between the consideration received and book value as additional paid-in capital at the time of the transaction.

**KiNRG, Inc.**

**CONSOLIDATED BALANCE SHEET**S

---

| | | |
|:---|:---|:---|
|  | **March 31,**<br>**2025** | **December 31,**<br>**2024** |
| ASSETS | (unaudited) |  |
| Current assets: |  |  |
| Cash | $44596 | $23099 |
| Prepaid expenses | 12126 | 12126 |
| Current assets - discontinued operations |  | 3909 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 56722 | 39134 |
| Right of use asset, operating lease | 6056 | 8525 |
| Total assets | $62778 | $47659 |
| LIABILITIES AND STOCKHOLDERS' DEFICIT |  |  |
| Current liabilities: |  |  |
| Accounts payable | 44078 | 18780 |
| Accrued liabilities - related parties | 125000 | 100000 |
| Accrued payroll | 584819 | 476981 |
| Accrued interest | 124883 | 121883 |
| Lease liabilities - operating lease | 6056 | 8525 |
| Loans payable - related party | 250000 | 250000 |
| Notes payable | 80000 | 80000 |
| Other liabilities | 11511 | 11511 |
| Current liabilities - discontinued operations |  | 31265 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 1226347 | 1098945 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 1226347 | 1098945 |
| Commitments and Contingencies |  |  |
| Stockholders' equity (deficit) |  |  |
| &nbsp;&nbsp;&nbsp;Preferred stock, par value $0.0001 per share; 10,000,000 shares authorized, 5,424,700 shares undesignated |  |  |
| &nbsp;&nbsp;&nbsp;Series A Convertible Preferred stock, par value $0.0001 per share, 500,000 shares designated, 0 shares issued and outstanding at March 31, 2025 and December 31, 2024 |  |  |
| &nbsp;&nbsp;&nbsp;Series AA Convertible Preferred stock, par value $0.0001 per share, 3,000,000 shares designated, 0 shares issued and outstanding at March 31, 2025 and December 31, 2024 |  |  |
| &nbsp;&nbsp;&nbsp;Series AAA Convertible Preferred stock, $0.0001 per share, 70,000 shares designated, 0 shares issued and outstanding at March 31, 2025 and December 31, 2024 |  |  |
| &nbsp;&nbsp;&nbsp;Series AAAA Convertible Preferred stock, $0.0001 per share, 1,005,300 shares designated, 0 shares issued and outstanding at March 31, 2025 and December 31, 2024 |  |  |
| &nbsp;&nbsp;&nbsp;Common stock, par value $0.0001, 250,000,000 shares authorized, 51,598,193 and 51,538,193 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively | 5160 | 5154 |
| &nbsp;&nbsp;&nbsp;Common stock to be issued, 2,657,550 shares at March 31, 2025 and December 31, 2024 | 265 | 265 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 25389236 | 25607397 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (26558230) | (26312700) |
| &nbsp;&nbsp;&nbsp;Stockholders' deficit attributable to KiNRG, Inc. | (1163569) | (699884) |
| &nbsp;&nbsp;&nbsp;Non-controlling interest |  | (351402) |
| Total stockholders' deficit | (1163569) | (1051286) |
| Total liabilities and stockholders' equity | $62778 | $47659 |

---

See the accompanying notes to the consolidated financial statements.

**KiNRG, Inc.**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
|  | **2025** | **2024** |
|  | (unaudited) | (unaudited) |
| Operating expenses: |  |  |
| Selling, general, and administrative expenses | $234353 | $244975 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 234353 | 244975 |
| Operating loss | (234353) | (244975) |
| Other expenses: |  |  |
| Interest expense | (10397) | (7986) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other expenses | (10397) | (7986) |
| Loss before provision for income taxes | (244750) | (252961) |
| Provision for income taxes |  |  |
| Net loss from continuing operations | (244750) | (252961) |
| Less: Net loss attributable to non-controlling interest |  | (4102) |
| Net loss attributable to KiNRG, continuing operations | (244750) | (248859) |
| Net loss from discontinued operations | (780) | (20809) |
| Consolidated net loss | $(245530) | $(269668) |
| Net loss per common share from continuing operations, basic and <br>diluted | $(0.005) | $(0.004) |
| Net loss per common share from discontinued operations, basic and <br>diluted | $(0.000) | $(0.000) |
| Net loss per common share, basic and diluted | $(0.005) | $(0.005) |
| Weighted-average number of common shares outstanding, <br>basic and diluted | 51541249 | 50938193 |

---

See the accompanying notes to the consolidated financial statements.

**KiNRG, Inc.**

**CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT**

---

| | | | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Series A Preferred** | **Series A Preferred** | **Series AA Preferred** | **Series AA Preferred** | **Series AAA Preferred** | **Series AAA Preferred** | **Series AAAA Preferred** | **Series AAAA Preferred** | **Common Stock** | **Common Stock** | **Common Stock To Be Issued** | **Common Stock To Be Issued** | **Additional Paid-in** | **Accumulated** | **Non-controlling** | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Capital** | **Deficit** | **Interest** |<br>**Total** |
| **Balance, December 31, 2023** |  | $— |  | $— |  | $— |  | $— | 50938193 | $5094 | 2657550 | $265 | $24838202 | $(24980758) | $(331313) | $(468510) |
| Vesting of compensatory warrants |  |  |  |  |  |  |  |  |  |  |  |  | 34793 |  |  | 34793 |
| Imputed interest on related party loans |  |  |  |  |  |  |  |  |  |  |  |  | 4987 |  |  | 4987 |
| Net loss for the three months ended March 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  | (269668) | (4102) | (273770) |
| **Balance, March 31, 2024** |  | $— |  | $— |  | $— |  | $— | 50938193 | $5094 | 2657550 | $265 | $24877982 | $(25250426) | $(335415) | $(702500) |
| **Balance, December 31, 2024** |  | $— |  | $— |  | $— |  | $— | 51538193 | $5154 | 2657550 | $265 | $25607397 | $(26312700) | $(351402) | $(1051286) |
| Vesting of compensatory warrants |  |  |  |  |  |  |  |  |  |  |  |  | 34793 |  |  | 34793 |
| Common stock sold for cash |  |  |  |  |  |  |  |  | 60000 | 6 |  |  | 59994 |  |  | 60000 |
| Imputed interest on related party loans |  |  |  |  |  |  |  |  |  |  |  |  | 7397 |  |  | 7397 |
| Gain on sale of AGP to related party |  |  |  |  |  |  |  |  |  |  |  |  | 31057 |  |  | 31057 |
| Derecognition of noncontrolling interest |  |  |  |  |  |  |  |  |  |  |  |  | (351402) |  | 351402 |  |
| Net loss for the three months ended March 31, 2025 |  |  |  |  |  |  |  |  |  |  |  |  |  | (245530) |  | (245530) |
| **Balance, March 31, 2025** |  | $— |  | $— |  | $— |  | $— | 51598193 | $5160 | 2657550 | $265 | $25389236 | $(26558230) | $— | $(1163569) |

---

See the accompanying notes to the consolidated financial statements.

**KiNRG, Inc.**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

---

| | | |
|:---|:---|:---|
| <br>**CASH FLOWS FROM OPERATING ACTIVITIES** | **For the**<br>**Three Months Ended**<br>**March 31,**<br>**2025** | **For the**<br>**Three Months Ended**<br>**March 31,**<br>**2024** |
|  | (unaudited) | (unaudited) |
| Net loss | $(245530) | $(273770) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Stock based compensation | 34793 | 34793 |
| &nbsp;&nbsp;&nbsp;Imputed interest on loans payable | 7397 | 4987 |
| Changes in current assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Right-of-use asset | 2469 | 2400 |
| &nbsp;&nbsp;&nbsp;Accounts payable | 25302 | 6314 |
| &nbsp;&nbsp;&nbsp;Accrued liabilities - related party | 25000 | 25000 |
| &nbsp;&nbsp;&nbsp;Accrued interest | 3000 | 3000 |
| &nbsp;&nbsp;&nbsp;Accrued payroll | 107838 | 3439 |
| &nbsp;&nbsp;&nbsp;Other liabilities | (212) |  |
| &nbsp;&nbsp;&nbsp;Operating lease liability | (2469) | (2400) |
| Net cash used in operating activities | (42412) | (196237) |
| **CASH FLOWS FROM INVESTING ACTIVITIES** |  |  |
| None. |  |  |
| **CASH FLOWS FROM FINANCING ACTIVITIES** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from sale of common stock | 60000 |  |
| Net cash provided by financing activities | 60000 |  |
| Net increase (decrease) in cash and cash equivalents | 17588 | (196237) |
| Cash and cash equivalents at beginning of period | 27008 | 324456 |
| Cash and cash equivalents at end of period | $44596 | $128219 |
| Cash and cash equivalents at end of period - continuing operations | $44596 | $126460 |
| Cash and cash equivalents at end of period - discontinued operations | $— | $1759 |
| **SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:** |  |  |
| Interest paid | $— | $— |
| Income taxes paid | $— | $— |
| **NON-CASH INVESTING AND FINANCING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Sale of AGP to related party | $351402 | $— |

---

See the accompanying notes to the consolidated financial statements.

**KiNRG, Inc.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**March 31, 2025 and 2024**

**NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** 

<u>Description of Business</u>

KiNRG, Inc. is a green energy company. Our core objective and focus is to become a leading provider of clean efficient green energy to the world communities at a reasonable cost without the destructive residuals of fossil fuel, while continuing to generate innovative technological solutions for today and tomorrow's electrical power needs. KiNRG has, designed, engineered, developed and is preparing to construct large "Downdraft Energy Towers" that use benevolent, non-toxic natural elements to generate electricity economically by integrating and synthesizing numerous proven as well as emerging technologies. In addition to constructing Downdraft Energy Towers in the United States and abroad, the Company intends to establish partnerships at home and abroad to propagate these systems and meet increasing global demand for electricity. We have assembled a team of experienced business professionals, engineering, and scientific consultants with the proven ability to bring the idea to market. KiNRG has filed and been issued patents that the Company believes will further enhance this potentially revolutionary technology. KiNRG is based in Annapolis, MD.

<u>Basis of Presentation</u>

The accompanying unaudited consolidated financial statements present on a consolidated basis the accounts of the Company and subsidiaries. The Company presents noncontrolling interest within the equity section of its consolidated balance sheets and the amount of unaudited consolidated net income (loss) that is attributable to the Company and to the noncontrolling interest in its unaudited consolidated statement of operations. All significant intercompany accounts and transactions have been eliminated in consolidation.

<u>Discontinued Operations</u>

Pursuant to the guidance of Accounts Standards Codification ("ASC") 205-20, *Presentation of Financial Statements* – *Discontinued Operations,* the accounts of our discontinued entity Arizona Green Power ("AGP") have been included in "Net loss from discontinued operations" in our consolidated statements of operations until such time as the entity is sold. Additionally, the assets and liabilities of this entity have been presented as discontinued operations in our consolidated balance sheets. The Company completed the sale of AGP in the first quarter of 2025. See Note 2.

<u>Reclassifications</u>

Certain amounts presented in the financial statements of the prior period have been reclassified to conform with the current period presentation of discontinued operations. See Note 2.

<u>Fair Value of Financial Instruments</u>

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification ("Paragraph 820-10-35-37") to measure the fair value of its financial instruments. Paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a framework for measuring fair value in generally accepted accounting principles (GAAP) and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by paragraph 820-10-35-37 of the FASB Accounting Standards Codification are described below:

---

| | |
|:---|:---|
| Level 1 | Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. |
| Level 2 | Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. |
| Level 3 | Pricing inputs that are generally observable inputs and not corroborated by market data. |

---

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

Our short-term financial instruments, including cash, other assets, and accounts payable and accrued expenses consist primarily of instruments without extended maturities, the fair value of which, based on management's estimates, reasonably approximate their book value. The fair value of our notes and advances payable is based on management estimates and reasonably approximates their book value based on their current maturity.

<u>Use of Estimates</u>

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the recoverability and useful lives of long-lived assets, the fair value of the Company's stock, stock-based compensation, and the valuation allowance related to deferred tax assets. Actual results may differ from these estimates.

<u>Long-Lived Assets</u>

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with Topic ASC 360, "Property, Plant and Equipment". Recoverability is measured by comparison of the carrying amount to the future net cash flows which the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the projected discounted future cash flows arising from the asset using a discount rate determined by management to be commensurate with the risk inherent to our current business model.

<u>Net Loss per Common Share</u>

The Company computes net loss per share under Accounting Standards Codification subtopic 260-10, Earnings Per Share ("ASC 260-10"). Basic net income (loss) per common share is computed by dividing net loss by the weighted average number of shares of common stock. Diluted net loss per share is computed using the weighted average number of common and common stock equivalent shares outstanding during the period. At March 31, 2025 and 2024 there were a total of 1,200,000 and 1,140,000 shares, respectively, potentially issuable pursuant to the exercise of warrants. There is no effect on diluted loss per share since these common stock equivalents are anti-dilutive.

<u>Revenue Recognition</u>

The Company has generated no revenues to date. It is the Company's policy that revenue from product sales or services will be recognized in accordance with Financial Accounting Standards Board "FASB" Accounting Standards Codification "ASC" 606. A five-step analysis must be met as outlined in Topic 606: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations, and (v) recognize revenue when (or as) performance obligations are satisfied. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded.

<u>Stock Based Compensation</u>

We recognize the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation cost for stock options are estimated at the grant date based on each option's fair-value as calculated by the Black-Scholes-Merton ("BSM") option-pricing model. Share-based compensation arrangements may include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant.

<u>Income Taxes</u>

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of items that have been included or excluded in the financial statements or tax returns. Deferred tax assets and liabilities are determined on the basis of the difference between the tax basis of assets and liabilities and their respective financial reporting amounts ("temporary differences") at enacted tax rates in effect for the years in which the temporary differences are expected to reverse.

The Company adopted the provisions of Accounting Standards Codification ("ASC") Topic 740-10, which prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

Management has evaluated and concluded that there were no material uncertain tax positions requiring recognition in the Company's consolidated financial statements as of March 31, 2025 and December 31, 2024. The Company does not expect any significant changes in its unrecognized tax benefits within twelve months of the reporting date.

The Company's policy is to classify assessments, if any, for tax related interest as interest expense and penalties as general and administrative expenses in the consolidated statements of operations.

<u>Advertising costs</u>

All costs associated with advertising and promotion are expensed as incurred. Total recognized advertising and promotion expenses were $0 for the three months ended March 31, 2025 and 2024, respectively.

<u>Research and development</u>

In accordance with ASC 730, "Research and Development", the Company expenses all research and development costs as incurred. The Company had incurred $0 of research and development costs for the three months ended March 31, 2025 and 2024. The company expects the research and development costs to increase in the future as it continues to invest in the infrastructure that is critical to achieve our business goals and objectives.

<u>Cash and cash equivalents</u>

For purposes of the statement of cash flows, cash and cash equivalents includes demand deposits, saving accounts and money market accounts. The Company considers all highly liquid debt instruments with maturities of three months or less when purchased to be cash and cash equivalents. As of March 31, 2025 and December 31, 2024, the Company did not have cash in excess of the $250,000 FDIC insured amount.

<u>Related parties</u>

The Company follows the ASC 850-10 Related Party for the identification of related parties and disclosure of related party transactions.

Pursuant to section 850-10-20 the related parties include a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of section 825–10–15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and Income-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The consolidated financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d) amount due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

<u>Commitments and contingencies</u>

The Company follows the ASC 450-20, Commitments to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company's consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company's financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company's business, financial position, and results of operations or cash flows.

<u>Recently Issued Accounting Pronouncements</u>

In November 2023, the FASB issued ASU 2023-07, *Segment Reporting* (Topic 280): *Improvements to Reportable Segment Disclosures*. The amended guidance requires incremental reportable segment disclosures, primarily about significant segment expenses. The amendments also require entities with a single reportable segment to provide all disclosures required by these amendments, and all existing segment disclosures. The amendments will be applied retrospectively to all prior periods presented in the financial statements and is effective for fiscal years beginning after December 15, 2023, and interim periods in fiscal years beginning after December 15, 2024, with early adoption permitted. We adopted this guidance on January 1, 2024 and have included it in our annual disclosures; however, it did not impact our financial condition, results of operations, or cash flows. For additional information, see "Note 15—Segment Information."

<u>Accounting Standards Issued, Not Adopted</u>

In November 2024, the FASB issued Accounting Standard Update No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"). This standard requires additional disclosures over certain expenses, including purchases of inventory, employee compensation, depreciation, intangible asset amortization, and other specific expense categories. This standard also requires disclosure of the total amount of selling expenses and the Company's definition of selling expenses. This update is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. We are evaluating the impact this update will have on our annual disclosures; however, we do not anticipate a material impact to our financial condition, results of operations, or cash flows.

**NOTE 2: DISCONTINUED OPERATIONS**

From November 17, 2015 through December 31, 2023, through its subsidiary Arizona Green Power ("AGP"), the Company had entered into an agreement (the "Land Option Agreement"), and a series of amendments to said agreement, to purchase land in Arizona. The Land Option Agreement expired in March 2024. With the expiration of the Land Option Agreement, the Company made the strategic decision to divest itself from AGP.

On February 17, 2025, the Company completed the sale of its majority interest in AGP to Ron Pickett, its CEO, for the amount of $1. This amount was credited against the amount due to Mr. Pickett for business expenses. The were no assets on the books of AGP. The Company de-recognized the liabilities of AGP and the balance of non-controlling interest to additional paid-in capital:

---

| | |
|:---|:---|
| Other Liabilities | $(31056) |
| Non-controlling interest | 351402 |
| Accounts payable | (1) |
| APIC | $(320345) |

---

The following information presents the major classes of line item of assets and liabilities included as part of discontinued operations in the consolidated balance sheets:

---

| | | |
|:---|:---|:---|
|  | **March 31,**<br>**2025** | **December 31,**<br>**2024** |
| Current assets - discontinued operations: |  |  |
| Cash | $— | $3909 |
| Total current assets - discontinued operations | $— | $3909 |
| Current liabilities - discontinued operations: |  |  |
| Other liabilities |  | 31265 |
| Total current liabilities - discontinued operations | $— | $31265 |

---

The following information presents the major classes of line items constituting the after-tax loss from discontinued operations in the consolidated statements of operations through February 17, 2025:

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |
|  | **March 31,** | **March 31,** |
|  | **2025** | **2024** |
| Selling, general, and administrative expenses | 780 | 20809 |
| Loss from discontinued operations, net of tax | $780 | $20809 |

---

The following information presents the significant operating cash flow activities in the consolidated statements of cash flows relating to discontinued operations:

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |
|  | **March 31,** | **March 31,** |
|  | **2025** | **2024** |
| Operating activities of discontinued operations |  |  |
| Net loss from discontinued operations | $(780) | $(20809) |
| Changes in current assets and liabilities: |  |  |
| Other liabilities | (212) | 3383 |

---

**NOTE 3: GOING CONCERN** 

For the three months ended March 31, 2025, the Company had a net loss from continuing operations of $244,750 and had an accumulated deficit of $26,558,230 at March 31, 2025. For the year ended December 31, 2024, the Company incurred a net loss from continuing operations of $1,247,436 and had an accumulated deficit of $26,312,700 at December 31, 2024. At March 31, 2025 and December 31, 2024, the Company had a working capital deficit of $1,169,625 and $1,059,811, respectively. The Company has been dependent on raising capital through debt and equity financings to meet its needs for cash used in operating and investing activities. During the three months ended March 31, 2025 and the year ended December 31, 2024, the Company received proceeds of $60,000 and $600,000, respectively, from the sale of common stock. Until the Company can generate positive cash from operations, it will need to raise additional funding to meet its liquidity needs and to execute its business strategy. As in the past, the Company will seek debt and/or equity financing, which may not be available on reasonable terms, if at all.

The Company's unaudited consolidated financial statements for the three months ended March 31, 2025 and 2024 were prepared under the assumption that it would continue operations as a going concern. However, the report of the Company's independent registered public accounting firm that accompanies the Company's consolidated financial statements for the years ended December 31, 2024 and 2023 contains a qualification in which such firm expressed substantial doubt about the Company's ability to continue as a going concern.

**NOTE 4: RIGHT-OF-USE ASSETS AND LEASE LIABILITIES** – **OPERATING LEASES**

The Company has operating leases for offices. The Company adopted Topic 842, using the modified-retrospective approach as discussed in Note 3, and as a result, recognized a right-of-use asset and a lease liability. The Company uses a 12% rate to determine the present value of the lease payments. The Company's leases have remaining lease terms of less than 1 year.

The Company's lease expense was entirely comprised of operating leases. Lease expense for the three months ended March 31, 2025 and 2024 amounted to $2,700 and $2,6,25, respectively.

The Company's ROU asset amortization for the three months ended March 31, 2025 and 2024 was $2,469 and $2,400, respectively. The difference between the lease expense and the associated ROU asset amortization consists of interest.

Right of use assets – operating leases are summarized below:

---

| | | |
|:---|:---|:---|
|  | **March 31,** <br> **2025** | **December 31, 2024** |
| Office | $6056 | $8525 |
| Right of use assets, net | $6056 | $8525 |

---

Operating lease liabilities are summarized below:

---

| | | |
|:---|:---|:---|
|  | **March 31,<br> 2025** | **December 31, 2024** |
| Office | $6056 | $8525 |
| Lease liability | 6056 | 8525 |
| Less: current portion | (6056) | (8525) |
| Lease liability, non-current | $— | $— |

---

Maturity analysis under these lease agreements are as follows:

---

| | |
|:---|:---|
| For the twelve months ended March 31, 2026 | $6300 |
| Less: Present value discount | (244) |
| Lease liability | $6056 |

---

**NOTE 5: ACCRUED LIABILITIES - RELATED PARTIES**

Accrued liabilities and expenses as of March 31, 2025 and December 31, 2024 consist of the following:

---

| | | |
|:---|:---|:---|
|  | **March 31, 2025** | **December 31, 2024** |
| Board of Director fees | $125000 | $100000 |
| Total | $125000 | $100000 |

---

During the three months ended March 31, 2025 and 2024, the Company accrued fees due to the Board of Directors in the amount of $25,000.

**NOTE 6: ACCRUED PAYROLL**

Accrued payroll as of March 31, 2025 and December 31, 2024 consists of the following:

---

| | | |
|:---|:---|:---|
|  | **March 31,<br> 2025** | **December 31, 2024** |
| Accrued payroll | $563124 | $463274 |
| Accrued payroll taxes | 21695 | 13707 |
| Total | $584819 | $476981 |

---

The Company disputes the amount of $67,850 which is included in accrued payroll at March 31, 2025 and December 31, 2024. This amount was recorded during the period ended December 31, 2014 as due to its then CFO. The Company does not believe it has any liability to this individual*.* 

 

*Activity during the three months ended March 31, 2025*

 

The Company accrued salaries in the amount of $99,850, net of payments of $1,400. The Company accrued payroll taxes in the amount of $7,988 on unpaid wages.

*Activity during the three months ended March 31, 2024*

 

The Company accrued salaries in the amount of $4,788, net of payments of $103,962.

**NOTE 7: NOTES PAYABLE IN DEFAULT**

Notes payable as of December 31, 2024 and 2023 consist of the following:

---

| | | |
|:---|:---|:---|
|  | **March 31,<br> 2025** | **December 31, 2024** |
| Note payable issued April 7, 2014 | $80000 | $80000 |
| Total | 80000 | 80000 |
| Less current portion | (80000) | (80000) |
| Long term portion | $— | $— |

---

On April 7, 2014, Arizona Green Power, LLC, a majority owned subsidiary of the Company, issued a note payable for $80,000 with interest at 10% per annum with a 15% default rate of interest, due at maturity of April 6, 2016. In connection with the issuance of the note, the Company granted i) a 1.33% ownership interest in Arizona Green Power, LLC and ii) a warrant to purchase 4,800 shares of the Company's common stock exercisable at $2.00 per share. This warrant expired on March 7, 2016.

During the three months ended March 31, 2025 and 2024, the Company accrued interest in the amount of $3,000 on this note. As of March 31, 2025, the amount of principal and accrued interest due on this note is $80,000 and $124,883, respectively. As of December 31, 2024, the amount of principal and accrued interest due on this note is $80,000 and $121,883, respectively. This note is in default as of the filing date.

**NOTE 8: LOANS PAYABLE – RELATED PARTIES**

On December 28, 2022, the Company received a non-interest bearing loan in the amount of $250,000 from a related party ("2022 Loan 1"). The Company imputed interest at a rate of 12% per annum. During the three months ended March 31, 2025 and 2024, the Company charged interest expense in the amount of $7,397 and $7,479, respectively, to additional paid-in capital pursuant to 2022 Loan 1. Principal in the amount of $250,000 is due under 2022 Loan 1 at March 31, 2025 and December 31, 2024.

**NOTE 9: COMMITMENTS AND CONTINGENCIES**

*Lease Obligations*

The Company leases an office at 1213 Culbreth Drive, Suite 103, Wilmington, North Carolina 28405, on an annual lease. Rental expenses charged to operations for the three months ended March 31, 2025 and 2024 were $2,700 and $2,625, respectively.

*Employment and Consulting Agreements*

The Company has employment agreements with certain of its key employees which include non-disclosure and confidentiality provisions for protection of the Company's proprietary information.

The Company has consulting agreements with outside contractors to provide marketing and financial advisory services. The Agreements are generally for a term of 12 months from inception and renewable automatically from year to year unless either the Company or Consultant terminates such engagement by written notice.

On December 29, 2010, pursuant to the Merger, Solar Wind Energy, Inc. became a wholly-owned subsidiary of the Company. Solar Wind has employment agreements with its executive officers. Each of the employment agreements was entered into on September 22, 2010 and amended on November 22, 2010. On March 30, 2023, the Board of Directors approved the contracts of its President and of its Chief Operating Officer through December 31, 2023. Any unpaid salaries are accrued and included in Accrued Payroll on the balance sheet. See Note 7.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Name** | **Position(s)** | **Term** | **Salary** | **Bonus** | **Severance** |
| Ronald W. Pickett | President, Chief Executive Officer | 3 years; renewable for 1 year on mutual consent | $200000 | Board Discretionary | Twelve (12) month salary and benefits for termination without cause. |
| Stephen Sadle | Chief Operating Officer | 3 years; renewable for 1 year on mutual consent | $175000 | Board Discretionary | Twelve (12) month salary and benefits for termination without cause. |
| Robert Crabb | Secretary | 1 year | $30000 | Board Discretionary | N/A |

---

Terms to modify the one-year contract extension by mutual consent have been agreed to by the Officers and Directors. Under the modification and extension, the contracts will be extended for an additional 4 years with current salaries being unchanged. Provisions for automatic salary increases based on specific events related to business development successes, rights for the officers to convert any accrued salary into Company notes, and rights to receive warrants to purchase Company stock at market plus 20% premium at the time of the grant while notes are outstanding will be incorporated in the new contracts. The parties have mutually agreed to a stock option plan, the specific terms to be negotiated as part of the final contract.

*Litigation*

From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are not aware of any such legal proceedings that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results.

**NOTE 10: STOCKHOLDERS' DEFICIT**

<u>Preferred stock</u>

The Company has authorized 10,000,000 shares of preferred stock, with a par value of $0.0001 per share. As of March 31, 2025 and December 31, 2024, the Company had 0 shares of preferred stock issued and outstanding.

Series A Convertible Preferred Stock:

On June 2, 2015, the Company designated 500,000 as Series A Convertible Preferred Stock ("Series A preferred") at $0.0001 par value. Each Series A preferred share i) shall rank senior in regard to dividend rights, rights of redemption and liquidation to all classes of common stock and any class or series of capital stock of the Company hereafter creates, ii) receive dividends if and when declared by the Company's board of directors, iii) each share of Series A preferred convertible into 0.386 shares of common and iv) each share of Series A preferred stock is entitled to 8,000 votes for each share of common stock into which Series A preferred could then be converted.

There were no Series A Convertible Preferred Stock transactions during the three months ended March 31, 2025 and 2024. At March 31, 2025 and December 31, 2024, there are no shares of Series A Convertible Preferred Stock outstanding.

Series AA Convertible Preferred Stock:

On December 17, 2020, the Company designated 3,000,000 shares of Series AA Convertible Preferred stock (the "Series AA Preferred"), par value $0.0001, with a stated value of $1.00 per share. Each share of the Series AA Preferred is convertible to common stock at a rate of $0.40 per share, and will have voting rights on an as-converted basis. There are no provisions for coupons or any conversion terms into any form of debt or repayment in cash and therefore these series AA convertible preferred stock is classified as equity accounts.

There were no Series AA Convertible Preferred Stock transactions during the three months ended March 31, 2025 and 2024. At March 31, 2025 and December 31, 2024, there were no shares of Series AA Convertible Preferred Stock outstanding.

Series AAA Convertible Preferred Stock:

On March 31, 2021, the Company designated 70,000 shares of Series AAA Convertible Preferred Stock (the "Series AAA Preferred"), par value $0.0001, with a stated value of $1.00 per share. Each share of the Series AAA Preferred is convertible into ten shares of common stock and will have voting rights on an as-converted basis. There are no provisions for coupons or any conversion terms into any form of debt or repayment in cash and therefore the series AAA convertible preferred stock is classified as equity.

There were no Series AAA Convertible Preferred Stock transactions during the three months ended March 31, 2025 and 2024. At March 31, 2025 and December 31, 2024, there were no shares of Series AAA Convertible Preferred Stock outstanding.

Series AAAA Convertible Preferred Stock:

On September 30, 2021, the Company designated 500,000 shares of Series AAAA Convertible Preferred Stock (the "Series AAAA Preferred"), par value $0.0001, with a stated value of $1.00 per share. On May 24, 2022, the Company designated an additional 500,000 shares of Series AAA Preferred. Each share of the Series AAAA Preferred is convertible into two shares of common stock, and will have voting rights on an as-converted basis. On May 24, 2022, the Company increased the number of shares designated as Series AAAA Preferred to 1,000,000. Thereafter, the Company further increased the number of shares designated as Series AAAA Preferred bringing the total to 1,005,300. There are no provisions for coupons or any conversion terms into any form of debt or repayment in cash and therefore the series AAAA convertible preferred stock is classified as equity.

There were no Series AAAA Convertible Preferred Stock transactions during the three months ended March 31, 2025 and 2024. At March 31, 2025 and December 31, 2024, there were no shares of Series AAAA Convertible Preferred Stock outstanding.

<u>Common Stock</u>

*Common stock transactions during the three months ended March 31, 2025*

The Company received $60,000 from the sale of 60,000 shares of common stock and warrants to purchase an additional 60,000 shares of common stock at an exercise price of $1.00 per share.

*Common stock transactions during the three months ended March 31, 2024*

 

None.

<u>Common Stock to be Issued</u>

The Company has committed to issue 710,220 shares at a price of $0.50 per share for the cashless conversion of 1,775,550 warrants. There was no gain or loss recorded on this transaction as the conversion occurred pursuant to the terms of the warrants.

The Company has committed to issue 700,000 shares of common stock at a price of $0.10 per share for the conversion of Series AAA Preferred Stock. There was no gain or loss recorded on this transaction as the conversion occurred pursuant to the terms of the Series AAA Preferred.

The Company has committed to issue 1,183,700 shares of common stock at a price of $0.50 per share for the conversion of 591,850 shares of Series AAAA Preferred Stock. There was no gain or loss recorded on this transaction as the conversion occurred pursuant to the terms of the Series AAAA Preferred.

The Company has committed to issue 63,630 shares of common stock at a price of $1.00 per share to a related party as compensation. There was no gain or loss recorded on this transaction as the transaction was recorded at the market price of the common stock.

<u>Warrants</u>

*Warrant activity for the three months ended March 31, 2025*

 

During the three months ended March 31, 2025, the Company issued 60,000 warrants to purchase common shares of the Company at $1.00 per share. The warrants vested upon issuance and carry an expiration date of December 31, 2025.

*Warrant activity for the three months ended March 31, 2024*

 

None.

The following table summarizes the warrants outstanding and the related prices for the warrants to purchase shares of the Company's common stock issued by the Company as of March 31, 2025:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|<br><br>**Range of**<br>**exercise**<br>**prices** |<br><br>**Number of**<br>**warrants**<br>**outstanding** |<br>**Weighted**<br>**average**<br>**remaining**<br>**contractual**<br>**life (years)** | **Weighted**<br>**average**<br>**exercise**<br>**price of**<br>**outstanding**<br>**warrants** |<br><br>**Number of**<br>**warrants**<br>**exercisable** | **Weighted**<br>**average**<br>**exercise**<br>**price of**<br>**exercisable**<br>**warrants** |
| $0.40 | 1125000 | 0.75 | $0.40 | 750000 | $0.40 |
| $1.00 | 60000 | 0.75 | $1.00 | 60000 | $1.00 |
| $1.05 | 15000 | 2.25 | $1.05 | 15000 | $1.05 |
|  | 1200000 | 0.73 | $0.64 | 825000 | 0.46 |

---

Transactions involving warrants are summarized as follows:

---

| | | |
|:---|:---|:---|
| | **Number of <br> Shares** | **Weighted Average Exercise Price** |
| Warrants outstanding at December 31, 2023 | 1140000 | $0.41 |
| Issued |  |  |
| Exercised |  |  |
| Cancelled/Expired |  |  |
| Warrants outstanding at December 31, 2024 | 1140000 | $0.41 |
| Issued | 60000 | 1.00 |
| Exercised |  |  |
| Cancelled/Expired |  |  |
| Warrants outstanding at March 31, 2025 | 1200000 | $0.64 |

---

<u>Incentive Stock Plan</u>

On February 18, 2021, the Company's board of directors approved an incentive stock plan (the "2021 Incentive Stock Plan") in order to provide additional incentive to employees, directors, and consultants. The 2021 Incentive Stock Plan permits the grant of Incentive Stock Options, Non-statutory Stock Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights, Performance Units and Performance Shares. The maximum number of aggregate shares available for issuance under the 2021 Incentive Stock Plan is 4,000,000. At March 31, 2025 and December 31, 2024, no shares have been issued pursuant to the 2021 Incentive Stock Plan.

**NOTE 11: NON-CONTROLLING INTEREST**

On February 17, 2025, the Company completed the sale of its majority interest in AGP to Ron Pickett, its CEO, for the amount of $1. This amount was credited against the amount due to Mr. Pickett for business expenses. The were no assets on the books of AGP. The Company de-recognized the liabilities of AGP and the balance of non-controlling interest to additional paid-in capital:

---

| | |
|:---|:---|
| Other Liabilities | $(31056) |
| Non-controlling interest | 351402 |
| Accounts payable | (1) |
| APIC | $(320345) |

---

At March 31, 2025 and December 31, 2024, the Company's ownership interest in AGP was 0% and 82.77%, respectively, and minority interest was 0% and 17.23%, respectively.

A reconciliation of the non-controlling loss attributable to the Company:

There was no non-controlling interest net loss attributable to the Company for the three months ended March 31, 2025.

Net loss attributable to non-controlling interest for the three months ended March 31, 2024 is presented below.

---

| | |
|:---|:---|
| Net loss generated by AGP | $23809 |
| Average non-controlling interest percentage | 17.23% |
| Net loss attributable to non-controlling interest | $4102 |

---

**NOTE 12: RELATED PARTY TRANSACTIONS**

*For the three months ended March 31, 2025*

 

On February 17, 2025, the Company completed the sale of its majority interest in AGP to Ron Pickett, its CEO, for the amount of $1. This amount was credited against the amount due to Mr. Pickett for business expenses. The were no assets on the books of AGP. The Company de-recognized the liabilities of AGP and the balance of non-controlling interest to additional paid-in capital.

The Company accrued salaries due to officers in the amount of $99,850, net of payments of $1,400. The Company accrued payroll taxes in the amount of $7,988 on unpaid wages. At March 31, 2025 and December 31, 2024, the amount of $495,273 and $395,423, respectively, of accrued salaries due to officers is included in the Company's balance sheet as Accrued Payroll. See note 7.

The Company accrued fees due to the Board of Directors in the amount of $25,000.

*For the three months ended March 31, 2024*

 

The Company accrued salaries in the amount of $4,788, net of payments of $103,962.

The Company accrued fees due to the Board of Directors in the amount of $25,000.

*Common stock to be issued* 

 

The Company has committed to issue 710,220 shares at a price of $0.50 per share for the cashless conversion of 1,775,550 warrants. There was no gain or loss recorded on this transaction as the conversion occurred pursuant to the terms of the warrants.

The Company has committed to issue 700,000 shares of common stock at a price of $0.10 per share for the conversion of Series AAA Preferred Stock. There was no gain or loss recorded on this transaction as the conversion occurred pursuant to the terms of the Series AAA Preferred.

The Company has committed to issue 1,183,700 shares of common stock at a price of $0.50 per share for the conversion of 591,850 shares of Series AAAA Preferred Stock. There was no gain or loss recorded on this transaction as the conversion occurred pursuant to the terms of the Series AAAA Preferred.

The Company has committed to issue 63,630 shares of common stock at a price of $1.00 per share to a related party as compensation. There was no gain or loss recorded on this transaction as the transaction was recorded at the market price of the common stock.

**NOTE 13: SEGMENT INFORMATION**

The Company operates in one reportable segment: the generation of green energy. The Company intends to leverage intellectual property and engage innovative clean energy technology to provide a reliable source of green electricity. The Company has not generated any revenues from operations. The accounting policies of the segment are the same as those described in the summary of significant accounting policies. The chief operating decision maker ("CODM") includes the chief executive officer and chief operating officer. The CODM decides how to allocate resources based on the components of net loss from continuing operations and significant expenses. The CODM evaluates expenses to ensure resources are appropriately allocated to foster progress. The segment net loss from continuing operations and significant segment expenses are presented in the table below. Segment assets are reported on the balance sheet as total assets, including assets of discontinued operations.

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |
|  | **March 31,** | **March 31,** |
|  | **2025** | **2024** |
| Operating Expenses: |  |  |
| Bank Service Charges | 140 | 350 |
| Office Supplies | 4770 | 2205 |
| Payroll and Related Costs | 109497 | 116338 |
| Director Compensation | 25000 | 25000 |
| Rent Expense | 3450 | 1000 |
| Travel Expense | 5691 | 451 |
| Professional Fees | 38253 | 54951 |
| Insurance | 12098 | 6517 |
| Consulting Expense | 214 | 3000 |
| Taxes and Licenses | 447 | 370 |
| Stock-based Compensation | 34793 | 34793 |
|  | 234353 | 244975 |
| Other expenses: |  |  |
| Interest Expense | 10397 | 7986 |
|  | 10397 | 7986 |
| Segment loss | (244750) | (252961) |
| Adjustments and reconciling items |  |  |
| Net loss from continuing operations | (244750) | (252961) |
| Other segment disclosures: |  |  |
| Segment assets | $62778 | $134106 |

---

**NOTE 14: SUBSEQUENT EVENTS**

In June 2025, the Company received $190,000 from the sale of 190,000 shares of common stock and warrants to purchase an additional 110,000 shares of common stock at an exercise price of $1.00 per share.

On June 30, 2025, the Company issued 150,000 shares of common stock at a price of $1.00 per share to Directors for the conversion of accrued director's fees in the amount of $150,000. There was no gain or loss recorded on this transaction as the conversion occurred at the market price at the time of the conversion.

On June 30, 2025, the Company issued 250,000 shares of common stock at a price of $1.00 per share to a related party for the conversion of a note payable in the amount of $250,000. There was no gain or loss recorded on this transaction as the conversion occurred at the market price at the time of the conversion.

On June 30, 2025, the Company issued 230,000 shares of common stock at a price of $1.00 per share to Officers for the conversion of accrued salary in the amount of $230,000. There was no gain or loss recorded on this transaction as the conversion occurred at the market price at the time of the conversion.

**SIGNATURES**

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | |
|:---|:---|
|  | **KiNRG, Inc.** |
| Date: July 24, 2025 | /s/Ronald W. Rickett |
|  | Ronald W. Pickett<br>|

---

## Exhibit 2.1

**Exhibit 2.1**

**AGREEMENT AND PLAN OF MERGER**

THIS AGREEMENT AND PLAN OF MERGER, dated as of December 29, 2010 (the " <u>Agreement</u> "), by and among Superior Silver Mines, Inc., a Nevada corporation (" <u>Acquiror</u> "), Superior Silver Mines Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of Acquiror (" <u>MergerCo</u> "), and Clean Wind Energy, Inc., a Delaware corporation (the " <u>Company</u> ")

RECITALS

WHEREAS, Acquiror, through MergerCo, desires to acquire all of the shares of the capital stock of the Company on the terms and conditions set forth in this Agreement;

WHEREAS, the parties intend to effectuate the aforementioned acquisition of Company Shares by merging MergerCo with and into the Company (the " <u>Merger</u> ") pursuant to the terms and conditions set forth in this Agreement with the Company being the surviving corporation in the Merger;

WHEREAS, the parties intend this transaction to be treated as a reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended (the " <u>Code</u> "); and

WHEREAS, the Company and its stockholders deem it advisable and in their best interests to effect the Merger contemplated by this Agreement.

NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this Agreement, the parties agree as follows:

ARTICLE 1.

CERTAIN DEFINITIONS; INTERPRETATION

Section 1.1 <u>Certain Definitions</u> . The following terms are used in this Agreement with the meanings set forth below:

"Acquiror" has the meaning assigned in the preamble to this Agreement.

"Acquiror Articles" means the Articles of Incorporation of the Acquiror, as amended.

"Acquiror Benefit Plans" has the meaning assigned in Section 4.3(n)(1).

"Acquiror Bylaws" means the Bylaws of Acquiror.

"Acquiror Board" has the meaning assigned in Section 4.3(c).

"Acquiror Common Stock" has the meaning assigned in Section 3.1(c).

"Acquiror Disclosure Schedule" has the meaning assigned in Section 4.1.

"Acquiror ERISA Affiliate" has the meaning assigned in Section 4.3(n)(6).

"Acquiror Financial Statements" has the meaning assigned in Section 4.3(g)(2).

"Acquiror License Agreements" has the meaning assigned in Section 4.3(p)(1).

"Acquiror Material Contracts" has the meaning assigned in Section 4.3(i)(1).

"Acquiror Preferred Stock" has the meaning assigned in Section 4.3(e).

"Acquiror Reports" has the meaning assigned in Section 4.3(k)(6).

"Acquiror SEC Documents" has the meaning assigned in Section 4.3(g)(1).

"Acquiror Stock" has the meaning assigned in Section 4.3(e).

"Affiliate" means, with respect to any specified person, any other person, directly or indirectly controlling, controlled by or under common control with such specified person. For purposes of this definition, "control" when used in connection with any specified person means the power to direct the management or policies of such person, directly or indirectly, whether through the ownership of voting securities, by Contract or otherwise; and the terms "controlling" and "controlled" have correlative meanings to the foregoing.

"Agreement" means this Agreement, as amended or modified from time to time in accordance with Section 8.2.

"Business Day" means any day on which the principal offices of the SEC in Washington, D.C. are open to accept filings or, in the case of determining a date when any payment is due, any day on which banks are not required or authorized by law to close in New York, New York.

"Certificate of Merger" has the meaning assigned in Section 2.2.

"Closing" has the meaning assigned in Section 2.2.

"Closing Date" has the meaning assigned in Section 2.2

"Code" has the meaning assigned in the Recitals to this Agreement.

"Common Stock Exchange Ratio" has the meaning assigned in Section 3.1(c).

"Company" has the meaning assigned in the preamble to this Agreement.

"Company Board" has the meaning assigned in Section 4.2(c)(1).

"Company Bylaws" means the By-laws of the Company.

"Company Certificate" means the Certificate of Incorporation of the Company, as amended.

"Company Common Stock" means each share of common stock, par value $0.001 per share, of the Company.

"Company Disclosure Schedule" has the meaning assigned in Section 4.1.

"Company Financial Statements" means the audited financial statements of the Company as of September 30, 2010, which are set forth on <u>Schedule 1.1</u> , consisting of the consolidated balance sheet at such date and the related consolidated statements of earnings and retained earnings and cash flows for the period then ended, and all notes thereto.

"Company License Agreements" has the meaning assigned in Section 4.2(q)(1).

"Company Preferred Stock" has the meaning assigned in Section 4.2(e).

"Company Stock" means, collectively, the Company Common Stock and the Company Preferred Stock.

"Contract" means, with respect to any person, any agreement, indenture, undertaking, debt instrument, contract, contractual obligation, lease or other commitment to which such person or any of its Subsidiaries is a party or by which any of them is bound or to which any of their properties is subject.

"Copyrights" has the meaning assigned in Section 4.2(q)(1).

"DGCL" means the General Corporation Law of the State of Delaware.

"Effective Date" means the date on which the Effective Time occurs.

"Effective Time" has the meaning assigned in Section 2.2.

"Environmental Laws" means any federal, state, municipal or local law which regulates, governs, relates to or otherwise imposes liability or standards of conduct concerning discharges, emissions, releases or threatened releases of any pollutants, contaminants or hazardous or toxic wastes, substances or materials, whether as liquids, solids or gases, into ambient air, surface water, ground water, land or into the environment, or otherwise relating to noise, odors, mold and other fungi, petroleum, asbestos, lead based paint, employee health and safety, including occupational safety laws or which regulates, governs, relates to the manufacture, processing, generation, distribution, use, treatment, storage, disposal, cleanup, transport or handling of pollutants, contaminants, or hazardous or toxic wastes, substances or materials, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, the Superfund Amendments and Reauthorization Act of 1986, as amended, the Resource Conservation and Recovery Act of 1976, as amended, the Toxic Substances Control Act of 1976, as amended, the Federal Water Pollution Control Act Amendments of 1972, the Clean Water Act of 1977, as amended, any so-called "Superfund" or "Superlien" Law (including those already referenced in this definition) and any other law of any Governmental Authority having a similar subject matter.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.

"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

"Exchange Agent" has the meaning assigned in Section 3.3(a).

"Exchange Fund" has the meaning assigned in Section 3.3(a).

"GAAP" means United States generally accepted accounting principles at the time in effect.

"Governmental Authority" means any court, administrative agency or commission, self-regulatory organization or other foreign, federal, state or local governmental authority or instrumentality.

"Hazardous Substances" means any material or substance which (i) constitutes a hazardous substance, toxic substance or pollutant (as such terms are defined by or pursuant to any Environmental Law) or (ii) is regulated or controlled as a hazardous substance, toxic substance, pollutant or other regulated or controlled material, substance or matter pursuant to any Environmental Law, or (iii) has been determined to have deleterious effects on human health.

"Intellectual Property" has the meaning assigned in Section 4.2(q)(1).

"IRS" means the Internal Revenue Service.

"Knowledge" means, (i) with respect to the Company, the actual knowledge after reasonable inquiry of Ronald Pickett, and, (ii) with respect to Acquiror, the actual knowledge after reasonable inquiry of Thomas S. Smith and Dennis O'Brien.

"Liens" means any charge, mortgage, pledge, security interest, restriction, claim, lien, or encumbrance.

"Material Adverse Effect" means with respect to Acquiror, the Company, or the Surviving Corporation, respectively, any change, effect, event or occurrence that, individually or in the aggregate, has a material adverse effect on the financial position, results of operations, assets, properties, business, or prospects of Acquiror and its Subsidiaries, taken as a whole, the Company, or the Surviving Corporation, as the case may be; provided that "Material Adverse Effect" shall not be deemed to include the effects of (i) any changes in GAAP that affect generally entities such as the Company or the Acquiror, (ii) general business or economic conditions or from general changes or developments affecting the industries in which the Company or the Acquiror operate in areas where the Company or the Acquiror does business directly or through its Subsidiaries, except to the extent that any such change has a disproportionate impact on the Company or Acquiror or its Subsidiaries, (iii) financial, banking or securities markets in general (including any disruption thereof and any decline in the price of any security or any market index), (iv) any change in the trading price of the Acquiror Common Stock between the date hereof and the Effective Time, or (v) the announcement of this Agreement or the consummation of the transactions contemplated hereby, including compliance with the covenants set forth herein, or any action taken or omitted to be taken by (x) the Company at the written request or with the prior written consent of Acquiror or MergerCo or (y) Acquiror or MergerCo at the written request or with the prior written consent of the Company.

"Merger" has the meaning assigned in the Recitals of this Agreement.

"MergerCo" has the meaning assigned in the preamble to this Agreement.

"Merger Consideration" has the meaning assigned in Section 3.1(c).

"OTC BB" has the meaning assigned in Section 4.3(w).

"Patents" has the meaning assigned in Section 4.2(q)(1).

"Permitted Liens" means (a) statutory Liens for current Taxes or other governmental charges not yet due and payable or the amount or validity of which is being contested in good faith by appropriate Proceedings, (b) Liens arising under workers' compensation, unemployment insurance, social security, retirement and similar legislation, (c) other statutory liens securing payments not yet due including builder, mechanic, warehousemen, materialmen, contractor, landlord, workmen, repairmen, and carrier Liens, (d) purchase money Liens and Liens securing rental payments under capital lease arrangements entered into in the ordinary course of business or necessary to meet production or other requirements for the fulfillment of customer contracts or orders, and (e) mortgages, or deeds of trust, security interests or other encumbrances on title related to indebtedness reflected on the consolidated financial statements of the Company or Acquiror.

"Person" means and includes an individual, bank, partnership, joint venture, limited liability company, corporation, trust, unincorporated organization and government or any department or agency thereof.

"Press Release" has the meaning assigned in Section 5.6.

"Pro Forma Financial Statements" has the meaning assigned in Section 5.7.

"Proceeding" means any claim, action, arbitration, audit, contest, hearing, investigation, litigation or suit (whether civil, criminal, administrative, investigative or informal) commenced, brought, conducted, or heard by or before or otherwise involving, any court, administrative agency, other Governmental Authority or arbitrator.

"Rights" means, with respect to any person, securities or obligations convertible into or exercisable or exchangeable for, or giving any person any right to subscribe for, redeem or acquire, or any options, calls or commitments relating to, or any stock appreciation right or other instrument the value of which is determined in whole or in part by reference to the market price or value of, shares of capital stock of such person.

"SEC" means the U.S. Securities and Exchange Commission.

"Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations thereunder.

"Securities Laws" means, collectively, the Securities Act, the Exchange Act, the Investment Advisors Act of 1940, the Investment Company Act of 1940, and any state securities and "blue sky" laws.

"Software" has the meaning assigned in Section 4.2(q)(1).

"Subsidiary" means any Person in which the Company or Acquiror holds any outstanding equity or voting interests.

"Surviving Corporation" has the meaning assigned in Section 2.1.

"Taxes" shall mean (i) all taxes, charges, fees, duties (including customs duties), levies or other assessments, including income, gross receipts, net proceeds, ad valorem, turnover, real and personal property (tangible and intangible), sales, use, franchise, excise, value added, stamp, leasing, lease, user, transfer, fuel, excess profits, occupational, interest equalization, windfall profits, severance, license, payroll, environmental, capital stock, disability, employee's income withholding, other withholding, unemployment and Social Security taxes, which are imposed by any Governmental Authority, and such term shall include any interest, penalties or additions to tax attributable thereto, and (ii) any liability of the Company, Acquiror, MergerCo or any Subsidiary for the payment of amounts determined by reference to amounts described in clause (i) as a result of being a member of an affiliated, consolidated, combined or unitary group.

"Tax Returns" means, collectively, all returns, declarations, reports, estimates, information returns and statements required to be filed under federal, state, local or any foreign tax laws.

"Trademarks" has the meaning assigned in Section 4.2(q)(1).

"Trade Secrets" has the meaning assigned in Section 4.2(q)(1).

"Transaction Form 8-K" has the meaning assigned in Section 5.6.

"WARN" has the meaning assigned in Section 4.2(n)(3).

Section 1.2 <u>Interpretation</u> . When a reference is made in this Agreement to Recitals, Sections, Annexes or Schedules, such reference shall be to a Recital or Section of, or Annex or Schedule to, this Agreement unless otherwise indicated. The headings contained in this Agreement are for reference purposes only and are not part of this Agreement. Whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed followed by the words "without limitation." No rule against the draftsperson shall be applied in connection with the interpretation or enforcement of this Agreement. Whenever this Agreement shall require a party to take an action, such requirement shall be deemed to constitute an undertaking by such party to cause its Subsidiaries also to take such action.

ARTICLE 2.

THE MERGER

Section 2.1 <u>The Merger</u> . Upon the terms and subject to the conditions hereof, at the Effective Time and in accordance with the provisions of this Agreement and the DGCL, MergerCo shall be merged with and into the Company, whereupon the separate corporate existence of MergerCo shall cease, and the Company shall continue as the surviving corporation (the " <u>Surviving Corporation</u> "). From and after the Effective Time, the Surviving Corporation shall possess all the rights, privileges, immunities, powers and franchises, of a public as well as a private nature, of the Company and MergerCo, and be subject to all the liabilities, obligations and duties of the Company and MergerCo, all as more fully described in the DGCL.

Section 2.2 <u>Closing; Effective Time</u> . Unless this Agreement has been terminated pursuant to Article 7 and subject to the satisfaction or, when permissible, waiver of the conditions set forth in Article 6, the closing of the Merger (the " <u>Closing</u> ") shall take place at the offices of Holland & Knight LLP in Miami, Florida, as soon as practicable but in no event later than 3:00 p.m. EST time on the first Business Day after the date on which each of the conditions set forth in Article 6 has been satisfied or waived or at such other place, at such other time or on such other date as MergerCo and the Company may mutually agree. The date on which the Closing actually occurs is hereinafter referred to as the " <u>Closing Date</u> ." At the Closing, MergerCo and the Company shall cause a certificate of merger for the Merger (the " <u>Certificate of Merger</u> ") to be executed and filed with the Secretary of State of the State of Delaware in the form required by and executed in accordance with the applicable provisions of the DGCL. The Merger shall become effective as of the date and time of such filing or such other time after such filings as the parties hereto shall agree to in the Certificate of Merger (the " <u>Effective Time</u> ").

Section 2.3 <u>Certificate of Incorporation</u> . At the Effective Time, the Company Certificate shall be amended to read in its entirety as set forth on <u>Exhibit A</u> hereto and as so amended shall be the certificate of incorporation of the Surviving Corporation until thereafter amended as provided by the DGCL and such certificate of incorporation.

Section 2.4 <u>Bylaws</u> . At the Effective Time, the Company Bylaws shall be amended in their entirety as set forth on <u>Exhibit B</u> hereto and as so amended shall by the bylaws of the Surviving Corporation until thereafter amended in accordance with the terms thereof, the certificate of incorporation of the Surviving Corporation and the DGCL.

Section 2.5 <u>Directors and Officers</u> . The directors and officers of the Company immediately prior to the Effective Time shall become, from and after the Effective Time, the directors and officers of the Surviving Corporation, until their respective successors are duly elected or appointed, or until such person's earlier death, resignation or removal.

Section 2.6 <u>Board of Directors of Acquiror</u> . Effective as of and after the Effective Time, the Board of Directors of Acquiror shall consist of persons selected by the Company and Acquiror whom are listed on <u>Exhibit C</u> of the Agreement; provided that in no event shall the members of the Board of Directors of the Acquiror immediately preceding the Effective Time constitute less than a majority of the Board of Directors immediately following the Effective Time.

Section 2.7 <u>Further Assurances</u> . At and after the Effective Time, the officers and directors of the Surviving Corporation will be authorized to execute and deliver, in the name and on behalf of the Company or MergerCo, any deeds, bills of sale, assignments or assurances and to take and do, in the name and on behalf of the Company or MergerCo, any other actions and things to vest, perfect or confirm of record or otherwise in the Surviving Corporation any and all right, title and interest in, to and under any of the rights, properties or assets acquired or to be acquired by the Surviving Corporation as a result of, or in connection with, the Merger.

Section 2.8 <u>Effect of the Merger</u> . From and after the Effective Time, the effect of the Merger shall be as provided in the applicable provisions of the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all the properties, rights, privileges, powers and franchises of the Company and MergerCo shall vest in the Surviving Corporation, and all debts, liabilities, obligations, restrictions and duties of each of the Company and MergerCo shall, by operation of law, become the debts, liabilities, obligations, restrictions and duties of the Surviving Corporation.

ARTICLE 3.

CONVERSION OF SHARES

Section 3.1 <u>Effect on Capital Stock</u> . At the Effective Time, by virtue of the Merger and without any action on the part of the Company, Acquiror, MergerCo or the holders of any of the following securities:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Capital Stock of MergerCo</u> . Each share of common stock, par value $0.01 per share, of MergerCo issued and outstanding immediately prior to the Effective Time shall be canceled and shall be converted automatically into one share of common stock of the Surviving Corporation. Such share will constitute the only outstanding share of capital stock of the Surviving Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Treasury Stock and Acquiror Owned Stock</u> . Each share of Company Common Stock or Right to acquire Company Common Stock that is owned or controlled by the Company or Acquiror shall automatically be canceled, retired and shall cease to exist without payment of any consideration thereof and without any conversion thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Conversion of Company Common Stock</u> . Each issued and outstanding share of Company Common Stock shall be converted into and represent the right to receive, and will be exchangeable for, 4,000 shares (the " <u>Common Stock Exchange Ratio</u> ") of validly issued, fully paid and nonassessable shares of Acquiror Common Stock, par value $0.0001 per share (the " <u>Acquiror Common Stock</u> "), subject to adjustment pursuant to Section 3.2 (the " <u>Merger Consideration</u> "). The total consideration to be paid to the stockholders of the Company in connection with the Merger shall be the issuance of 300,000,000 shares of Acquiror Common Stock on the Closing Date.

Section 3.2 <u>Adjustment of Merger Consideration</u> . If, after the date of this Agreement, but prior to the Effective Time,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the shares of Acquiror Common Stock or Company Common Stock issued and outstanding shall, through a reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar change in the capitalization of Acquiror (regardless of the method of effectuation of any of the foregoing, including by way of a merger or otherwise), increase or decrease in number or be changed into or exchanged for a different kind or number of securities, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the Company shall issue any additional shares of its Common Stock or other securities that are exercisable for or convertible into shares of Common Stock of the Company,

then, in either event, the applicable Merger Consideration and the Common Stock Exchange Ratio shall be appropriately adjusted to provide the holders of Company Stock and holders of Acquiror Common Stock the same economic effect as contemplated by this Agreement prior to such event.

Section 3.3 <u>Payment for Company Stock</u> .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Exchange Agent</u> . Not less than three (3) Business Days prior to the Closing Date, unless otherwise agreed by the Company, Acquiror shall designate a bank or trust company reasonably acceptable to the Company to act as exchange agent in connection with the Merger (the " <u>Exchange Agent</u> ") for the purpose of exchanging certificates (the " <u>Certificates</u> ") that immediately prior to the Effective Time represented shares of Company Stock for the applicable Merger Consideration. At or prior to the Effective Time, Acquiror shall deposit with the Exchange Agent, for the benefit of the holders of Company Stock, certificates or, at Acquiror's option, evidence of shares in book-entry form, representing shares of Acquiror Common Stock in such denominations as the Exchange Agent may reasonably specify, and cash sufficient to make payments in lieu of fractional shares pursuant to Section 3.3(c). All such certificates (or evidence of book-entry form, as the case may be) for shares of Acquiror Common Stock so deposited, together with any dividends or distributions with respect thereto, and cash deposited with the Exchange Agent is hereinafter referred to as the " <u>Exchange Fund</u> ."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Exchange</u> .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) As soon as reasonably practicable after the Effective Time but no later than fourteen (14) days thereafter, the Surviving Corporation shall cause to be mailed to each record holder, as of the Effective Time, of shares of Company Stock, (i) a letter of transmittal (which shall be in customary form and shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon proper delivery of the Certificates to the Exchange Agent) and (ii) instructions for use of the letter of transmittal in effecting the surrender of the Certificates for payment of the applicable Merger Consideration therefor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) In effecting the payment and delivery of the applicable Merger Consideration in respect of Company Stock entitled to the applicable Merger Consideration pursuant to Section 3.1, upon the surrender of a Certificate, the Exchange Agent shall deliver the number of whole shares of Acquiror Common Stock, as well as cash sufficient to make payments in lieu of any fractional shares of Acquiror Common Stock pursuant to Section 3.3(c), which such holder is entitled to receive as Merger Consideration in accordance with this Article 3. Upon such delivery, such Certificate so surrendered shall forthwith be canceled.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) If Acquiror Common Stock is to be remitted to a Person other than that in which the Certificate surrendered for exchange is registered, it shall be a condition of such delivery: (a) that the Certificate so surrendered shall be properly endorsed, with signature guaranteed or otherwise in proper form for transfer, and (b) the Person requesting such delivery shall pay to the Exchange Agent any transfer or other taxes required by reason of the delivery to a Person, other than that of the registered holder of the Certificate surrendered, or shall establish to the satisfaction of the Exchange Agent that such Tax has been paid or is not applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Until surrendered in accordance with the provisions of this Section 3.3, each Certificate shall, after the Effective Time, represent for all purposes only the right to receive upon such surrender, the applicable Merger Consideration applicable thereto, without any interest thereon, subject to any required withholding Taxes, the delivery of which shall be deemed to be the satisfaction in full of all rights pertaining to the shares of Company Stock exchanged in the Merger.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) The stock transfer books of the Company shall be closed immediately upon the Effective Time and there shall be no further registration of transfers of shares of Company Stock thereafter on the records of the Company. On or after the Effective Time, any Certificates presented to the Exchange Agent or the Surviving Corporation for any reason shall be cancelled and exchanged into the applicable Merger Consideration and, if applicable, cash payment in lieu of fractional shares of Acquiror Common Stock pursuant to Section 3.3(c), with respect to the shares of Company Stock formerly represented thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>No Issuance of Fractional Shares</u> . No certificate or scrip representing fractional Acquiror Common Stock shall be issued upon the surrender of Certificates or otherwise in the Merger. Notwithstanding any other provision of this Agreement, each holder of shares of Company Stock that are converted pursuant to the Merger who would otherwise have been entitled to receive a fraction of a share of Acquiror Common Stock (after taking into account all Certificates delivered by such holder and the aggregate number of Company Stock formerly represented thereby) shall receive, in lieu thereof, cash (without interest) in an amount equal to such fractional amount multiplied by the average of the daily closing sales prices of a share of Acquiror Common Stock as reported on the OTC BB for the five consecutive trading days immediately preceding the Effective Time. The parties acknowledge that payment of cash in lieu of issuing fractional shares is solely for the purpose of avoiding the expense and inconvenience to Acquiror of issuing fractional shares and does not represent separately bargained-for consideration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Lost Certificates</u> . If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if required by Acquiror, the posting by such Person of a bond in such reasonable amount as Acquiror may direct as indemnity against any claim that may be made against it with respect to such Certificate, the Exchange Agent will deliver in exchange for such lost, stolen or destroyed Certificate the applicable Merger Consideration and, if applicable, cash payment in lieu of fractional shares of Acquiror Common Stock pursuant to Section 3.3(c), with respect to the Company Common Stock formerly represented thereby, pursuant to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Distributions With Respect to Unexchanged Shares</u> . No dividends or other distributions with respect to shares of Acquiror Common Stock issuable with respect to the shares of Company Stock shall be paid to the holder of any unsurrendered Certificates until those Certificates are surrendered as provided in this Article 3. Upon surrender, there shall be issued and/or paid to the holder of the shares of Acquiror Common Stock issued in exchange therefor, without interest, (i) at the time of surrender, the dividends or other distributions payable with respect to those shares of Acquiror Common Stock with a record date on or after the date of the Effective Time and a payment date on or prior to the date of this surrender and not previously paid and (ii) at the appropriate payment date, the dividends or other distributions payable with respect to those shares of Acquiror Common Stock with a record date on or after the date of the Effective Time but with a payment date subsequent to surrender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Termination of Exchange Fund</u> . Any portion of the Exchange Fund which remains undistributed to the stockholders of the Company for twelve months after the Effective Time shall be delivered to Acquiror, upon demand, and any holders of Company Common Stock prior to the Merger who have not theretofore complied with Article 3 shall thereafter look only to Acquiror for payment and delivery of the applicable Merger Consideration, for unexchanged Certificates to which such holders may be entitled.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>No Liability</u> . None of Acquiror, MergerCo, the Surviving Corporation or the Exchange Agent shall be liable to any Person in respect of any portion of the Exchange Fund delivered to a public official pursuant to any applicable abandoned property, escheat or similar law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Withholding</u> . Acquiror and the Exchange Agent shall be entitled to deduct and withhold from the Merger Consideration otherwise payable pursuant to this Agreement to any holder of Company Stock such amounts as it is required to deduct and withhold with respect to the making of such payment under the Code and the rules and regulations promulgated thereunder, or any provision of state, local or foreign tax law. To the extent that amounts are so withheld by Acquiror or the Exchange Agent, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the shares of Company Stock in respect of which such deduction and withholding was made by Acquiror or the Exchange Agent.

ARTICLE 4.

REPRESENTATIONS AND WARRANTIES OF<br> THE COMPANY, ACQUIROR AND MERGERCO

Section 4.1 <u>Disclosure Schedules</u> . On or prior to the date hereof, the Company has delivered to Acquiror a schedule setting forth, among other things, items the disclosure of which is necessary or appropriate either: (i) in response to an express informational requirement contained in or requested by a provision hereof, or (ii) as an exception to one or more representations or warranties contained in Section 4.2 or to one or more of its covenants contained in Article 5 (the " <u>Company Disclosure Schedule</u> "). On or prior to the date hereof, Acquiror has delivered to the Company, a schedule setting forth, among other things, items the disclosure of which is necessary or appropriate either: (i) in response to an express informational requirement contained in or requested by a provision hereof, or (ii) as an exception to one or more representations or warranties contained in Section 4.3 or to one or more of its covenants contained in Article 5 (the " <u>Acquiror Disclosure Schedule</u> "). The inclusion of an item in either the Company Disclosure Schedule or the Acquiror Disclosure Schedule as an exception to a representation or warranty or covenant shall not be deemed an admission by a party that such item (or any undisclosed item or information of comparable or greater significance) represents a material exception or fact, event or circumstance with respect to the Company, Acquiror or MergerCo, respectively.

Section 4.2 <u>Representations and Warranties of the Company</u> . Except as set forth in the Company Disclosure Schedule, the Company hereby represents and warrants to Acquiror and MergerCo as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Organization, Standing and Authority</u> . The Company is a corporation, duly organized, validly existing and in good standing under the laws of the State of Delaware, and is duly qualified or licensed to do business and is in good standing in all jurisdictions where its ownership or leasing of property or assets or the conduct of its business requires it to be so qualified or licensed, except for those jurisdictions in which failure to do so has not, or could not reasonably be expected to have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Corporate Power</u> . The Company has all requisite corporate power and authority to own, lease and operate their respective properties and to carry on their respective businesses as they are now being owned, leased, operated and conducted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Corporate Authority</u> .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Company has the requisite corporate power and authority necessary to authorize the execution and delivery of, and performance of its obligations under, this Agreement and to consummate the transactions contemplated by this Agreement. The execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by the Board of Directors of the Company (the " <u>Company Board</u> ") and a majority of the outstanding shares of Company Common Stock. This Agreement has been duly and validly executed and delivered by the Company and is a valid and legally binding obligation of the Company, enforceable in accordance with its terms, subject only to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability related to or affecting creditors' rights and to general principles of equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The Company Board (i) has determined that the Merger is advisable, fair to and in the best interests of the Company and its stockholders, (ii) has approved and adopted this Agreement and declared its advisability and approved the Merger and the other transactions contemplated by this Agreement, and (iii) recommended that the stockholders of the Company approve and adopt this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Regulatory Filings; Consents; No Defaults</u> .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) No consents, approvals, orders or authorizations of, or filings, registrations, declarations or qualifications with, any Governmental Authority are required to be made or obtained by the Company in connection with the execution, delivery or performance by the Company of this Agreement, or to consummate the Merger, except for the filing of the Certificate of Merger with the Secretary of State of the State of Delaware and appropriate documents with the relevant authorities of other states in which the Company is qualified to do business. As of the date hereof, the Company has no Knowledge of any reason why the approvals of all Governmental Authorities necessary to permit consummation of the transactions contemplated by this Agreement will not be received.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) No consent by or approval or authorization of or notice to any other Person (other than a Governmental Authority) is required, whether under any license or other Contract or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The receipt of the approvals and consents referred to in Section 4.2(d)(1) and Section 4.2(d)(2), the expiration of applicable waiting periods and the making of required filings under Securities Laws, the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby do not and will not: (A) constitute a breach or violation of, or a default under, or give rise to any Lien, any acceleration of remedies, any right of termination (with or without the giving of notice, passage of time or both) or any put or call right under, any law, rule or regulation or any judgment, decree, order, governmental or nongovernmental permit or license, or Contract of the Company or to which the Company or its properties is subject or bound, (B) constitute a breach or violation of, or a default under, the Company Certificate or the Company Bylaws, or (C) require any consent or approval under any such law, rule, regulation, judgment, decree, order, governmental or nongovernmental permit or license or Contract, except, in the case of clauses (A), (B) and (C), for any such conflict, violation, breach, default, loss, right, consent or approval or other occurrence which would not, or would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Company Stock</u> . The authorized capital stock of the Company consists of: (i) 100,000 shares of Company Common Stock, and (ii) no shares of preferred stock (" <u>Company Preferred Stock</u> "). As of December 29, 2010, (a) 75,000 shares of Company Common Stock were issued and outstanding, (b) no shares of Company Preferred Stock were issued and outstanding, and (c) no shares of Company Common Stock were held in treasury. All of the outstanding shares of capital stock of the Company (i) have been duly authorized, validly issued, and are fully paid and nonassessable, (ii) are, and when issued were, free of preemptive or similar rights and (iii) are owned (legally and beneficially) free and clear of any and all Liens, encumbrances, equities, and restrictions on transferability (other than those imposed by the Securities Act and the state securities or "Blue Sky" Laws) or voting. As of the date hereof, there are no shares of Company Common Stock authorized and reserved for issuance, the Company does not have any Rights issued or outstanding with respect to Company Stock, and the Company does not have any commitment to authorize, issue or sell any Company Stock or Rights, except pursuant to this Agreement. No options, warrants or other rights to purchase from the Company, agreements or other obligations of the Company to issue or other rights to convert any obligation into, or exchange any securities for, shares of capital stock of or ownership interests in the Company are outstanding; and, there is no agreement, understanding or arrangement among the Company and each of their respective stockholders or any other Person relating to the ownership or disposition of any capital stock of the Company or the election of directors or managers of the Company or the governance of the Company's affairs, and such agreements, understandings and arrangements, if any, will not be breached or violated as a result of the execution and delivery of, or the consummation of the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Subsidiaries</u> . The Company does not have any Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Company Financial Statements; No Undisclosed Liabilities</u> .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Company Financial Statements present fairly the consolidated financial position, assets and liabilities of the Company as of the dates thereof and the consolidated revenues, expenses, results of operations and cash flows of the Company for the periods covered thereby and changes in financial position of the Company as of the dates and for the periods covered thereby, in each case in conformity with GAAP applied consistently during such periods in accordance with the past accounting practices of the Company, subject (in the case only of any unaudited, interim financial statements included in the Company Financial Statements) to normal year-end audit adjustments required by the independent auditors of the Company in conformance with GAAP. The Company Financial Statements are in accordance with the books and records of the Company, do not reflect any transactions which are not bona fide transactions and do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements contained therein, in light of the circumstances in which they were made, not misleading.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The Company Financial Statements, including the notes thereto, make full and adequate disclosure of, and provision for, all material obligations and liabilities of the Company as of the dates thereof. The Company has no liabilities, debts, claims or obligations (including "off-balance sheet" liabilities, debts, claims or obligations), whether accrued, absolute, contingent or otherwise, and whether due or to become due, other than (i) as set forth in the latest balance sheet, (ii) trade payables and accrued expenses incurred in the ordinary course of business since the date of the latest balance sheet and (iii) liabilities incurred in connection with this Agreement or the transactions contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The Company has never paid a distribution to its stockholders in respect of their equity securities in the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Absence of Certain Changes</u> . Except as set forth in Section 4.2(h) of the Company Disclosure Schedule, since July 26, 2010, the business of the Company has been conducted in the ordinary course, consistent with past practice, and there has not been:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) any event, occurrence, development or state of circumstances or facts which has had or is reasonably likely to have a Material Adverse Effect on the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) any material event, occurrence, development or state of circumstances;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) any damage, destruction or loss to any assets or properties (whether or not covered by insurance) of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) any obligation or any Contract entered into which either (i) required a payment by any party in excess of, or a series of payments which in the aggregate exceed, $50,000 or provides for the delivery of goods or performance of services, or any combination thereof, having a value in excess of $50,000 or (ii) has a term, or requires the performance of any obligations by the Company over a period, in excess of six months;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) any sales, transfers, conveyances, assignments or other dispositions of any assets or properties of the Company, except sales of inventory in the ordinary course of business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) any waiver, release or cancellation of any claims against third parties or debts owing to the Company, or any rights which have any value;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) any transaction with an Affiliate of any stockholder of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) any authorization for issuance, sale, delivery or agreement or commitment to issue, sell or deliver (whether through the issuance or granting of options, warrants, convertible or exchangeable securities, commitments, subscriptions, rights to purchase or otherwise) any membership interests, shares of its capital stock or any other securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) any amendment of any term of any outstanding security of the Company or to the Company Certificate or Company Bylaws (or similar governing documents);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) any (A) incurrence, assumption or guarantee by the Company of any indebtedness for borrowed money, or (B) assumption, guarantee, endorsement or otherwise by the Company of any obligations of any other Person, in each case, other than in the ordinary course of business consistent with past practices;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11) any creation or assumption by the Company of any Lien on any asset other than in the ordinary course of business consistent with past practices, other than a Permitted Lien;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12) any capital expenditures authorized or made which individually or in the aggregate are in excess of $25,000;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(13) any declaration or payment of any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of the Company's capital stock, or redemption or acquisition of any securities of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(14) any making of any loans, advances or capital contributions to, or investments in, any other Person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(15) any making of any Tax election or any settlement or compromise of any federal, state, local or foreign Tax liability, or waiver or extension of the statute of limitations in respect of any such Taxes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(16) any change in any accounting policies or practices by the Company except as required by GAAP; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(17) any (A) employment, deferred compensation, severance, retirement or other similar agreement entered into with any director, officer, consultant, partner or employee of the Company (or any amendment to any such existing agreement), (B) grant or agreement to grant any severance or termination pay to any director, officer, consultant, partner or employee of the Company, or (C) change in compensation or other benefits payable to any director, officer, consultant, partner or employee of the Company, except, in each case, in the ordinary course of business, or as required by Contract or applicable law with respect to employees of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Contracts</u> .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) All Contracts have been entered into by the Company in the ordinary course of business and are on terms that are no less favorable to the Company than the terms which could be obtained from an unrelated third party and, if cancelled at any time, would not have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Each Contract is a valid and binding agreement of the Company, and is in full force and effect, and the Company is not in default or breach in any material respect under the terms of any such Contract.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The Company is not a party to nor is it bound by any Contract that would prevent, delay or impede the Company's ability to consummate the Merger or the other transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Compliance with Laws</u> . The Company:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) is in compliance in all material respects with all applicable federal, state, local and foreign statutes, laws, regulations, ordinances, rules, judgments, orders or decrees applicable to the conduct of its businesses or to the employees conducting such businesses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) has all material permits, licenses, authorizations, orders and approvals of, and has made all filings, applications and registrations with, all Governmental Authorities that are required in order to permit them to own or lease their properties and to conduct their businesses as presently conducted; all such permits, licenses, certificates of authority, orders and approvals are in full force and effect and are current and, to the Company's Knowledge, no suspension or cancellation of any of them is threatened or is reasonably likely and all such filings, applications and registrations are current;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) has received, since July 26, 2010, no written notification or communication (or, to the Knowledge of the Company, any other communication) from any Governmental Authority (A) asserting non-compliance with any of the statutes, regulations, rules or ordinances of such Governmental Authority, (B) threatening any material penalty or to revoke any license, franchise, permit, or governmental authorization, (C) requiring any of them (including any of the Company's directors or controlling persons) to enter into a cease and desist order, agreement, or memorandum of understanding (or requiring the board of directors thereof to adopt any resolution or policy), or (D) restricting or disqualifying their activities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) to the Company's Knowledge, is not aware of any pending or threatened investigation, review or disciplinary Proceedings by any Governmental Authority against the Company, or any officer, director or employee thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) in the conduct of its business with respect to employee benefit plans subject to Title I of ERISA, has not (A) breached any applicable fiduciary duty under Part 4 of Title I of ERISA which would subject it to material liability under Sections 405 or 409 of ERISA or (B) engaged in a "prohibited transaction" within the meaning of Section 406 of ERISA or Section 4975(c) of the Code which would subject it to material liability or Taxes under Sections 409 or 502(i) of ERISA or Section 4975(a) of the Code;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) since July 26, 2010, has timely filed all material reports, registrations and statements, together with any amendments required to be made with respect thereto, that were required to be filed under any applicable law, regulation or rule, with any applicable Governmental Authority (the " <u>Company Reports</u> "). As of their respective dates, the Company Reports complied with the applicable statutes, rules, regulations and orders enforced or promulgated by the regulatory authority with which they were filed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>Properties</u> . Except as may be reflected in the Company's Financial Statements dated before the date hereof, the Company has good and marketable title, free and clear of all Liens (other than Permitted Liens) to all of the material properties and assets, tangible or intangible, reflected in such Company Financial Statements as being owned by the Company as of the dates thereof. To the Company's Knowledge, all buildings and all the material fixtures, equipment, and other property and assets held under leases or subleases by any of the Company are held under valid leases or subleases, enforceable in accordance with their respective terms (except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and to general principles of equity).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>Taxes</u> .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Company has timely filed in a complete and correct manner all Tax Returns that they were required to file, other than any Tax Returns the failure to complete correctly or to file would not, individually or in the aggregate, have a Material Adverse Effect. The Company has paid all Taxes due, other than Taxes adequate reserves for which have been made in the Company Financial Statements and Taxes the failure to pay would not, individually or in the aggregate, have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) There are no claims or assessments pending against the Company for any alleged deficiency in any Tax, and the Company has not been notified in writing of any proposed Tax claims or assessments against the Company (other than, in each case, claims or assessments for which adequate reserves in the Company Financial Statements have been established and claims or assessments which would not, individually or in the aggregate, have a Material Adverse Effect).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) There are no Liens on any of the assets or properties of the Company that arose in connection with any failure (or alleged failure) to pay any Tax, except for statutory liens for current Taxes not yet due and payable (and except for Liens which would not, individually or in the aggregate, have a Material Adverse Effect).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) The Company (x) is not bound by any Tax allocation or Tax sharing agreement with a Person other than Acquiror which applies to U.S. federal or state income Taxes, or (y) has no liabilities under any Tax allocation or Tax sharing agreement (except for any liabilities which would not, individually or in the aggregate, have a Material Adverse Effect).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) <u>Litigation</u> .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) There are no Proceedings pending or, to the Company's Knowledge, threatened, against or affecting the Company or any of its respective officers, directors, managers, employees, agents, or stockholders thereof in their capacity as such, or any of the properties or businesses of the Company, and the Company is not aware of any facts or circumstances which may give rise to any of the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) There are no claims, actions, suits, proceedings or investigations pending or, to the Company's Knowledge, threatened, by or against the Company with respect to this Agreement, or in connection with the transactions contemplated hereby or thereby, and the Company has no reason to believe there is a valid basis for any such claim, action, suit, proceeding, or investigation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) <u>Employees; Labor Matters</u> .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Company is in compliance in all material respects with all currently applicable laws respecting employment and employment practices, terms and conditions of employment and wages and hours, including any such laws respecting employment discrimination, harassment, disability rights or benefits, equal opportunity, plant closure issues, affirmative action, workers' compensation, employee benefits, severance payments, labor relations, employee leave issues, wage and hour standards, occupational safety and health requirements and unemployment insurance and related matters. The Company is not engaged in any unfair labor practice and there is no unfair labor practice complaint pending or threatened against the Company before the National Labor Relations Board. There are no charges or complaints against the Company pending or, to the Company's Knowledge, threatened in writing alleging sexual or other harassment, or other discrimination or improper employment practices, by the Company or by any of their employees, agents or representatives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The Company is not a party to, or is bound by, any collective bargaining agreement, Contract or other agreement or understanding with any labor union or organization, nor has it agreed to recognize any union or other collective bargaining unit, nor has any union or other collective bargaining unit been certified, or is seeking certification, as representing any of the employees of the Company or.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The Company is and has been in substantial compliance with all notice and other requirements under the Worker Adjustment and Retaining Notification (" <u>WARN</u> ") or similar state statute. None of the employees of the Company have suffered an "employment loss" (as defined in WARN) during the 90-day period prior to the execution of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) <u>Intentionally Omitted</u> .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) <u>Environmental Matters</u> . The Company has complied in all respects with applicable Environmental Laws; no property (including buildings and any other structures) currently owned or operated by the Company or in which the Company has a Lien, is being or, to the Company's Knowledge, has been contaminated with, or has had any release of, any Hazardous Substance in such form or substance so as to create any liability for the Company; the Company is not subject to liability for any Hazardous Substance disposal or contamination on any other third-party property; within the last six years, the Company has not received any written notice, demand letter, claim or request for information alleging any violation of, or liability of the Company under, any Environmental Law; the Company is not subject to any written order, decree, injunction or other agreement with any Governmental Authority or any third party relating to any Environmental Law; the Company is not aware of or does not have any Knowledge of any facts that could lead to liability for handling or disposal of Hazardous Substances involving the Company, any currently owned or operated property (whether as fiduciary or otherwise), or any reasonably likely liability related to any Lien held by the Company; and the Company has made available to Acquiror copies of all environmental reports, studies, sampling data, correspondence, filings and other environmental information in its possession or reasonably available to it relating to the Company or any currently or formerly owned or operated property or any property in which the Company has held a Lien.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) <u>Intellectual Property</u> .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Company has a valid right to use all trademarks, service marks, trade names, Internet domain names, designs, logos, slogans, trade dress, trade names, corporate names and other source identifiers, and rights or general intangibles of like nature (collectively, " <u>Trademarks</u> "); Software (as defined below); technology, trade secrets and other confidential information, know-how, proprietary processes, formulae, formulations, algorithms, databases, models, and methodologies (collectively, " <u>Trade Secrets</u> ") used in the Company's business as currently conducted, except where the failure to do so would not constitute a Material Adverse Effect. The Company (i) owns or has the valid right to use all patents, patent applications and invention registrations of any kind (" <u>Patents</u> "), Trademarks, and registered and unregistered copyrights, and registrations and applications thereof (" <u>Copyrights</u> ") necessary for the conduct of the Company's business as currently conducted, except where the failure to do so would not constitute a Material Adverse Effect, and/or (ii) are validly licensed or authorized under third-party Patents, Trademarks, Trade Secrets and Copyrights necessary for the same. As used in this

Agreement, the term " <u>Intellectual Property</u> " means Patents, Copyrights, Trademarks, applications, applications for registration and registrations for any of the foregoing, and Trade Secrets; the term " <u>Company License Agreements</u> " means any agreements granting any right to use or practice any rights under any Intellectual Property (except for such agreements for Software already installed by the manufacturer before purchase on computers purchased by the Company, shrink-wrap or click-wrap software or other off-the-shelf products that are generally available for less than $10,000), and any written settlements relating to any Intellectual Property, to which the Company is a party or otherwise bound; and the term " <u>Software</u> " means any and all computer programs, including any and all software implementations of algorithms, models and methodologies, whether in source code or object code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) All Intellectual Property owned by the Company is free and clear of all Liens.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The Patents, Trademarks, Copyrights and Trade Secrets are owned by the Company and are valid and enforceable, in full force and effect, and to the extent such Intellectual Property is the subject of a registration or application, such Intellectual Property is subsisting and has not been canceled, expired, or abandoned. All necessary registration, maintenance and renewal fees currently due have been paid for the purposes of maintaining such Intellectual Property owned by the Company. There is no pending or, to the Company's Knowledge, threatened opposition, interference or cancellation Proceeding before any court or registration authority in any jurisdiction against any Intellectual Property of the Company, or, to the Company's Knowledge, against any Intellectual Property licensed to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) To the Company's Knowledge, the conduct of the Company's business as currently conducted, (including, without limitation, its activities, products, and services), does not infringe upon any Intellectual Property rights owned or controlled by any third party (either directly or indirectly such as through contributory infringement or inducement to infringe). There are no claims or suits pending or, to the Company's Knowledge, threatened against the Company, and the Company has not received any notice of a third party claim or suit against the Company (1) alleging that its past or present activities, products, services or the conduct of its businesses infringes or has infringed upon, violates, misappropriates, or constitutes the unauthorized use of the Intellectual Property rights of any third party or (2) challenging the ownership, use, validity or enforceability of any Intellectual Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) There are no settlements, forbearances to sue, consents, judgments, or orders or similar obligations to which the Company is bound which (1) restrict the Company's rights to use, transfer, license or enforce any Intellectual Property, (2) restrict the Company's business in order to accommodate a third party's Intellectual Property, or (3) permit third parties to use, or grant any third party any right with respect to any Intellectual Property owned by the Company. The Company has not licensed or sublicensed their rights in any Intellectual Property other than pursuant to the Company License Agreements, and no royalties, honoraria or other fees are payable by the Company for the use of or right to use any Intellectual Property licensed to the Company, except pursuant to the Company License Agreements. The Company License Agreements are valid and binding obligations of all parties thereto, enforceable in accordance with their terms subject only to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general principles of equity. Except as would not, individually or in the aggregate, have a Material Adverse Effect, the Company is in compliance with, and has not breached any term of any such Company License Agreement and, to the Company's Knowledge, all other parties to such Company License Agreements Contracts are in compliance with, and have not breached any term thereof. To the Company's Knowledge, there exists no event or condition which will result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default by the Company or any other party under any such Company License Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) To the Company's Knowledge, no Trade Secret of the Company has been disclosed or authorized to be disclosed to any third party other than pursuant to a non-disclosure agreement that protects the Company's proprietary interests in and to such Trade Secrets. Neither the Company nor, to the Company's Knowledge, any other party to any non-disclosure agreement relating to the Company's Trade Secrets is in breach or default thereof. The Company has taken commercially reasonable steps to protect their material Trade Secrets, and any Trade Secrets provided to the Company by a third party as a Trade Secret. The Company has taken commercially reasonable steps to maintain and protect the Company owned Intellectual Property currently used in the business. Without limiting the foregoing, the Company has taken commercially reasonable steps to require current or former employees, consultants and contractors of the Company that have created any material Company owned Intellectual Property to assign to the Company all of their right, title and interest in such Intellectual Property, and to the Company's Knowledge, no party to any such agreement is in breach thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) To the Company's Knowledge, no third party is misappropriating, infringing, diluting, or violating any Intellectual Property owned by the Company. Within the past five (5) years, no claims alleging any infringement, misappropriation or violation of any Intellectual Property owned by the Company have been brought, asserted or threatened against any third party by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) The consummation of the transactions contemplated hereby will not result in the loss or impairment of the Company's right to own or use any of the Intellectual Property, and will not require the consent of any Governmental Authority or third party in respect of any such Intellectual Property. The consummation of any of the transactions contemplated under this Agreement will neither violate nor by their terms result in the material breach, material modification, cancellation, termination, suspension of, or acceleration of any payments with respect to any Company License Agreements. To the Company's Knowledge, following the Closing Date, the Surviving Corporation shall be permitted to exercise all of the Company's rights under such Company License Agreements to the same extent the Company would have been able to had the transactions not occurred and without the payment of any additional amounts or consideration other than ongoing fees, royalties or payments which the Company would otherwise be required to pay.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) With respect to the Software which the Company purports to own, such Software was either developed (1) by employees of the Company within the scope of their employment; or (2) by independent contractors who have unconditionally assigned all of their rights in such Software and all copyrights in such Software to the Company pursuant to written agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) The Company has all requisite licenses to use any shrink-wrap or click-wrap software, other off-the-shelf products, or any other Software used by any of them in connection with their business, such licenses are valid, and the Company is not using any such products or Software where all requisite consideration has not been paid for the use thereof. To the Company's Knowledge, the Company is not in violation of any applicable law or any Contract or other agreement, arrangement or understanding regarding or in connection with such products or Software, and the Company has no payment obligations or other actual or potential liabilities related to or in connection with such products or Software.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) <u>Insurance</u> . All of the Company's policies are in full force and effect, all premiums with respect thereto covering all periods up to and including the date hereof have been paid, and no notice of cancellation or termination has been received with respect to any such policy. Such policies are sufficient for compliance with (i) all requirements of law and (ii) all Contracts to which the Company is a party, and are to the Company's Knowledge valid, outstanding and enforceable policies. Such insurance policies provide types and amounts of insurance customarily obtained by businesses similar to the business of the Company. The Company has not been refused any insurance with respect to its assets or operations, and its coverage has not been limited by any insurance carrier to which it has applied for any such insurance or with which it has carried insurance, during the last three years.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) <u>Brokers</u> . Except as set forth on Section 4.2(s) of the Company Disclosure Schedule, no action has been taken by the Company that would give rise to any valid claim against any party hereto for a brokerage commission, finder's fee or other like payment with respect to the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) <u>Tax Treatment</u> . As of the date hereof, the Company has no reason to believe that the Merger will not qualify as a "reorganization" within the meaning of Section 368(a) of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) <u>No Illegal Payments, Etc</u> . None of the Company, nor any of its directors, officers, employees or agents, has (a) directly or indirectly given or agreed to give any illegal gift, contribution, payment or similar benefit to any supplier, customer, governmental official or employee or other Person who was, is or may be in a position to help or hinder the Company (or assist in connection with any actual or proposed transaction) or made or agreed to make any illegal contribution, or reimbursed any illegal political gift or contribution made by any other Person, to any candidate for federal, state, local or foreign public office (i) which subjects any of the Company to any damage or penalty in any civil, criminal or governmental Proceeding or (ii) the non-continuation of which, in the case of (i) and (ii), has had or might have, individually or in the aggregate, a Material Adverse Effect or (b) established or maintained any unrecorded fund or asset or made any false entries on any books or records for any purpose.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>Completeness of Representations and Schedules</u> . The Company Disclosure Schedule and Exhibits hereto completely and correctly present in all material respects the information required by this Agreement. This Agreement, any Schedules and Exhibits to be delivered under this Agreement and the representations and warranties of this Section 4.2(v) and the documents and written information pertaining to the Company furnished to Acquiror and MergerCo do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make this Agreement, or such certificates, schedules, documents or written information, not misleading.

Section 4.3 <u>Representations and Warranties of Acquiror and MergerCo</u> . Except as set forth in the Acquiror Disclosure Schedule, each of Acquiror and MergerCo, as the case may be, hereby represents and warrants to the Company as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Organization, Standing and Authority</u> . Each of Acquiror and MergerCo is a corporation duly organized, validly existing and in good standing under the laws of the States of Nevada and Delaware, respectively, and is duly qualified or licensed to do business and is in good standing in all jurisdictions where ownership or leasing of property or assets or the conduct of business requires either to be so qualified or licensed, except for those jurisdictions in which failure to do so has not, or could not reasonably be expected to have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Corporate Power</u> . Acquiror and each of its Subsidiaries have all requisite corporate power and authority to own, lease and operate their respective properties and to carry on their respective businesses as they are now being owned, leased, operated and conducted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Corporate Authority</u> .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Each of Acquiror and MergerCo has the requisite corporate power and authority necessary to authorize the execution and delivery of, and performance of its obligations under, this Agreement and to consummate the transactions contemplated by this Agreement. The execution, delivery and performance by Acquiror and MergerCo of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by the Board of Directors of Acquiror (the " <u>Acquiror Board</u> "). This Agreement has been duly executed and delivered by Acquiror and MergerCo and is a valid and legally binding obligation of each of Acquiror and MergerCo, enforceable in accordance with its terms, subject only to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability related to or affecting creditors' rights and to general principles of equity. Approval of Acquiror's stockholders is not required for the Merger to become effective under the laws of Delaware or Nevada. The redomestication of Acquiror from Idaho to Nevada was conducted in accordance with all applicable laws and no Acquiror stockholder approval was required in connection with such redomestication.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The Acquiror Board has (i) determined that the Merger is advisable, fair to, and in the best interests of, Acquiror and its stockholders, and (ii) approved and adopted this Agreement, the Merger and the other transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Regulatory Filings; Consents; No Defaults</u> .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) No consents, approvals, orders or authorizations of, or filings, registrations, declarations or qualifications with, any Governmental Authority are required to be made or obtained by Acquiror in connection with the execution, delivery or performance by Acquiror and MergerCo of this Agreement, or to consummate the Merger, except for the filing of a Certificate of Merger with the Secretary of State of the State of Delaware and appropriate documents with the relevant authorities of other states in which Acquiror is qualified to do business. As of the date hereof, Acquiror has no Knowledge of any reason why the approvals of all Governmental Authorities necessary to permit consummation of the transactions contemplated by this Agreement will not be received.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) No consent by or approval or authorization of or notice to any other Person (other than a Governmental Authority) is required, whether under any material license or other material Contract or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The receipt of the approvals and consents referred to in Section 4.3(d)(1) and Section 4.3(d)(2), the expiration of applicable waiting periods and the making of all required filings under Securities Laws, the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby do not and will not: (A) constitute a breach or violation of, or a default under, or give rise to any Lien, any acceleration of remedies, any right of termination (with or without the giving of notice, passage of time or both) or any put or call right under, any law, rule or regulation or any judgment, decree, order, governmental or nongovernmental permit or license, or Contract of Acquiror or of any of its Subsidiaries or to which Acquiror or any of its Subsidiaries or its or their properties is subject or bound, (B) constitute a breach or violation of, or a default under, the certificate of incorporation or bylaws (or similar governing documents) of Acquiror or of any of its Subsidiaries, or (C) require any consent or approval under any such law, rule, regulation, judgment, decree, order, governmental or nongovernmental permit or license or Contract, except, in the case of clauses (A), (B) and (C), for any such conflict, violation, breach, default, loss, right, consent or approval or other occurrence which would not, or would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Acquiror Stock</u> . The authorized capital stock of Acquiror consists of 510,000,000 shares of capital stock, of which 500,000,000 shares are designated as Acquiror Common Stock, and 10,000,000 shares of preferred stock, $0.0001 par value per share (the " <u>Acquiror Preferred Stock</u> " and together with the Acquiror Common Stock, the " <u>Acquiror Stock</u> "). As of December 29, 2010, (a) 20,955,199 shares of Acquiror Common Stock were issued and outstanding, (b) no shares of Acquiror Preferred Stock were issued and outstanding, (c) no shares of Acquiror Common Stock were reserved for issuance upon the exercise of options, (d) no warrants to purchase shares of Acquiror Common Stock are outstanding, and (e) no shares of Acquiror Common Stock were held in treasury. The outstanding shares of Acquiror Common Stock have been duly authorized and are validly issued and outstanding, fully paid and nonassessable, and subject to no preemptive or anti-dilution rights (and were not issued in violation of any subscriptive or preemptive rights). As of the date hereof, there are no shares of Acquiror Common Stock authorized and reserved for issuance, Acquiror does not have any Rights issued or outstanding with respect to Acquiror Stock, and Acquiror does not have any commitment to authorize, issue or sell any Acquiror Stock or Rights as a result of this Agreement or otherwise, except pursuant to this Agreement. Except as set forth in Section 4.3(e) of the Acquiror Disclosure Schedule, no options, warrants or other rights to purchase from Acquiror or any Subsidiary, agreements or other obligations of Acquiror or any Subsidiary to issue or other rights to convert any obligation into, or exchange any securities for, shares of capital stock of or ownership interests in Acquiror or any Subsidiary are outstanding; and, there is no agreement, understanding or arrangement among Acquiror or any Subsidiary and each of their respective stockholders or members or any other Person relating to the ownership or disposition of any capital stock of Acquiror or any Subsidiary or the election of directors of Acquiror or any Subsidiary or the governance of Acquiror's or any Subsidiary's affairs, and such agreements, understandings and arrangements, if any, will not be breached or violated as a result of the execution and delivery of, or the consummation of the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Subsidiaries</u> . Set forth in Section 4.3(f) of the Acquiror Disclosure Schedule is a list of all its direct and indirect subsidiaries, including the states in which such subsidiaries are organized and the percentage owned by Acquiror or any such subsidiary and the names and percentage ownership by any other Person. No equity securities of any of Acquiror's subsidiaries are or may become required to be issued, transferred or otherwise disposed of (other than to Acquiror or a wholly-owned subsidiary of Acquiror) by reason of any Rights with respect thereto. There are no Contracts by which any of Acquiror's Subsidiaries is or may be bound to sell or otherwise issue any shares of its capital stock, and there are no Contracts relating to the rights or obligations of Acquiror to vote or to dispose of such shares. All of the shares of capital stock of each of Acquiror's subsidiaries are fully paid and nonassessable and subject to no subscriptive or preemptive rights or Rights and are owned by Acquiror or an Acquiror Subsidiary free and clear of any Liens.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>SEC Documents; Financial Statements</u> .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Since January 1, 2009, Acquiror and its Subsidiaries have filed all reports, registrations, and statements they were required to file with the SEC under the Securities Act, or under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, including, but not limited to Acquiror's Annual Reports on Form 10-K, Form 10-Q, Form 8-K, registration statements, definitive proxy statements, and information statements (collectively, the " <u>Acquiror SEC Documents</u> "). Acquiror has provided or made available via EDGAR to the Company copies of the Acquiror SEC Documents, each in the form (including exhibits and any amendments thereto) filed with the SEC (or, if not so filed, in the form used or circulated). As of their respective dates (and without giving effect to any amendments or modifications filed after the date of this Agreement) each of the Acquiror SEC Documents, including the Acquiror Financial Statements, exhibits, and schedules thereto, filed or circulated prior to the date hereof complied (and each of the Acquiror SEC Documents filed prior to the Merger will materially comply) as to form with applicable Securities Laws and did not (or, in the case of reports, statements, or circulars filed after the date of this Agreement, will not) contain any untrue statement of a material fact or omit to state a material fact required to be stated or incorporated by reference therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Each of Acquiror's and Acquiror's Subsidiaries' consolidated and separate financial statements or balance sheets included in or incorporated by reference into the Acquiror SEC Documents, including the related notes and schedules, fairly presented (or, in the case of Acquiror SEC Documents filed after the date of this Agreement), will fairly present the consolidated and separate financial condition of Acquiror and its Subsidiaries as of the date of such statement of financial condition or balance sheet and each of the consolidated and separate statements of income, cash flows and changes in stockholders' equity included in or incorporated by reference into the Acquiror SEC Documents, including any related notes and schedules (collectively, the foregoing financial statements and related notes and schedules are referred to as the " <u>Acquiror Financial Statements</u> "), fairly presented (or, in the case of Acquiror SEC Documents filed after the date of this Agreement and prior to the Merger, will fairly present) the separate and consolidated results of operations, cash flows and stockholders' equity, as the case may be, of Acquiror and its Subsidiaries for the periods set forth therein (subject, in the case of unaudited statements, to normal year-end audit adjustments), in each case in accordance with GAAP consistently applied during the periods involved (except as may be noted therein and except that such unaudited statements include no notes).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Except as disclosed in the Acquiror Financial Statements or as set forth in Section 4.3(g) of the Acquiror Disclosure Schedule, none of Acquiror or any of its Subsidiaries has any liability or obligation of any nature (whether accrued, absolute, contingent or otherwise) whether or not required to be recorded or reflected by GAAP to be set forth on a consolidated balance sheet of Acquiror and its consolidated subsidiaries or in the notes thereto, other than liabilities or obligations incurred in the ordinary course of business consistent with past practice since the date of the most recent Acquiror Financial Statements included in the Acquiror SEC Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Absence of Certain Changes</u> . Since June 30, 2010, the business of Acquiror and its Subsidiaries has been conducted in the ordinary course, consistent with past practice, and there has not been:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) any event, occurrence, development or state of circumstances or facts which has had or is reasonably likely to have a Material Adverse Effect on Acquiror and any of its Subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) any material event, occurrence, development or state of circumstances;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) any damage, destruction or loss to any assets or properties (whether or not covered by insurance) of Acquiror or any of its Subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) any obligation or any Contract entered into which either (i) required a payment by any party in excess of, or a series of payments which in the aggregate exceed, $25,000 or provides for the delivery of goods or performance of services, or any combination thereof, having a value in excess of $25,000 or (ii) has a term, or requires the performance of any obligations by Acquiror or any Subsidiary over a period, in excess of six months;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) any sales, transfers, conveyances, assignments or other dispositions of any assets or properties of Acquiror or any of its Subsidiaries, except sales of inventory in the ordinary course of business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) any waiver, release or cancellation of any claims against third parties or debts owing to Acquiror or any of its Subsidiaries, or any rights which have any value;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) any transaction with an Affiliate of any stockholder or any member of Acquiror or any of its Subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) any authorization for issuance, sale, delivery or agreement or commitment to issue, sell or deliver (whether through the issuance or granting of options, warrants, convertible or exchangeable securities, commitments, subscriptions, rights to purchase or otherwise) any membership interests, shares of its capital stock or any other securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) any amendment of any term of any outstanding security of Acquiror or any of its Subsidiaries or to Acquiror's or any of its Subsidiaries' certificate of incorporation or bylaws (or similar governing documents);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) any (A) incurrence, assumption or guarantee by Acquiror or any of its Subsidiaries of any indebtedness for borrowed money, or (B) assumption, guarantee, endorsement or otherwise by Acquiror of any obligations of any other Person, in each case, other than in the ordinary course of business consistent with past practices;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11) any creation or assumption by Acquiror or any of its Subsidiaries of any Lien on any asset other than in the ordinary course of business consistent with past practices, other than a Permitted Lien;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12) any capital expenditures authorized or made which individually or in the aggregate are in excess of $25,000;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(13) any declaration or payment of any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of Acquiror's or any of its Subsidiaries capital stock or membership interests, or redemption or acquisition of any securities of Acquiror or any of its Subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(14) any making of any loans, advances or capital contributions to, or investments in, any other Person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(15) any making of any Tax election or any settlement or compromise of any federal, state, local or foreign Tax liability, or waiver or extension of the statute of limitations in respect of any such Taxes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(16) any change in any accounting policies or practices by Acquiror or any of its Subsidiaries except as required by GAAP; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(17) any (A) employment, deferred compensation, severance, retirement or other similar agreement entered into with any director, officer, consultant, partner or employee of Acquiror or any of its Subsidiaries (or any amendment to any such existing agreement), (B) grant or agreement to grant any severance or termination pay to any director, officer, consultant, partner or employee of Acquiror or any of its Subsidiaries, or (C) change in compensation or other benefits payable to any director, officer, consultant, partner or employee of Acquiror or any of its Subsidiaries, except, in each case, in the ordinary course of business, or as required by Contract or applicable law with respect to employees of Acquiror or any of its Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Contracts</u> .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Except for this Agreement and except for Contracts filed in unredacted form as exhibits to the Acquiror SEC Documents, none of Acquiror or its Subsidiaries is a party to or bound by any Contract: (i) that would be required to be filed by Acquiror as a "material contract" pursuant to Item 601(b)(10) of Regulation S-K under the Securities Act; (ii) containing covenants binding upon Acquiror or its Subsidiaries that restrict the ability of Acquiror or any of its Subsidiaries (or which, following the consummation of the Merger, would materially restrict the ability of the Surviving Corporation or its Affiliates) to compete in any business or geographic area; or (iii) that would prevent, materially delay or materially impede Acquiror's ability to consummate the Merger or the other transactions contemplated by this Agreement. Each such Contract described in clauses (i) through (iii) is referred to herein as an " <u>Acquiror Material Contract</u> ".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Each of the Acquiror Material Contracts is valid and binding on Acquiror or its Subsidiaries, as the case may be, and, to the Acquiror's Knowledge, each other party thereto and is in full force and effect, except for such failures to be valid and binding or to be in full force and effect as would not, or would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect. There is no default under any Acquiror Material Contract by Acquiror or its Subsidiaries and no event has occurred that with the lapse of time or the giving of notice or both would constitute a default thereunder by Acquiror or its Subsidiaries, in each case except as would not, or would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Litigation</u> .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Except as set forth in Section 4.3(j) of the Acquiror Disclosure Schedule, there are no Proceedings pending or, to the Acquiror's Knowledge, threatened, against or affecting Acquiror or any Subsidiary or any of their respective officers, directors, managers, employees, agents, members or stockholders thereof in their capacity as such, or any of the properties or businesses of Acquiror or any Subsidiary, and neither Acquiror nor any Subsidiary is aware of any facts or circumstances which may give rise to any of the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) There are no claims, actions, suits, proceedings or investigations pending or, to the Acquiror's Knowledge, threatened, by or against Acquiror or any Subsidiary with respect to this Agreement, or in connection with the transactions contemplated hereby or thereby, and neither Acquiror nor any Subsidiary has any reason to believe there is a valid basis for any such claim, action, suit, proceeding, or investigation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>Compliance with Laws</u> . Each of Acquiror and its Subsidiaries:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) is in compliance in all material respects with all applicable federal, state, local and foreign statutes, laws, regulations, ordinances, rules, judgments, orders or decrees applicable to the conduct of its businesses or to the employees conducting such businesses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) has all material permits, licenses, authorizations, orders and approvals of, and has made all filings, applications and registrations with, all Governmental Authorities that are required in order to permit them to own or lease their properties and to conduct their businesses as presently conducted; all such permits, licenses, certificates of authority, orders and approvals are in full force and effect and are current and, to Acquiror's Knowledge, no suspension or cancellation of any of them is threatened or is reasonably likely and all such filings, applications and registrations are current;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) has received, since January 1, 2009, no written notification or communication (or, to the Knowledge of Acquiror, any other communication) from any Governmental Authority (A) asserting non-compliance with any of the statutes, regulations, rules or ordinances of such Governmental Authority, (B) threatening any material penalty or to revoke any license, franchise, permit, or governmental authorization, (C) requiring any of them (including any of Acquiror's or its Subsidiaries' directors or controlling persons) to enter into a cease and desist order, agreement, or memorandum of understanding (or requiring the board of directors thereof to adopt any resolution or policy), or (D) restricting or disqualifying their activities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) to the Acquiror's Knowledge, is not aware of any pending or threatened investigation, review or disciplinary Proceedings by any Governmental Authority against Acquiror, any of its Subsidiaries or any officer, director or employee thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) in the conduct of its business with respect to employee benefit plans subject to Title I of ERISA, has not (A) breached any applicable fiduciary duty under Part 4 of Title I of ERISA which would subject it to material liability under Sections 405 or 409 of ERISA or (B) engaged in a "prohibited transaction" within the meaning of Section 406 of ERISA or Section 4975(c) of the Code which would subject it to material liability or Taxes under Sections 409 or 502(i) of ERISA or Section 4975(a) of the Code;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) since January 1, 2009, has timely filed all material reports, registrations and statements, together with any amendments required to be made with respect thereto, that were required to be filed under any applicable law, regulation or rule, with any applicable Governmental Authority (the " <u>Acquiror Reports</u> "). As of their respective dates, the Acquiror Reports complied with the applicable statutes, rules, regulations and orders enforced or promulgated by the regulatory authority with which they were filed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>Properties</u> . Except as may be reflected in the Acquiror Financial Statements dated before the date hereof, Acquiror and its Subsidiaries have good and marketable title, free and clear of all Liens (other than Permitted Liens) to all of the material properties and assets, tangible or intangible, reflected in such Acquiror Financial Statements as being owned by Acquiror and its Subsidiaries as of the dates thereof. To Acquiror's Knowledge, all buildings and all the material fixtures, equipment, and other property and assets held under leases or subleases by any of Acquiror and its Subsidiaries are held under valid leases or subleases, enforceable in accordance with their respective terms (except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and to general principles of equity). Set forth in Section 4.3(l) of the Acquiror Disclosure Schedule is a list of any and all real estate owned or leased by Acquiror or any Subsidiary as of the date hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) <u>Employees; Labor Matters</u> .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Each of Acquiror and its Subsidiaries is in compliance in all material respects with all currently applicable laws respecting employment and employment practices, terms and conditions of employment and wages and hours, including any such laws respecting employment discrimination, harassment, disability rights or benefits, equal opportunity, plant closure issues, affirmative action, workers' compensation, employee benefits, severance payments, labor relations, employee leave issues, wage and hour standards, occupational safety and health requirements and unemployment insurance and related matters. None of Acquiror nor any of its Subsidiaries is engaged in any unfair labor practice and there is no unfair labor practice complaint pending or threatened against Acquiror or any of its Subsidiaries before the National Labor Relations Board. There are no charges or complaints against Acquiror or any of its Subsidiaries pending or, to the Acquiror's Knowledge, threatened in writing alleging sexual or other harassment, or other discrimination or improper employment practices, by Acquiror, any of its Subsidiaries or by any of their employees, agents or representatives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Neither Acquiror nor any of its Subsidiaries is a party to, or is bound by, any collective bargaining agreement, Contract or other agreement or understanding with any labor union or organization, nor has it agreed to recognize any union or other collective bargaining unit, nor has any union or other collective bargaining unit been certified, or is seeking certification, as representing any of the employees of Acquiror or any of its Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Acquiror and its Subsidiaries are and have been in substantial compliance with all notice and other requirements under WARN and similar state statutes. No employee of Acquiror or its Subsidiaries has suffered an "employment loss" (as defined in WARN and similar state statutes) during the 90-day period prior to the execution of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) <u>Employee Benefit Plans</u> .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Set forth in Section 4.3(n) of the Acquiror Disclosure Schedule is a complete list of each employee or director benefit plan, arrangement or agreement, whether or not written, including without limitation any employee welfare benefit plan within the meaning of Section 3.1 of ERISA, any employee pension benefit plan within the meaning of Section 3.2 of ERISA (whether or not such plan is subject to ERISA) and any bonus, incentive, deferred compensation, vacation, stock purchase, stock option, severance, employment, change of control or material fringe benefit plan, program or agreement that is sponsored, maintained or contributed to by Acquiror or any of its Subsidiaries, or with respect to which Acquiror has or reasonably could incur any liability, for the benefit of current or former employees or directors or their beneficiaries (the " <u>Acquiror Benefit Plans</u> ").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Acquiror has heretofore made available to the Company (A) true and complete copies of each of the Acquiror Benefit Plans (or written explanations of any unwritten Acquiror Benefit Plans) as in effect on the date hereof and amendments thereto, including summary plan descriptions; (B) the three most recent Annual Reports (Form 5500 Series) and accompanying schedules, if any; and (C) the most recent determination or opinion letter from the IRS (if applicable) for such Acquiror Benefit Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) With respect to each Acquiror Benefit Plan, Acquiror and its Subsidiaries have complied, and are now in compliance, in all material respects with all provisions of ERISA, the Code and all laws and regulations applicable to such Acquiror Benefit Plans and each Acquiror Benefit Plan has been administered in all material respects in accordance with its terms. The IRS has issued a favorable determination or opinion letter with respect to each Acquiror Benefit Plan that is intended to be a "qualified plan" within the meaning of Section 401(a) of the Code that has not been revoked, and, to the Acquiror's Knowledge, no circumstances exist and no events have occurred that could reasonably be expected to adversely affect the qualified status of any such plan or the related trust (except for changes in applicable law for which the remedial amendment period has not yet expired). No Acquiror Benefit Plan is intended to meet the requirements of Code Section 501(c)(9).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) All contributions required to be made by Acquiror to any Acquiror Benefit Plan by applicable law or regulation or by any plan document or other contractual undertaking, and all premiums due or payable with respect to insurance policies funding any Plan, for any period through the date hereof have been timely made or paid in full or, to the extent not required to be made or paid on or before the date hereof, have been reflected on the Acquiror Financial Statements. Each Acquiror Benefit Plan, if any, that is an employee welfare benefit plan under Section 3(1) of ERISA is either (A) funded through an insurance company Contract and is not a "welfare benefit fund" within the meaning of Section 419 of the Code or (B) unfunded.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) There is no pending or, to the Acquiror's Knowledge, threatened Proceedings relating to the Acquiror Benefit Plans. Neither Acquiror nor any of its Subsidiaries has engaged in a transaction with respect to any Acquiror Benefit Plan that would subject Acquiror or any of its Subsidiaries to a material Tax or penalty imposed by either Section 4975 of the Code or Section 502(i) of ERISA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) No Acquiror Benefit Plan is subject to Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code, and neither Acquiror nor any of its Subsidiaries has contributed or been obligated to contribute to a "multiemployer plan" (as defined in Section 3(37) of ERISA) or a plan that has two or more contributing, but unrelated, sponsors and that is subject to Title IV of ERISA at any time on or after December 31, 1994. No liability under Subtitle C or D of Title IV of ERISA has been or is reasonably expected to be incurred by Acquiror or any of its Subsidiaries with respect to any ongoing, frozen or terminated "single-employer plan," within the meaning of Section 4001 of ERISA, currently or formerly maintained by any of them, or the single-employer plan of any entity which is considered one employer with Acquiror under Section 4001 of ERISA or Section 414 of the Code (an " <u>Acquiror ERISA Affiliate</u> "). No notice of a "reportable event," within the meaning of Section 4043 of ERISA, for which the 30-day reporting requirement has not been waived has been required to be filed for any Acquiror Benefit Plan or, to the Acquiror's Knowledge, by any Acquiror ERISA Affiliate. Neither Acquiror nor any of its Subsidiaries or Acquiror ERISA Affiliates has provided, or is required to provide, security to any Benefit Plan or any single-employer plan of an Acquiror ERISA Affiliate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) Neither Acquiror nor any of its Subsidiaries has any obligation for retiree health, life or other welfare benefits, except for benefits and coverage required by applicable law, including, without limitation, Section 4980B of the Code and Part 6 of Title I of ERISA. There are no restrictions on the rights of Acquiror or any of its Subsidiaries to amend or terminate any such plan (other than reasonable and customary advance notice and consent requirements and administrative expenses) without incurring any material liability thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby (either standing alone or in conjunction with any other event) will (A) result in any payment (including severance, unemployment compensation, "excess parachute" (within the meaning of Section 4999 of the Code), forgiveness of indebtedness or otherwise) becoming due to any director or any employee of Acquiror or any of its Subsidiaries under any Acquiror Benefit Plan, (B) increase any benefits otherwise payable under any Acquiror Benefit Plan, (C) result in any acceleration of the time of payment or vesting of any such benefit, or (D) affect in any way the ability to amend, terminate, merge or administer any Acquiror Benefit Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) Acquiror does not maintain an Acquiror Benefit Plan or other arrangement that is subject to Section 409A of the Code, and each Acquiror Benefit Plan that is a nonqualified deferred compensation plan subject to Section 409A of the Code has been operated and administered in good faith compliance with Section 409A of the Code since January 1, 2005.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) Acquiror has not granted any awards intended to constitute performance-based compensation not subject to the deduction limit under Section 162(m) of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) <u>Environmental Matters</u> . Acquiror and its Subsidiaries have complied in all respects with applicable Environmental Laws; no property (including buildings and any other structures) currently owned or operated by Acquiror or any of its Subsidiaries or in which Acquiror or any of its Subsidiaries (whether as fiduciary or otherwise) has a Lien, is being or, to Acquiror's Knowledge, has been contaminated with, or has had any release of, any Hazardous Substance in such form or substance so as to create any liability for Acquiror or any of its Subsidiaries; Acquiror and its Subsidiaries are not subject to liability for any Hazardous Substance disposal or contamination on any other third-party property; within the last six years Acquiror and its Subsidiaries have not received any written notice, demand letter, claim or request for information alleging any violation of, or liability of Acquiror or any of its Subsidiaries under, any Environmental Law; Acquiror and its Subsidiaries are not subject to any written order, decree, injunction or other agreement with any Governmental Authority or any third party relating to any Environmental Law; Acquiror and its Subsidiaries are not aware of or do not have any Knowledge of any facts that could lead to liability for handling or disposal of Hazardous Substances involving Acquiror or any of its Subsidiaries, any currently owned or operated property (whether as fiduciary or otherwise), or any reasonably likely liability related to any Lien held by Acquiror or any of its Subsidiaries; and Acquiror and its Subsidiaries have made available to the Company copies of all environmental reports, studies, sampling data, correspondence, filings and other environmental information in its possession or reasonably available to it relating to Acquiror or any currently or formerly owned or operated property or any property in which Acquiror or any of its Subsidiaries (whether as fiduciary or otherwise) has held a Lien.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) <u>Intellectual Property</u> .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Acquiror and its Subsidiaries have a valid right to use all Trademarks; Software; Trade Secrets (each as defined in Section 4.2(q) above) used in Acquiror's and each Subsidiary's business as currently conducted, except where the failure to do so would not constitute a Material Adverse Effect. Acquiror or its Subsidiaries either (i) own or have the valid right to use all Patents, Trademarks, and Copyrights necessary for the conduct of Acquiror's and each of its Subsidiaries' businesses as currently conducted, except where the failure to do so would not constitute a Material Adverse Effect, and/or (ii) are validly licensed or authorized under third-party Patents, Trademarks, Trade Secrets, and Copyrights necessary for the same. As used in this Agreement, the term " <u>Acquiror License Agreements</u> " means any agreements granting any right to use or practice any rights under any Intellectual Property (except for such agreements for Software already installed by the manufacturer before purchase on computers purchased by Acquiror, shrink-wrap or click-wrap software or other off-the-shelf products that are generally available for less than $10,000), and any written settlements relating to any Intellectual Property, to which Acquiror or any of its Subsidiaries is a party or otherwise bound.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Section 4.3(p)(2) of the Acquiror Disclosure Schedule sets forth, for the Intellectual Property owned and maintained by Acquiror and its Subsidiaries, a complete and accurate list of all U.S. and foreign (1) Patents and patent applications; (2) issued and pending Trademark registrations (including Internet domain name registrations for any domain on which any Acquiror or Subsidiary website is located) and applications and material unregistered Trademarks; and (3) Copyright registrations and applications, and material unregistered Copyrights, and (4) material Trade Secrets, indicating for each item of registered Intellectual Property and for each application to register Intellectual Property, the person or entity in whose name the registration is held, the applicable jurisdiction, registration number (or application number), date issued (or date filed) and current status. Section 4.3(p)(2) of the Acquiror Disclosure Schedule sets forth a complete and accurate list of all third party Software that is incorporated in any Software sold, licensed, leased or otherwise distributed by or used in the course of rendering services offered by Acquiror or any of its Subsidiaries, indicating for each the title and owner/licensor of the Software.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) All Intellectual Property owned by Acquiror and its Subsidiaries is free and clear of all Liens.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) The Patents, Trademarks, Copyrights and Trade Secrets owned by Acquiror or any of its Subsidiaries set forth in Section 4.3(p)(2) of the Acquiror Disclosure Schedule are valid and enforceable, in full force and effect, and to the extent such Intellectual Property is the subject of a registration or application (as described in Section 4.3(p)(2)), such Intellectual Property is subsisting and has not been canceled, expired, or abandoned. All necessary registration, maintenance and renewal fees currently due have been paid for the purposes of maintaining such Intellectual Property owned by the Acquiror or any of its Subsidiaries. There is no pending or, to the Acquiror's Knowledge, threatened opposition, interference or cancellation Proceeding before any court or registration authority in any jurisdiction against any of the items listed in Section 4.3(p)(2) of the Acquiror Disclosure Schedule, or, to the Acquiror's Knowledge, against any Intellectual Property licensed to Acquiror or its Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) To Acquiror's Knowledge, the conduct of Acquiror's and its Subsidiaries' business as currently conducted (including, without limitation, its activities, products and services) does not infringe upon any Intellectual Property rights owned or controlled by any third party (either directly or indirectly such as through contributory infringement or inducement to infringe). Section 4.3(p)(5) of the Acquiror Disclosure Schedule lists all U.S. and foreign patents concerning which: (i) Acquiror has obtained or requested written opinion of counsel; or (ii) Acquiror has received (y) written allegation or notice of infringement or (z) a license offer outside the ordinary course of business. There are no claims or suits pending or, to the Acquiror's Knowledge, threatened against Acquiror or any of its Subsidiaries, and neither Acquiror nor any of its Subsidiaries has received any notice of a third party claim or suit against Acquiror or any of its Subsidiaries (1) alleging that its past or present activities, products, services or the conduct of its businesses infringes or has infringed upon, violates, misappropriates or constitutes the unauthorized use of the Intellectual Property rights of any third party or (2) challenging the ownership, use, validity or enforceability of any Intellectual Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) There are no settlements, forbearances to sue, consents, judgments, or orders or similar obligations to which Acquiror or any of its Subsidiaries are bound which (1) restrict Acquiror's or its Subsidiaries' rights to use, transfer, license or enforce any Intellectual Property, (2) restrict Acquiror's or its Subsidiaries' business in order to accommodate a third party's Intellectual Property or (3) permit third parties to use, or grant any third party any right with respect to any Intellectual Property owned by Acquiror or any of its Subsidiaries. Acquiror and its Subsidiaries have not licensed or sublicensed their rights in any Intellectual Property other than pursuant to the Acquiror License Agreements, and no royalties, honoraria or other fees are payable by Acquiror or its Subsidiaries for the use of or right to use any Intellectual Property licensed to Acquiror or its Subsidiaries, except pursuant to the Acquiror License Agreements. The Acquiror License Agreements are valid and binding obligations of all parties thereto, enforceable in accordance with their terms subject only to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general principles of equity. Except as would not, individually or in the aggregate, have a Material Adverse Effect, each of the Acquiror and its Subsidiaries is in compliance with, and has not breached any term of any such Acquiror License Agreement and, to the Acquiror's Knowledge, all other parties to such Acquiror License Agreements Contracts are in compliance with, and have not breached any term thereof. To Acquiror's Knowledge, there exists no event or condition which will result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default by Acquiror or any other party under any such Acquiror License Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) To Acquiror's Knowledge, no Trade Secret of Acquiror or its Subsidiaries has been disclosed or authorized to be disclosed to any third party other than pursuant to a non-disclosure agreement that protects Acquiror and the applicable Subsidiary's proprietary interests in and to such Trade Secrets. Neither Acquiror nor, to the Acquiror's Knowledge, any other party to any non-disclosure agreement relating to Acquiror's Trade Secrets is in breach or default thereof. The Company and its Subsidiaries have taken commercially reasonable steps to protect their material Trade Secrets, and any Trade Secrets provided to the Company or any Subsidiary by a third party as a Trade Secret. Acquiror and its Subsidiaries have taken commercially reasonable steps to maintain and protect the material Acquiror owned Intellectual Property currently used in the business. Without limiting the foregoing, each of Acquiror and its Subsidiaries has taken commercially reasonable steps to require current or former employees, consultants and contractors of Acquiror or any Subsidiary that have created any material Acquiror owned Intellectual Property to assign to Acquiror or its Subsidiaries all of their right, title and interest in such Intellectual Property, and to Acquiror's Knowledge, no party to any such agreement is in breach thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) To Acquiror's Knowledge, no third party is misappropriating, infringing, diluting, or violating any Intellectual Property owned by Acquiror or any of its Subsidiaries. Except as set forth in Section 4.3(p)(8) of the Acquiror Disclosure Schedule, within the past five years, no claims alleging any infringement, misappropriation or violation of any Intellectual Property owned by the Acquiror or any of its Subsidiaries have been brought, asserted or threatened against any third party by Acquiror or any of its Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) The consummation of the transactions contemplated hereby will not result in the loss or impairment of Acquiror's or any of its Subsidiaries' right to own or use any of the Intellectual Property, and will not require the consent of any Governmental Authority or third party in respect of any such Intellectual Property. The consummation of any of the transactions contemplated under this Agreement will neither violate nor by their terms result in the material breach, material modification, cancellation, termination, suspension of, or acceleration of any payments with respect to any material Acquiror License Agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) Section 4.3(p)(10) of the Acquiror Disclosure Schedule lists all Software sold, licensed, leased or otherwise distributed by or used in the services offered by Acquiror or any of its Subsidiaries to any third party, and identifies which Software is sold, licensed, leased, or otherwise distributed, or used, as the case may be. With respect to the Software set forth in Schedule 4.3(p)(10) which Acquiror or any of its Subsidiaries purports to own, such Software was either developed (1) by employees of Acquiror or any of its Subsidiaries within the scope of their employment; or (2) by independent contractors who have unconditionally assigned all of their rights in such Software and all copyrights in the Software to Acquiror or any of its Subsidiaries pursuant to written agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11) Acquiror and each of its Subsidiaries have all requisite licenses to use any shrink-wrap or click-wrap software, other off-the-shelf products, or any other Software used by any of them in connection with their business, such licenses are valid, and neither Acquiror nor any Subsidiary is using any such products or Software where all requisite consideration has not been paid for the use thereof. To Acquiror's Knowledge, neither Acquiror nor any of its Subsidiaries is in violation of any applicable law or any Contract or other agreement, arrangement or understanding regarding or in connection with such products or Software, and neither Acquiror nor any of its Subsidiaries has any payment obligations or other actual or potential liabilities related to or in connection with such products or Software.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) <u>Insurance</u> . Section 4.3(q) of the Acquiror Disclosure Schedule sets forth a true, accurate and complete list of all policies of fire, liability, workmen's compensation, title and other forms of insurance owned, held by or applicable to Acquiror or any Subsidiary (and their respective businesses and assets), and Acquiror has delivered to the Company a true, accurate and complete copy of all such policies, including all occurrence-based policies applicable to Acquiror or any Subsidiary (and their respective businesses and assets) for all periods prior to the date hereof. All such policies are in full force and effect, all premiums with respect thereto covering all periods up to and including the date hereof have been paid, and no notice of cancellation or termination has been received with respect to any such policy. Such policies are sufficient for compliance with (i) all requirements of law and (ii) all Contracts to which Acquiror or any Subsidiary is a party, and are, to Acquiror's Knowledge, valid, outstanding and enforceable policies. Such insurance policies provide types and amounts of insurance customarily obtained by businesses similar to the business of Acquiror and the Subsidiaries. Except as set forth in Section 4.3(q) of Acquiror Disclosure Schedule, neither Acquiror nor any Subsidiary has been refused any insurance with respect to its assets or operations, and its coverage has not been limited by any insurance carrier to which it has applied for any such insurance or with which it has carried insurance, during the last three years. Section 4.3(q) of Acquiror Disclosure Schedule sets forth a true, accurate and complete list of all claims that have been made by Acquiror or any Subsidiary within the past three years under its insurance policies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) <u>Brokers</u> . No action has been taken by Acquiror or any Subsidiary that would give rise to any valid claim against any party hereto for a brokerage commission, finder's fee or other like payment with respect to the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) <u>Activities of MergerCo</u> . MergerCo is a direct, wholly-owned subsidiary of Acquiror, and MergerCo does not have any Subsidiaries or investments of any kind in any entity. MergerCo was incorporated on December 22, 2010 on behalf of Acquiror solely for purposes of accomplishing the Merger, has not engaged in any other business activity, has no liabilities and has conducted its operations only as contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) <u>Validity of Acquiror Common Stock</u> . The shares of Acquiror Common Stock to be issued to the holders of Company Common Stock as part of the Merger Consideration will be, when issued, duly authorized, validly issued, fully paid and nonassessable and not in violation of any preemptive rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) <u>No Illegal Payments, Etc</u> . None of Acquiror or any of its Subsidiaries, nor any of their directors, officers, employees or agents, has (a) directly or indirectly given or agreed to give any illegal gift, contribution, payment or similar benefit to any supplier, customer, governmental official or employee or other Person who was, is or may be in a position to help or hinder Acquiror or any of its Subsidiaries (or assist in connection with any actual or proposed transaction) or made or agreed to make any illegal contribution, or reimbursed any illegal political gift or contribution made by any other Person, to any candidate for federal, state, local or foreign public office (i) which subjects any of Acquiror and its Subsidiaries to any damage or penalty in any civil, criminal or governmental Proceeding or (ii) the non-continuation of which, in the case of (i) and (ii), has had or might have, individually or in the aggregate, a Material Adverse Effect on Acquiror or (b) established or maintained any unrecorded fund or asset or made any false entries on any books or records for any purpose.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>Taxes</u> .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Acquiror and each of its Subsidiaries have timely filed in a complete and correct manner all Tax Returns that they were required to file, other than any Tax Returns the failure to complete correctly or to file would not, individually or in the aggregate, have a Material Adverse Effect. Acquiror and each of its Subsidiaries have paid all Taxes due, other than Taxes adequate reserves for which have been made in the Acquiror Financial Statements and Taxes the failure to pay would not, individually or in the aggregate, have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) There are no claims or assessments pending against Acquiror or any of its Subsidiaries for any alleged deficiency in any Tax, and the Company has not been notified in writing of any proposed Tax claims or assessments against Acquiror or any of its Subsidiaries (other than, in each case, claims or assessments for which adequate reserves in the Acquiror Financial Statements have been established and claims or assessments which would not, individually or in the aggregate, have a Material Adverse Effect).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) There are no Liens on any of the assets or properties of Acquiror or any of its Subsidiaries that arose in connection with any failure (or alleged failure) to pay any Tax, except for statutory liens for current Taxes not yet due and payable (and except for Liens which would not, individually or in the aggregate, have a Material Adverse Effect).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Neither Acquiror nor any of its Subsidiaries (x) is bound by any Tax allocation or Tax sharing agreement with a Person other than Acquiror which applies to U.S. federal or state income Taxes, or (y) has any liabilities under any Tax allocation or Tax sharing agreement (except for any liabilities which would not, individually or in the aggregate, have a Material Adverse Effect).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w) <u>Over-the-Counter Bulletin Board Quotation</u> . The Acquiror Common Stock is quoted on the Over-the-Counter Bulletin Board (" <u>OTC BB</u> "). There is no action or proceeding pending or threatened against Acquiror by NASDAQ or FINRA with respect to any intention by such entities to prohibit or terminate the quotation of Acquiror Common Stock on the OTC BB.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) <u>Completeness of Representations and Schedules</u> . The Acquiror Disclosure Schedule and Exhibits hereto completely and correctly present in all material respects the information required by this Agreement. This Agreement, any Schedules and Exhibits to be delivered under this Agreement and the representations and warranties of this Section 4.3(x), and the documents and written information pertaining to Acquiror and MergerCo furnished to the Company or its agents and the Stockholders by or on behalf of Acquiror and MergerCo, do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make this Agreement, or such certificates, schedules, documents or written information, not misleading.

ARTICLE 5.

COVENANTS

Section 5.1 <u>Forbearances of the Company</u> . From the date hereof until the Effective Time, except as expressly contemplated by this Agreement or the Company's Disclosure Schedule, without the prior written consent of Acquiror, the Company will not:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Ordinary Course</u> . Conduct the business of the Company other than in the ordinary and usual course and consistent with past practices.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Status Quo</u> . Except in connection with actions and expenses necessary to fulfill the conditions set forth in Article 6, or, to the extent consistent therewith, fail to use reasonable best efforts to preserve intact any of its business organizations and assets and maintain its rights, franchises and existing relations with clients, customers, distributors, representatives, independent contractors, suppliers, employees and business associates; or engage in any new lines of business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Capital Stock</u> . Other than pursuant to the exercise of Rights set forth in the Company Disclosure Schedule and outstanding on the date hereof (1) authorize for issuance, issue, grant, sell, deliver, dispose, pledge or otherwise encumber any additional shares of its capital stock or any Rights, (2) enter into any Contract with respect to the foregoing, or (3) permit any additional shares of Company Stock to become subject to new grants of employee or director stock options, other Rights or similar stock-based employee rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Dividends, Etc</u> . (1) Make, declare, pay or set aside for payment any dividend on or in respect of, or declare or make any distribution on, any shares of its capital stock, or (2) directly or indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise acquire, any shares of its capital stock, other than as required by the Company Stock Plans upon exercise of Rights set forth in the Company Disclosure Schedule and outstanding on the date hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Compensation; Employment Agreements; Etc</u> . Enter into, amend, modify or renew any Contract regarding employment, consulting, severance or similar arrangements with any directors, officers of, or independent contractors with respect to, the Company, or grant any salary, wage or other increase in compensation or increase in any employee benefit (including incentive or bonus payments), except (1) for changes that are required by applicable law, (2) to satisfy Contracts set forth in the Company Disclosure Schedule and existing on the date hereof or (3) for salary, wage or other compensation changes in the ordinary and usual course and consistent with past practice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Benefit Plans</u> . Enter into, establish, adopt, amend or modify any pension, retirement, stock option, stock purchase, savings, profit sharing, deferred compensation, consulting, bonus, group insurance or other employee benefit, incentive or welfare Contract, plan, program or arrangement, or any trust agreement (or similar arrangement) related thereto, in respect of any directors, officers, employees of, or independent contractors with respect to, the Company, including taking any action that accelerates the vesting or exercisability of stock options, restricted stock or other compensation or benefits payable thereunder, except, in each such case, (1) as may be required by applicable law or (2) expressly required by the terms of Contracts set forth in the Company Disclosure Schedule.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Dispositions</u> . The Company's entering into any and all agreements related thereto, sell, transfer, mortgage, lease, encumber or otherwise dispose of or discontinue any material portion of its assets, business or properties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Acquisitions</u> . Acquire or offer to acquire any other Person or the assets of any Person, in each case involving payments or receipt of consideration in excess of $5,000 individually or $10,000 in the aggregate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Governing Documents</u> . Amend or make any change to the Company Certificate or the Company Bylaws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Accounting Methods</u> . Implement or adopt any change in accounting principles, practices or methods, other than as may be required by GAAP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>Contracts</u> . Except in the ordinary course of business consistent with past practice, enter into, renew or terminate any Contract or amend or modify in any material respect, or waive any material right under, any of its existing Contracts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>Claims</u> . Settle any Proceeding, except for any Proceeding involving solely money damages in an amount, individually and in the aggregate for all such settlements, not more than $5,000 and which could not reasonably be expected to establish an adverse precedent or basis for subsequent settlements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) <u>Capital Expenditures</u> . Authorize or make any capital expenditures, other than (1) annual budgeted amounts previously disclosed to Acquiror, (2) in the ordinary and usual course of business consistent with past practice in amounts not exceeding $5,000 in the aggregate, or (3) expenditures made through the entering into capital leases.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) <u>Tax Matters</u> . Make or change any Tax election, change any annual tax accounting period, adopt or change any method of Tax accounting, file any amended Tax Return, enter into any closing agreement, settle any Tax claim or assessment, surrender or compromise any right to claim a Tax refund or consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment, other than any of the foregoing actions that are required by law or are (i) not, alone or in the aggregate, material and (ii) taken in the ordinary and usual course of business, consistent with past practice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) <u>Indebtedness</u> . (A) Incur any indebtedness for borrowed money, (B) assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other Person, or (C) forgive or extinguish any indebtedness to the Company for borrowed money or otherwise waive any rights under any instrument or arrangement pursuant to which such indebtedness was incurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) <u>Loans, etc</u> . Make any loans, advances or capital contributions to, or investments in, any other Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) <u>Commitments</u> . Agree or commit to do, or adopt any resolutions of its board of directors in support of, anything that would be precluded by clauses (a) through (p).

Section 5.2 <u>Forbearances of Acquiror</u> . From the date hereof until the Effective Time, except as expressly contemplated by this Agreement or Acquiror's Disclosure Schedule, without the prior written consent of the Company, Acquiror will not, and will cause each of its Subsidiaries not to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Ordinary Course</u> . Conduct the business of Acquiror or any of its Subsidiaries other than in the ordinary and usual course and consistent with past practices.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Status Quo</u> . Except in connection with actions and expenses necessary to fulfill the conditions set forth in Article 6, or, to the extent consistent therewith, fail to use reasonable best efforts to preserve intact any of their business organizations and assets and maintain their rights, franchises and existing relations with clients, customers, distributors, representatives, independent contractors, suppliers, employees and business associates; or engage in any new lines of business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Capital Stock</u> . Other than pursuant to the exercise of Rights set forth in the Acquiror Disclosure Schedule and outstanding on the date hereof, (1) authorize for issuance, issue, grant, sell, deliver, dispose, pledge or otherwise encumber any additional shares of Acquiror Stock or any Rights, (2) enter into any Contract with respect to the foregoing, or (3) permit any additional shares of Acquiror Stock to become subject to new grants of employee or director stock options, other Rights or similar stock-based employee rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Dividends, Etc</u> . (1) Make, declare, pay or set aside for payment any dividend on or in respect of, or declare or make any distribution on, any shares of its capital stock, or (2) directly or indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise acquire, any shares of its capital stock, other than as required by the Acquiror Stock Plans upon exercise of Rights set forth in the Acquiror Disclosure Schedule and outstanding on the date hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Compensation; Employment Agreements; Etc</u> . Enter into, amend, modify or renew any Contract regarding employment, consulting, severance or similar arrangements with any director, officer, or independent contractor of Acquiror or its Subsidiaries, or grant any salary, wage or other increase in compensation or increase in any employee benefit (including incentive or bonus payments), except (1) for changes that are required by applicable law, or (2) to satisfy Contracts set forth in the Acquiror Disclosure Schedule.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Benefit Plans</u> . Enter into, establish, adopt, amend or modify any pension, retirement, stock option, stock purchase, savings, profit sharing, deferred compensation, consulting, bonus, group insurance or other employee benefit, incentive or welfare Contract, plan, program or arrangement, or any trust agreement (or similar arrangement) related thereto, in respect of any directors, officers, employees of, or independent contractors with respect to, Acquiror or its Subsidiaries, including taking any action that accelerates the vesting or exercisability of stock options, restricted stock or other compensation or benefits payable thereunder, except, in each such case, (1) as may be required by applicable law or (2) expressly required by the terms of Contracts set forth in the Acquiror Disclosure Schedule and as such Contracts are in effect as of the date hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Dispositions</u> . Acquiror's entering into any and all agreements related thereto, sell, transfer, mortgage, lease, encumber or otherwise dispose of or discontinue any material portion of its assets, business or properties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Acquisitions</u> . Acquire or offer to acquire any other Person or the assets of any Person, in each case involving payments or receipt of consideration in excess of $5,000 individually or $10,000 in the aggregate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Governing Documents</u> . Amend or make any change to the Acquiror Articles or Acquiror Bylaws or the governing instrument or document (as the case may be) of any Subsidiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Accounting Methods</u> . Implement or adopt any change in accounting principles, practices or methods, other than as may be required by GAAP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>Contracts</u> . Except in the ordinary course of business consistent with past practice, enter into, renew or terminate any Contract or amend or modify in any material respect, or waive any material right under, any of its existing Contracts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>Claims</u> . Settle any Proceeding, except for any Proceeding involving solely money damages in an amount, individually and in the aggregate for all such settlements, not more than $5,000 and which could not reasonably be expected to establish an adverse precedent or basis for subsequent settlements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) <u>Capital Expenditures</u> . Authorize or make any capital expenditures, other than (1) annual budgeted amounts previously disclosed to the Company (2) in the ordinary and usual course of business consistent with past practice in amounts not exceeding $5,000 in the aggregate or (3) expenditures made through the entering into capital leases.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) <u>Tax Matters</u> . Make or change any Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any amended Tax Return, enter into any closing agreement, settle any Tax claim or assessment, surrender or compromise any right to claim a Tax refund or consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment, other than any of the foregoing actions that are required by law or are (i) not, alone or in the aggregate, material and (ii) taken in the ordinary and usual course of business, consistent with past practice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) <u>Indebtedness</u> . (A) Incur any indebtedness for borrowed money, (B) assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other Person, or (C) forgive or extinguish any indebtedness to Acquiror or any of its Subsidiaries for borrowed money or otherwise waive any rights under any instrument or arrangement pursuant to which such indebtedness was incurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) <u>Loans, etc</u> . Make any loans, advances or capital contributions to, or investments in, any other Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) <u>Commitments</u> . Agree or commit to do, or adopt any resolutions of its board of directors in support of, anything that would be precluded by clauses (a) through (p).

Section 5.3 <u>SEC Reports</u> . Acquiror shall (a) cause the forms, reports, schedules, statements and other documents required to be filed with the SEC by Acquiror between the date of this Agreement and the Effective Time to be filed in a timely manner, (b) submit to the Company all such forms, reports, schedules, statements and other documents at least two (2) days prior to filing for its review, and (c) remain a "reporting person" for the purposes of the Exchange Act. Except for forms, reports, schedules, statements and other documents required to be filed with the SEC by Acquiror between the date of this Agreement and the Effective Time, Acquiror shall not file or cause to be filed with, or furnish or cause to be furnished to, the SEC any forms, reports, schedules, statement or any other documents, without the prior express written approval of the Company.

Section 5.4 <u>Access to Information; Confidentiality</u> . The Company, on one hand, and Acquiror and its Subsidiaries on the other, shall upon reasonable prior notice and subject to applicable laws relating to the exchange of information, afford the other party and its officers, employees, counsel, accountants, consultants and other authorized representatives, such access during normal business hours throughout the period prior to the Effective Time to the books, records (including, without limitation, Tax Returns and work papers of independent auditors), properties, personnel and to such other information as the other party may reasonably request, and, during such period, it shall furnish promptly to such other party (1) a copy of each material report, schedule and other document filed by it pursuant to the requirements of Securities Laws, and (2) all other information concerning the business, properties, personnel and affairs of it as the other may reasonably request. No investigation pursuant to this Section 5.4 shall affect or otherwise obviate or diminish any representations or warranties of any party or conditions to the obligations of any party.

Section 5.5 <u>Board of Directors of Acquiror</u> . At Closing, the current Acquiror Board shall deliver duly adopted resolutions to: (a) appoint (i) Ronald Pickett; and (ii) Robert Crabb to serve as directors of Acquiror; and (c) accept the resignations of the current officers of Acquiror and one of the directors of Acquiror effective as of the Closing.

Section 5.6 <u>Transaction Form 8-K</u> . Prior to Closing, the parties shall prepare the Form 8-K announcing the Closing, which shall include all information required by such form, including the information required by Form 10 with respect to the parties, any other information required in connection with Acquiror ceasing to be a shell company as a result of the transactions contemplated hereby, the Company's Financial Statements and the Pro Forma Financial Statements (as defined below) (" <u>Transaction Form 8-K</u> "), which shall be in a form reasonably acceptable to Acquiror and in a format acceptable for EDGAR filing. Prior to Closing, the parties shall prepare the press release announcing the consummation of the transaction hereunder (" <u>Press Release</u> "). At the Closing, Acquiror shall file the Transaction Form 8-K with the SEC and distribute the Press Release.

Section 5.7 <u>Pro Forma Consolidated Financial Statements</u> . Prior to the Closing, the parties shall deliver to Acquiror pro forma consolidated financial statements for the parties, and pro forma consolidated financial statements for the parties and Acquiror giving effect to the transaction contemplated hereunder, for such periods as required by the SEC to be included in the Transaction Form 8-K or any other report or form required to be filed with the SEC at or after Closing with respect to the Transaction, all prepared in all material respects with the published rules and regulations of the SEC and in accordance with U.S. GAAP applied on a consistent basis throughout the periods involved (the " <u>Pro Forma Financial Statements</u> "). The Pro Forma Financial Statements shall have been reviewed by an independent accountant registered with the Public Company Accounting Oversight Board retained by the Company and shall be in a format acceptable for inclusion on the Transaction 8-K.

Section 5.8 <u>Commercially Reasonable Efforts</u> .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to the terms and conditions of this Agreement and applicable law, each of the Company and Acquiror agrees to use its commercially reasonable efforts in good faith to take, or cause to be taken (including causing any of its Subsidiaries to take), all actions, and to do, or cause to be done, all things necessary, proper or desirable, or advisable under applicable laws and regulations or otherwise, so as to permit consummation and make effective the Merger as promptly as reasonably practicable and otherwise to enable consummation of the transactions contemplated hereby, including such actions or things as any other party hereto may reasonably request in order to cause any of the conditions to such other party's obligations to consummate such transactions specified in Article 6 to be fully satisfied.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Without limiting the generality of Section 5.8(a), the parties will, and will cause their respective officers and Subsidiaries to, and will use commercially reasonable efforts to cause their respective Affiliates, directors, employees, agents, attorneys, accountants and representatives to, consult and fully cooperate with and provide assistance to each other in (i) obtaining all necessary consents, approvals, waivers, licenses, permits, authorizations, registrations, qualifications, or other permission or action by, and giving all necessary notices to and making all necessary filings with and applications and submissions to any Person; (ii) lifting any permanent or preliminary injunction or restraining order or other similar order issued or entered by any court or Governmental Authority; and (iii) in general, consummating and making effective the transactions contemplated hereby; <u>provided</u> , <u>however</u> , that in order to obtain any consent, approval, waiver, license, permit, authorization, registration, qualification, or other permission or action or the lifting of any injunction referred to in clause (i) or (ii) of this sentence, no party will be required to pay any consideration (other than filing fees for any governmental filings or listing fees for any stock exchange), to divest itself of any of, or otherwise rearrange the composition of, its assets or to agree to any of the foregoing or to any conditions or requirements that are materially adverse to its interests or materially burdensome.

Section 5.9 <u>Regulatory Applications</u> .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Acquiror and the Company and their respective Subsidiaries shall cooperate and use their respective reasonable best efforts to prepare all documentation, to effect all filings and to obtain all permits, consents, approvals and authorizations of all third parties and Governmental Authorities necessary to consummate the transactions contemplated by this Agreement as promptly as reasonably practicable. Each of Acquiror and the Company shall have the right to review in advance, and to the extent practicable each will consult with the other (subject in each case to applicable laws relating to the exchange of information) with respect to, all material written information submitted to any third party or Governmental Authority in connection with the transactions contemplated by this Agreement. In exercising the foregoing right, each of Acquiror and the Company agrees to act reasonably and as promptly as practicable. Each of Acquiror and the Company agrees that it will consult with the other party hereto with respect to the obtaining of all material permits, consents, approvals and authorizations of all third parties and Governmental Authorities necessary or advisable to consummate the transactions contemplated by this Agreement and each party will keep the other party apprised of the status of material matters relating to completion of the transactions contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each of Acquiror and the Company agrees, upon request, to furnish the other party with all information concerning itself, its Subsidiaries, directors, officers and stockholders and such other matters as may be reasonably necessary or advisable in connection with any filing, notice or application made by or on behalf of such other party or any of its Subsidiaries to any third party or Governmental Authority.

Section 5.10 <u>Notification of Certain Matters</u> . Between the date hereof and the Effective Time, each party will give prompt notice in writing to the other parties of: (i) any information that indicates that any of its representations or warranties contained herein was not true and correct in any material respect as of the date hereof or will be untrue and incorrect in any material respect at and as of the Effective Time (except for changes permitted or contemplated by this Agreement), (ii) the occurrence or non-occurrence of any event which will result, or is reasonably likely to result, in the failure of any condition set forth in Article 6, any covenant or agreement contained in this Agreement to be complied with or satisfied, (iii) any failure of a party to satisfy any condition or comply with, in any material respect, any covenant or agreement to be satisfied or complied with by it hereunder, and (iv) any notice or other communication from any third party alleging that the consent of such third party is or may be required in connection with the transactions contemplated by this Agreement or that such transactions otherwise may violate the rights of or confer remedies upon such third party; <u>provided</u> , <u>however</u> , that the delivery of any notice pursuant to this Section 5.10 will not limit or otherwise affect the remedies available hereunder to the party receiving such notice.

Section 5.11 <u>Plan of Reorganization</u> . This Agreement is intended to constitute a "plan of reorganization" within the meaning of section 1.368-2(g) of the income tax regulations promulgated under the Code. From and after the date of this Agreement and until the Effective Time, each party hereto shall use its commercially reasonable efforts to cause the Merger to qualify, and will not take any action, cause any action to be taken, fail to take any action or cause any action to fail to be taken which action or failure to act could prevent the Merger from qualifying, as a "reorganization" within the meaning of Section 368(a) of the Code. Following the Effective Time, neither the Surviving Corporation, Acquiror nor any of their Affiliates shall knowingly take any action, cause any action to be taken, fail to take any action or cause any action to fail to be taken, which action or failure to act could cause the Merger to fail to qualify as a "reorganization" within the meaning of Section 368(a) of the Code.

Section 5.12 <u>State Takeover Laws</u> . If any "fair price," "business combination" or "control share acquisition" statute or other similar statute or regulation is or may become applicable to the Merger, Acquiror or the Company, as applicable, shall take such actions as are necessary so that the transactions contemplated by this Agreement may be consummated as promptly as practicable on the terms contemplated hereby and otherwise act to eliminate or minimize the effects of any such statute or regulation on the Merger.

ARTICLE 6.

CONDITIONS TO CONSUMMATION OF THE MERGER

Section 6.1 <u>Conditions to Obligations of Each Party</u> . The respective obligations of each of the parties hereto to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or written waiver by Acquiror and the Company at or prior to the Effective Time of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>No Restraints</u> . No temporary restraining order, preliminary or permanent injunction or other order preventing the consummation of the transactions contemplated hereby, or permitting such consummation only subject to any condition or restriction that has or would have a Material Adverse Effect shall have been issued since the date of this Agreement by any U.S. federal or state court of competent jurisdiction and shall remain in effect; and no U.S. federal or state law, statute, rule, regulation or decree that would prohibit or make the consummation of the Merger illegal shall have been enacted or adopted since the date of this Agreement and shall remain in effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Third Party Consents</u> . All consents and approvals of all Persons required in connection with the execution, delivery and performance of this Agreement and consummation of the Merger shall have been obtained and shall be in full force and effect, unless the failure to obtain any such consent or approval is not reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on Acquiror or the Company or to materially adversely affect the consummation of the Merger.

Section 6.2 <u>Conditions to Obligation of the Company</u> . The obligation of the Company to consummate the transactions contemplated by this Agreement is also subject to the fulfillment or written waiver by the Company at or prior to the Effective Time of each of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Representations and Warranties</u> .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) All representations and warranties of Acquiror and MergerCo contained in this Agreement that are qualified by materiality or a Material Adverse Effect or words of similar effect shall be correct and complete in all respects as of the date hereof and as of the Effective Time, as though made on and as of the Effective Time (or, if they relate to a specific date, as if made on such specific date), and those representations and warranties of Acquiror and MergerCo contained in this Agreement that are not so qualified must be correct and complete in all material respects as of the date hereof and as of the Effective Time, as though made on and as of the Effective Time (or, if they relate to a specific date, as if made on such specific date).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Notwithstanding Section 6.2(a)(1), the representations and warranties set forth in Section 4.3(e) (subject to de minimis deviations) and Section 4.3(h)(1) shall be true and correct in all respects as of the date hereof and as of the Effective Time, as though made on and as of the Effective Time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The Company shall have received a certificate, dated the Effective Date, signed on behalf of Acquiror and MergerCo by a senior executive officer to such effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Performance of Obligations of Acquiror and MergerCo</u> . Acquiror and MergerCo shall have performed in all material respects all covenants required to be performed by it under this Agreement at or prior to the Effective Time, and the Company shall have received certificates, dated the Effective Date, signed on behalf of Acquiror and MergerCo, respectively, by a senior executive officer to such effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Board Matters</u> . Acquiror shall have taken all requisite action and shall have obtained letters of resignation necessary, effective as of the Effective Time, to cause the Acquiror Board to be constituted as set forth in Exhibit C.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Opinion of Counsel</u> . Acquiror shall have delivered at the Effective Date to the Company an opinion of its counsel dated as of date of the Effective Date in form and substance reasonably satisfactory to the Company and its counsel, to the effect that (i) Acquiror is a duly and validly organized and existing corporation in good standing under the laws of the State of Nevada, and in each state where Acquiror may be qualified as a foreign corporation, with full corporate power to carry on the business in which it is engaged; (ii) the performance of this Agreement and the consummation of the transactions contemplated herein will not result in any breach or violation of any terms or provisions of or cause a default under the Acquiror Articles or Acquiror Bylaws or, to any order, rule, or regulation of any court, governmental agency or body having jurisdiction over Acquiror, or any of its activities, properties, any statute, indenture, mortgage, deed of trust, lease, loan agreement, security agreement, or other

agreement or instrument to which Acquiror is a party or by which it is bound or to which any of its property is subject; (iii) no provision of the Acquiror Articles, Acquiror Bylaws, minutes or share certificates of Acquiror or any contract to which Acquiror is a party or otherwise bound or affected, prevents the Acquiror from delivering good, absolute, and marketable title to the Acquiror Common Stock to the Company as contemplated by this Agreement; (iv) Acquiror is authorized by the Acquiror Articles to issue 500,000,000 shares of the Acquiror Common Stock; (v) that as of the date of this Agreement, there were 20,955,199 shares of the Acquiror Common Stock duly and validly issued and outstanding, fully paid, and non-assessable; (vi) to the best knowledge and belief of such counsel the issuance and sale of the Acquiror Common Stock did not violate the Securities Act, or the rules and regulations of the SEC thereunder, or applicable state securities or Blue Sky Laws, and that Acquiror has no other authorized or outstanding series or class of capital stock or other securities; (viii) such counsel has no knowledge of any litigation, proceeding, or governmental investigation or labor dispute pending or threatened against or relating to Acquiror, its properties or businesses, except as set forth herein or in said opinion; and (ix) the redomestication of Acquiror from Idaho to Nevada was conducted in accordance with all applicable laws and no Acquiror stockholder approval was required for such redomestication.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Cash on Hand</u> . As of the Effective Time, Acquiror shall have not less than $220,000 of cash on hand net of any payables or other liabilities incurred by or on behalf of Acquiror.

Section 6.3 <u>Conditions to Obligation of Acquiror and MergerCo</u> . The obligation of Acquiror and MergerCo to consummate the Merger is also subject to the fulfillment or written waiver by Acquiror at or prior to the Effective Time of each of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Representations and Warranties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) All representations and warranties of the Company contained in this Agreement that are qualified by materiality or a Material Adverse Effect or words of similar effect shall be correct and complete in all respects as of the date hereof and as of the Effective Time, as though made on and as of the Effective Time (or, if they relate to a specific date, as if made on such specific date), and those representations and warranties of the Company contained in this Agreement that are not so qualified must be correct and complete in all material respects as of the date hereof and as of the Effective Time, as though made on and as of the Effective Time (or, if they relate to a specific date, as if made on such specific date).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Notwithstanding Section 6.3(a)(1), the representations and warranties set forth in Section 4.2(e) (subject to de minimis deviations) and Section 4.2(h)(1) shall be true and correct in all respects as of the date hereof and as of the Effective Time, as though made on and as of the Effective Time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Acquiror shall have received a certificate, dated the Effective Date, signed on behalf of the Company by a senior executive officer to such effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Performance of Obligations of the Company</u> . The Company shall have performed in all material respects all covenants required to be performed by it under this Agreement at or prior to the Effective Time, and Acquiror shall have received, prior to the Effective Time, a certificate, dated the Effective Date, signed on behalf of the Company by a senior executive officer to such effect.

ARTICLE 7.

TERMINATION

Section 7.1 <u>Termination</u> . This Agreement may be terminated, and the Merger may be abandoned at any time prior to the Effective Time, whether before or after approval thereof by stockholders of the Company or Acquiror:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) by the mutual consent of Acquiror and the Company authorized by their respective Boards of Directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) by Acquiror or the Company in the event of either: (1) a breach by the other party of any representation or warranty contained herein, which breach cannot be or has not been cured within 15 days after the giving of written notice to the breaching party of such breach, or (2) a breach by the other party of any of the covenants or agreements contained herein, which breach cannot be or has not been cured within 15 days after the giving of written notice to the breaching party of such breach and which breach, in each case, is reasonably likely, individually or in the aggregate, to have a Material Adverse Effect on the breaching party or the Surviving Corporation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) At any time prior to the Effective Time, by Acquiror or the Company in the event that the Merger is not consummated by December 31, 2010 or such later date as the Company and Acquiror may mutually agree in writing, except to the extent that the failure of the Merger then to be consummated arises out of or results from the knowing action or inaction of the party seeking to terminate pursuant to this Section 7.1(c);

Any party desiring to terminate this Agreement shall give written notice of such termination and the reasons therefor to the other party.

Section 7.2 <u>Effect of Termination and Abandonment</u> . In the event of any termination of this Agreement pursuant to Section 7.1, this Agreement (other than as set forth in Section 8.1 below) immediately will become void and there will be no liability or obligation on the part of any party or their respective Affiliates, stockholders, directors, officers, agents or representatives; <u>provided</u> , that no such termination will relieve any party of any liability or damages resulting from any willful or intentional breach of any of its representations, warranties, covenants or agreements contained in this Agreement.

ARTICLE 8.

MISCELLANEOUS

Section 8.1 <u>Survival</u> . No representations, warranties, agreements and covenants contained in this Agreement shall survive the Effective Time or termination of this Agreement if this Agreement is terminated prior to the Effective Time; provided, however, that (a) to the extent the agreements of the parties contained herein by their terms apply after the Effective Time, such agreements shall survive the Effective Time and (b) if this Agreement is terminated prior to the Effective Time, the agreements of the parties contained in Section 7.2 and Article 8 shall survive such termination.

Section 8.2 <u>Waiver; Amendment</u> . Prior to the Effective Time, any provision of this Agreement may be: (1) waived by the party benefited by the provision, or (2) amended or modified at any time, by an agreement in writing between the parties hereto approved or authorized by their respective Boards of Directors and executed in the same manner as this Agreement, except that, after approval of the Merger by the stockholders of the Company or Acquiror, no amendment may be made which under applicable law requires further approval of such stockholders without obtaining such required further approval.

Section 8.3 <u>Counterparts</u> . This Agreement may be executed and delivered (including by facsimile transmission) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.

Section 8.4 <u>Governing Law</u> . This Agreement shall be governed by and construed in accordance with the laws of the State of Florida, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof.

Section 8.5 <u>Expenses</u> . Each party hereto will bear all expenses incurred by it in connection with this Agreement and the transactions contemplated hereby, whether or not the Merger is consummated.

Section 8.6 <u>Notices</u> . All notices, requests and other communications hereunder to a party shall be in writing and shall be deemed given: (1) on the date of delivery, if personally delivered, (2) on the first Business Day following the date of dispatch, if delivered by a nationally recognized next-day courier service, or (3) on the third Business Day following the date of mailing, if mailed by registered or certified mail (return receipt requested), in each case to such party at its address set forth below or such other address as such party may specify by notice to the parties hereto.

If to the Company, to:

Clean Wind Energy, Inc.<br> 1997 Annapolis Exchange Parkway, Suite 300<br> Annapolis, MD 21401

Attention: Ronald Pickett

and a copy to:

Holland & Knight LLP<br> 701 Brickell Avenue, Suite 3000<br> Miami, Florida 33131<br> Attention: Rodney H. Bell

If to Acquiror or MergerCo, to:

Superior Silver Mines, Inc.<br> 413 Cedar Street<br> Wallace, Idaho 83873<br> Attention: Thomas S. Smith

and a copy to:

601 W. Main Avenue, Suite 1017<br> Spokane, Washington 99201<br> Attention: Gregory B. Lipsker

Section 8.7 <u>Entire Understanding, No Third Party Beneficiaries</u> . This Agreement (together with the Disclosure Schedules) represents the entire understanding of the parties hereto with reference to the transactions contemplated hereby and thereby supersedes any and all other oral or written agreements heretofore made. Insofar as such Section expressly provides certain rights to the Persons named therein, nothing in this Agreement, expressed or implied, is intended to confer upon any Person, other than the parties hereto or their respective successors and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

Section 8.8 <u>Assignment</u> . Neither this Agreement nor any of the rights or obligations hereunder may be assigned by any party without the prior written consent of the other parties hereto. Subject to the foregoing, this Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns.

Section 8.9 <u>Severability</u> . If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party.

Section 8.10 <u>Waiver of Jury Trial</u> . EACH OF THE PARTIES TO THIS AGREEMENT IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

Section 8.11 <u>Enforcement</u> . The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in the Delaware Court of Chancery or any Federal court located in the State of Delaware, this being in addition to any other remedy to which they are entitled at law or in equity.

Section 8.12 <u>Jurisdiction</u> . Each of the parties hereto (a) consents to submit itself to the personal jurisdiction of the Delaware Court of Chancery or any Federal court located in the State of Delaware in the event any dispute arises out of this Agreement or the Merger, (b) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, and (c) agrees that it will not bring any action arising out of or relating to this Agreement or the Merger in any court other than the Delaware Court of Chancery or any Federal court sitting in the State of Delaware.

IN WITNESS WHEREOF, each of the parties has caused this Agreement to be duly executed as of the day and year first above written.

---

| | | |
|:---|:---|:---|
| <br>CLEAN WIND ENERGY, INC. | <br>CLEAN WIND ENERGY, INC. | <br>CLEAN WIND ENERGY, INC. |
| By: | /s/ Ronald W. Pickett | /s/ Ronald W. Pickett |
|  | Name: | Ronald W. Pickett |
|  | Its: | President |
| SUPERIOR SILVER MINES, INC. | SUPERIOR SILVER MINES, INC. | SUPERIOR SILVER MINES, INC. |
| By: | /s/ Thomas S. Smith | /s/ Thomas S. Smith |
|  | Name: | Thomas S. Smith |
|  | Its: | President |
| SUPERIOR SILVER MINES ACQUISITION CORP. | SUPERIOR SILVER MINES ACQUISITION CORP. | SUPERIOR SILVER MINES ACQUISITION CORP. |
| By: | /s/ Thomas S. Smith | /s/ Thomas S. Smith |
|  | Name: | Thomas S. Smith |
|  | Its: | President |

---

(Signature Page to Agreement and Plan of Merger)

**<u>Exhibit A</u>**

**(Post-Merger Certificate of Incorporation of the Company)**

## Exhibit 2.2

**Exhibit 2.2**

**SUPERIOR SILVER MINES, INC.**

**Plan of Domestication<br> Effective December 21, 2010**

RESOLVED, it appearing to be in the best interests of Superior Silver Mines, Inc. ("Superior" or the "Corporation") and its shareholders to domesticate this Corporation in the State of Nevada, the Board of Directors hereby resolves that the Corporation shall be domesticated in the State of Nevada.

IT IS FURTHER RESOLVED, that such domestication shall be achieved in accordance with the provisions of sections 30-18-501 through 30-18-506 Idaho Code, as well as the provisions of section 92A.270 of the Nevada Revised Statutes.

ITS IS FURTHER RESOLVED, that the Plan Of Domestication shall be, and it hereby is:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The name of the domesticating entity is Superior Silver Mines, Inc., the type of entity being a corporation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The name of the domesticated entity is Superior Silver Mines, Inc., with its jurisdiction of organization the State of Nevada;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The manner of converting the interests in the domesticating entity, namely Superior Silver Mines, Inc., an Idaho corporation, into interests of Superior Silver Mines, Inc., a Nevada corporation, shall be by converting the issued and outstanding shares in the Idaho corporation into the same number of shares in the Nevada corporation, with the identity and shareholdings of each shareholder remaining unchanged, and the capitalization of the corporation remaining unchanged;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The proposed public organic document of the domesticated entity, that is, of the Nevada corporation, are Articles of Incorporation, a copy of the same being attached hereto as <u>Exhibit A</u> ;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The full text of the private organic rules of the Nevada corporation, that is, the by-laws, are attached hereto as <u>Exhibit B</u> ; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Articles Of Domestication of the corporation, to comply with the provisions of Nevada Revised Statutes section 92A.270, are attached hereto as <u>Exhibit C</u> .

## Exhibit 2.3

**Exhibit 2.3**

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Articles of Domestication**<br> (PURSUANT TO NRS 92A,270) |  | Filed in the office of<br>Ross Miller<br> Secretary of State<br> State of Nevada |  | Document Number**<br> 20100956655-99**<br> Filing Date and Time**<br> 12/27/2010 4:34 PM**<br> Entity Number**<br> E0622132010-3** |
| **USE BLACK INK ONLY - DO NOT HIGHLIGHT** |  | **ABOVE SPACE IS FOR OFFICE USE ONLY** | **ABOVE SPACE IS FOR OFFICE USE ONLY** | **ABOVE SPACE IS FOR OFFICE USE ONLY** |
| 1. Entity Name and Type of Domestic Entity as set forth in its Constituent Documents: | Superior Silver Mines, Inc. | Superior Silver Mines, Inc. | Superior Silver Mines, Inc. | Superior Silver Mines, Inc. |
| 2. Entity Name Before Filing Articles of Domestication: | Superior Silver Mines, Inc. | Superior Silver Mines, Inc. | Superior Silver Mines, Inc. | Superior Silver Mines, Inc. |
| 3. Date and Jurisdiction of Original Formation: | January 22, 1962 | January 22, 1962 | January 22, 1962 | January 22, 1962 |
| 4. Jurisdiction that Constituted the Principal Place of Business, Central Administration or Equivalent of the Undomesticated Entity Immediately Before Articles of Domestication: | Idaho | Idaho | Idaho | Idaho |
| 5. Signature of Authorized Representative: | /s/ Dennis O'Brian |  | Dennis O'Brian | 12-27-10 |
|  | Authorized Signature |  | Secretary | Date |

---

**Filing Fee: $350.00**

***<u>IMPORTANT:</u> This document must be accompanied by the appropriate constituent document for the type of domestic entity described in article 1 above and the filing fees.***

 ****

*This form must be accompanied by appropriate fees.* Nevada Secretary of State NRS 78 Articles<br> Revised: 4-10-09

**SUPERIOR SILVER MINES, INC.<br> ARTICLES OF DOMESTICATION**

Superior Silver Mines, Inc. makes these Articles Of Domestication in accordance with the provisions of Nevada Revised Statutes section 92A.270, as follows:

1. Superior Silver Mines, Inc. (the "Corporation") was first organized as a corporation pursuant to the laws of the State of Idaho on January 22, 1962. The Corporation was not chartered elsewhere after its incorporation. However, the name of the Corporation as it now exists, Superior Silver Mines, Inc., was formerly "Superior Mines Company".

2. The name of the domesticated entity immediately before filing these Articles was, and is, Superior Silver Mines, Inc.

3. The name of the domestic entity as set forth in its charter document was Superior Mines Company, with its name formally subsequently changed to Superior Silver Mines, Inc. The Corporation was formed as a corporation, and remains a corporation to and including the date of these Articles.

4. The principal place of business of Corporation immediately before filing these Articles was the State of Idaho.

These Articles Of Domestication were duly approved by the Board Of Directors of Superior Silver Mines, Inc. by Resolutions of the Board dated December 21, 2010. The undersigned, President of Superior Silver Mines, Inc., is duly authorized by the Board Of Directors of the Corporation to execute these Articles Of Domestication.

Dated this 21 st Day of December 2010.

---

| |
|:---|
| /s/ Thomas S. Smith |
| Thomas S. Smith, President |

---

## Exhibit 2.4

**Exhibit 2.4**

---

| |
|:---|
| **FILED EFFECTIVE** |
| 2010 DE: 22 PM 4:42 |
| SECRETARY OF STATE |
| STATE OF IDAHO |

---

Statement of Domestication

(a) The name of the domesticating entity is Superior Silver Mines, Inc., the type of entity being a corporation incorporated under the laws of the State of Idaho;

(b) The name of the domesticated entity is Superior Silver Mines, Inc., with its original jurisdiction of organization the State of Idaho; the entity is being re-domesticated in the state of Nevada.

(c) The Statement of Domestication shall become effective upon the filing with the Idaho Secretary of State.

(d) The Plan of Domestication was approved in accordance with the provisions of Part 5 of the Idaho Entity Transactions Act.

---

| |
|:---|
| Dated this 22 nd day of December 2010 |
| /s/ Thomas S. Smith |

---

## Exhibit 3.1

**Exhibit 3.1**

![](ex3-1_001.jpg)

![](ex3-1_002.jpg)

![](ex3-1_003.jpg)

![](ex3-1_004.jpg)

**ARTICLES OF INCORPORATION**

**OF**

**SUPERIOR SILVER MINES, INC.**

The undersigned hereby executes the following Articles of Incorporation for the purpose of forming a corporation under the provisions of the laws of the State of Nevada pursuant to NRS 78.

**ARTICLE I**

The name of this corporation is, and shall be SUPERIOR SILVER MINES, INC.

**ARTICLE II**

The objects and purposes for which this Corporation is formed are as principals, agents, or otherwise, to do in any part of the world any and every of the things therein set forth or permitted by law to the same extent as natural persons might and could do. In furtherance and not in limitation of the general powers conferred by the laws of the State of Nevada, we do expressly provide that the Corporation shall have power;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) To purchase, sell, option, own, locate, lease or otherwise acquire, mortgage and dispose. of lands, mines, mining claims and mineral rights; to own handle and control letters patent and inventions; to use and to own, enter, apply for patents for mines, millsites, mills, water-rights, tunnels, and rights of way; to work, prospect, explore, exploit and develop mines and mineral lands of every kind and nature and wherever the same may be situated, and to carry on every operation of the business of mining, milling and producing, zinc, lead, gold, silver, and any and all other metals and minerals of every kind and character and to sell and dispose of the same and the by-product thereof, and. to do everything that may be necessary or proper in the conduct of the business of working such mines and mineral lands and the production of ores and to buy, sell, contract for, own, erect, and operate all mills, smelting and other ore reduction works, sawmills, machinery, roads, tramways, ditches, flumes,. water rights, power plants of any and all kinds whatsoever, and to develop and use electricity for power and lighting purposes, and to file upon water rights for any and all purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) To take, hold, lease, mortgage', own, purchase, or acquire by operation of the law or otherwise, real property or any interest therein or appurtenant thereto, including storerooms, sawmills, store buildings and any part thereof or any interest therein, or to sell, lease, exchange, mortgage or hypothecate real estate or any interest therein and to engage in any and all undertakings and business necessary and proper to the improvement and betterment of the land or real property or interest therein, owned or otherwise acquired or to be owned or otherwise acquired by said corporation, or in any other lands in which the said corporation may have any interest and to handle and deal in any land, interest in land, or other property or interest therein, of said corporation in any manner it may desire.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) To enter into, make, perform and carry out any and all contracts or agreements of every kind, amount and character with any person, firm, association, corporation, Federal or State government or any political subdivision. or corporation or agency thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) To purchase, own, sell, convey, mortgage, pledge, exchange, acquire by operation of law or otherwise, personal property of every kind and character, debts, dues and demands or causes of action, and each and every kind of personal property, evidence of debts, bonds, stocks of this and other corporations, both public and private, which the Corporation may deem necessary and convenient for its business or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) To borrow and lend money from and to any person, firm, corporation association, or Federal or State government or any political subdivision, or corporation or agency thereof, and to make take and execute notes, mortgages, bond, deeds of trust, or other evidence of indebtedness to secure payment thereof, or by any other lawful manner or means, and to take, and receive notes, bonds, mortgages, deeds of trust, or any evidence of indebtedness for the use and benefit of said corporation, or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) To own, hold, lease, or sublet, or to conduct on its own account, or for any person, firm association, corporation, or Federal or State government, or any political subdivision, or corporation or agency thereof, all and every kind of merchandise, business or property necessary or proper to carry on, an account of the business of said corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) To build any and all necessary shops, buildings, storerooms, boarding houses, sleeping quarters, sawmills and structures at any place proper or convenient to carryon any or all of the business of said Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) To do and perform every act and thing necessary to carry out the above enumerated purposes, or calculated directly or indirectly to the advancement of the interest of the Corporation, or to, the enhancement of the value of its stock, holdings and property of any kind or character.

**ARTICLE III**

The corporate existence of this corporation shall be perpetual.

**ARTICLE IV**

The location and post office address of the corporation's registered office in the State of Idaho shall be Wallace, Idaho.

**ARTICLE V**

The authorized capital stock of the corporation shall consist of two classes of stock designated as Common Stock and Preferred Stock. The total number of shares of Common Stock that the corporation will have authority to issue is Five Hundred Million (500,000,000). The shares shall have a par value of $0.0001 per share. All of the Common Stock authorized herein shall have equal voting rights and powers without restrictions in preference. The total number of shares of Preferred Stock that the corporation will have authority to issue is Ten Million (10,000,000). The Preferred Stock shall have a stated value of $0.0001 per share. The authorized but unissued shares of Preferred Stock may be divided into and issued in designated series from time to time by one or more resolutions adopted by the Board of Directors. The Directors, in their sole discretion, shall have the power to determine the relative powers, preferences, and rights of each series of Preferred Stock.

The said shares may be issued and sold from time to time by the corporation for such consideration and upon such terms as may, from time to time, be fixed by the Board of Directors without action by the stockholders.

Notwithstanding the provisions of Section 30-120, Idaho Code, the Board of Directors of this corporation shall have power and authority from time to time to authorize the sale of, and to sell for cash or otherwise, all or any portion of the unissued and/or of the treasury stock of this corporation without said stock, or any thereof, being first offered to the shareholders of this corporation.

**ARTICLE VI**

The corporate powers of the corporation shall be vested in a Board of Directors of not less than three, and no more than seven members, who shall be elected annually by the shareholders, and who shall serve until the election and qualification of their successors. No person shall serve as a director of this corporation who is not a shareholder therein. Directors who are to serve for the first corporate year shall be selected by the incorporators, unless otherwise determined by the shareholders, the Board of Directors, by resolution, shall from time to time fix the number of directors within the limit herein provided.

**ARTICLE VII**

In addition to the power conferred upon the shareholders by law, to make, amend or repeal By-Laws for this corporation, the Directors shall have the power to repeal and amend the By-Laws and, adopt new By-Laws, but such powers may be executed only by a majority of the whole Board of Directors.

**ARTICLE VIII**

A director or officer of the corporation shall not, in the absence of actual fraud be disqualified by his office from dealing or contracting, with the corporation, either as vendor, purchaser, or otherwise; and in the absence of actual fraud no transaction or contract of the corporation shall be void or voidable by reason of the fact that any director or officer, or firm of which any director or officer is a member, or any other corporation of which any director or officer is a shareholder, officer or director, is in any way interested in such transaction or contract; provided, that such transaction or contract is, or shall be, authorized, ratified or approved (1) by a vote of a majority of a quorum of the Board of Directors, or of the Executive Committee, if any, counting for the purpose of determining the existence of such majority or quorum, any Director, when present, who is so interested, or who is a member of a firm so interested, or who is a shareholder, or who is a member of a firm so interested; or (2) at a stockholders' meeting by a vote of a majority of the outstanding shares of the corporation represented at such meeting and then entitled to vote, or by writing or writings signed by a majority of such holders of stock which shall have the same force and effect as though authorization, ratification, or approval were made by the stockholders; and no director or officer shall be liable to account to the corporation for any profits realized by him through any such transaction or contract of the corporation authorized, ratified, or approved, as aforesaid, by reason of the fact that he may be, or any firm of which he is a member, or any corporation of which is a shareholder, officer or director, was interested in such transaction. Nothing in this paragraph contained shall create any liability in the events above mentioned, or prevent the authorization, ratification or approval of such contracts or transactions in any other manner than permitted by law, or invalidate or made voidable any contract or transaction which would be valid without reference to the provisions of this paragraph.

**ARTICLE IX**

The initial Board of Directors of this corporation consists of four (4) directors. The name and address of such directors are as follows:

---

| | |
|:---|:---|
| Name | Address |
| Thomas S. Smith | 3714 S. Sommer Rd. |
|  | Veradale, WA 99037 |
| Arthur P. Dammarell, Jr. | 17822 N. Hatch Rd. |
|  | Colbert, WA 99005 |
| Dale B. Lavigne | P.O. Box 2170 |
|  | Osburn, ID 83849 |
| H. James Magnuson | P.O. Box 2288 |
|  | Coeur d'Alene, ID 83816 |

---

**ARTICLE X**

The name of the registered agent of this corporation is Corporate Service Center, Inc.

**ARTICLE XI**

The post office address of the registered office of this corporation is 5190 Neil Rd., Suite 430, Reno, NV 89502.

**ARTICLE XII**

The name and address of the incorporator is as follows:

---

| | |
|:---|:---|
| Name | Address |
| Gregory B. Lipsker | 601 W. Main Avenue, Suite 1017 |
|  | Spokane, WA 99201 |

---

---

| | |
|:---|:---|
| Dated this 21 st day of December, 2010. |  |
|  | /s/ Gregory B. Lipsker |

---

## Exhibit 3.2

**EXHIBIT 3.2**

**AMENDED BYLAWS OF**

**SUPERIOR SILVER MINES, INC.**

**ARTICLE I.**

**<u>OFFICES</u>**

1.1 <u>Registered Office and Registered Agent</u>. The registered office of the corporation shall be located in the State of Idaho at such place as may be fixed from time to time by the Board of Directors ("Board") upon filing of such notices as may be required by law, and the registered agent shall have a business office identical with such registered office. Any change in the registered agent or registered office shall be effective upon filing such change with the Office of the Secretary of State of the State of Idaho.

1.2 <u>Other Offices</u>. The corporation may have other offices within or outside the State of Idaho at such place or places as the Board may from time to time determine.

**ARTICLE II.**

**<u>SHAREHOLDERS</u>**

2.1 <u>Meeting Place</u>. All meetings of the shareholders shall be held at the principal place of business of the corporation, or at such other place as shall be determined from time to time by the Board, and the place at which any such meeting shall be held shall be stated in the notice of the meeting.

2.2 <u>Annual Meeting</u>. The annual meeting of the shareholders for the election of Directors and for the transaction of such other business as may properly come before the meeting shall be held on the last Tuesday in October (or the next business day should this date fall on a holiday or nonworking day), or at such other time as the Board of Directors may determine from time to time. If the annual meeting of the shareholders is not held within any thirteen (13) month period, the District Court of the county where the corporation's principal office is located or, if none in the state of Idaho, its registered office may, on the application of any shareholder for a Writ of Mandamus, summarily order a meeting to be held.

2.3 <u>Special Meetings</u>. Special meetings of the shareholders for any purpose may be called at any time by the President, Board, or the holders of not less than one-tenth (1/10) of all shares entitled to vote at the meeting.

2.4 <u>Court Ordered Meeting</u>. (1) The Idaho district court of the county where a corporation's principal office, or, if none in this state, its registered office, is located may summarily order a meeting to be held: (a) On application of any shareholder of the corporation entitled to participate in an annual meeting if an annual meeting was not held within thirteen (13) months after its last annual meeting; or (b) On application of a shareholder who signed a demand for a special meeting valid under section 30-1-702, Idaho Code, if: (i) Notice of the special meeting was not given within thirty (30) days after the date the demand was delivered to the corporation's secretary, or (ii) The special meeting was not held in accordance with the notice. (2) The court may fix the time and place of the meeting, determine the shares entitled to participate in the meeting, specify a record date for determining shareholders entitled to notice of and to vote at the meeting, prescribe the form and content of the meeting notice, fix the quorum required for specific matters to be considered at the meeting, or direct that the votes represented at the meeting constitute a quorum for action on those matters, and enter other orders necessary to accomplish the purpose or purposes of the meeting.

2.5 <u>Notice</u>.

(a) Notice of the date, time and place of the annual meeting of shareholders shall be given by delivering personally or by mailing a written or printed notice of the same, at least ten (10) days, and not more than sixty (60) days, prior to the meeting to each shareholder of record entitled to vote at such meeting.

(b) At least ten (10) days and not more than sixty (60) days prior to the meeting, written or printed notice of each special meeting of shareholders, stating the date, place, day and hour of such meeting, and the purpose or purposes for which the meeting is called, shall be delivered personally, or mailed to each shareholder of record entitled to vote at such meeting.

2.6 <u>Voting Record</u>. At least ten (10) days before each meeting of shareholders, a complete record of the shareholders entitled to vote at such meeting, or any adjournment thereof, shall be made, arranged in alphabetical order, with the address of and number of shares held by each, which record shall be kept on file at the registered office of the corporation for a period of ten (10) days prior to such meeting. The record shall be produced and kept open at the time and place of such meeting for the inspection of any shareholder. Failure to comply with the requirements of this Section shall not affect the validity of any action taken at such meeting.

An officer or agent having charge of the stock transfer books who shall fail to prepare the record of shareholders, or keep it on file for a period of ten (10) days, or produce and keep it open for inspection at the meeting, as provided in this Section, shall be liable to any shareholder suffering damages on account of such failure to the extent of such damages.

2.7 <u>Quorum</u>. Except as otherwise provided in the Articles of Incorporation or required by law:

(a) A quorum at any annual or special meeting of shareholders shall consist of shareholders representing, either in person or by proxy, a majority of the outstanding shares of the corporation, entitled to vote at such meeting.

(b) The votes of a majority in interest of those present at any properly called meeting or adjourned meeting of shareholders at which a quorum as in this Section defined is presented, shall be sufficient to transact business.

2.8 <u>Voting of Shares</u>. Except as otherwise provided in these Bylaws or to the extent that voting rights of the shares of any class or classes are limited or denied by the Articles of Incorporation, each shareholder, on each matter submitted to a vote at a meeting of shareholders, shall have one vote for each share registered in the shareholder's name on the books of the corporation.

2.9 <u>Closing of Transfer Books and Fixing Record Date</u>. For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders, or any adjournment thereof, or entitled to receive payment of any dividend or in order to make a determination of shareholders for any other proper purpose, the Board may provide that the stock transfer books shall be closed for a stated period not to exceed sixty (60) days nor to be less than ten (10) days preceding such meeting. In lieu of closing the stock transfer books, the Board may fix in advance a record date for any such determination of shareholders, such date to be not more than seventy (70) days and, in case of a meeting of shareholders, not less than ten (10) days prior to the date on which the particular action requiring such determination of shareholders is to be taken. If the stock transfer books are not closed and no record date is fixed for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders, or shareholders entitled to receive payment of a dividend, the date on which notice of the meeting is mailed or the date on which the resolution of the Board declaring such dividend is adopted, as the case may be, shall be the record date for such determination of shareholders. When a determination of shareholders entitled to vote at any meeting of shareholders has been made, as provided in this Section, such determination shall apply to any adjournment thereof, except where the determination has been made through the closing of the stock transfer books and the stated period of closing has expired.

2.10 <u>Proxies</u>. A shareholder may vote either in person or by proxy executed in writing by the shareholder, or his duly authorized attorney-in-fact. No proxy shall be valid after eleven (11) months from the date of its execution, unless otherwise provided in the proxy. Any proxy regular on its face shall be presumed to be valid.

2.11 <u>Action by Shareholders Without a Meeting</u>. Any action required or which may be taken at a meeting of shareholders of the corporation may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the shareholders entitled to vote with respect to the subject matter thereof. Such consent shall have the same force and effect as a unanimous vote of shareholders.

2.12 <u>Waiver of Notice.</u> A waiver of any notice required to be given any shareholders, signed by the person or persons entitled to such notice, whether before or after the time stated therein for the meeting, shall be equivalent of the giving of such notice.

2.13 <u>Action of Shareholders by Communication Equipment</u>. Shareholders may participate in a meeting of shareholders by means of a conference telephone or similar communication equipment by means of which all persons participating in the meeting can hear each other at the same time. Participation by such means shall constitute presence in person at a meeting.

2.14 <u>Voting of Shares by Certain Holders</u>. Shares standing in the name of another corporation may be voted by such officer, agent or proxy as the Bylaws of such corporation may prescribe or, in the absence of such provision, as the board of directors of such corporation may determine.

Shares held by an administrator, executor, guardian or conservator may be voted by him, either in person or by proxy, without a transfer of such shares into his name. Shares standing in the name of a trustee may be voted by him, either in person or by proxy, but no trustee shall be entitled to vote shares held by him without a transfer of such shares into his name.

Shares standing in the name of a receiver may be voted by such receiver, and shares held by or under the control of a receiver may be voted by such receiver without the transfer thereof into his name if authority to do so be contained in an appropriate order of the court by which such receiver was appointed.

A shareholder whose shares are pledged shall be entitled to vote such shares until the shares have been transferred into the name of the pledgee, and thereafter the pledgee shall be entitled to vote the shares so transferred.

**ARTICLE III.**

**<u>SHARES</u>**

3.1 <u>Issuance of Shares</u>. No shares of the corporation shall be issued unless authorized by the Board. Such authorization shall include the maximum number of shares to be issued and the consideration to be received for each share. No certificate shall be issued for any share until such share is fully paid.

3.2 <u>Certificates for Shares</u>. Certificates representing shares of the corporation shall be in such form as shall be determined by the Board. Such certificates shall be signed by the President or a Vice President and by the Secretary or an Assistant Secretary. The signatures of such officers may be facsimiles if the certificate is manually signed on behalf of a transfer agent, or registered by a registrar, other than the corporation itself or an employee of the corporation. Certificates for shares shall be consecutively numbered or otherwise identified. The name and address of the person to whom the shares represented thereby are issued, with the number of shares or other identification and date of issue, shall be entered on the share transfer books of the corporation. All certificates surrendered to the corporation for transfer shall be cancelled and no new certificate shall be issued until the former certificate for a like number of shares shall have been surrendered and cancelled, except that in case of a lost, destroyed or mutilated certificate, a new one may be issued therefor upon such terms and indemnity to the corporation as the Board may prescribe. Each certificate representing shares shall state upon the face thereof:

(a) The name of the issuing corporation.

(b) That the corporation is organized under the laws of the State of Idaho.

(c) The name of the person to whom issued.

(d) The number and class of shares; and the designation of the series, if any, which such certificates represent.

(e) If the issuing corporation is authorized to issue different classes of shares or different series within a class, the designations, relative rights, preferences and limitations applicable to each class and the variations in rights, preferences and limitations determined for each series and the board's authority to determine variations for future series must be summarized on the front or back of each certificate.

Alternatively, each certificate may state conspicuously on its front or back that the corporation will furnish the shareholder this information on request in writing and without charge.

3.3 <u>Transfers</u>.

(a) Transfers of stock shall be made only upon the share transfer books of the corporation, kept at the registered office of the corporation or at its principal place of business, or at the office of its transfer agent or registrar, and before a new certificate is issued the old certificate shall be surrendered for cancellation. The Board may, by resolution, open a share register in any state of the United States, and may employ an agent or agents to keep such register, and to record transfers of shares therein.

(b) Shares shall be transferred by delivery of the certificates therefor, accompanied either by an assignment in writing on the back of the certificate or an assignment separate from certificate, or by a written power of attorney to sell, assign and transfer the same, signed by the holder of said certificate. No shares of stock shall be transferred on the books of the corporation until the outstanding certificates therefor have been surrendered to the corporation.

3.4 <u>Registered Owner</u>. Registered shareholders shall be treated by the corporation as the holders in fact of the stock standing in their respective names and the corporation shall not be bound to recognize any equitable or other claim to or interest in any share on the part of any other person, whether or not it shall have express or other notice thereof, except as expressly provided below or by the laws of the State of Idaho. The Board may adopt by resolution a procedure whereby a shareholder of the corporation may certify in writing to the corporation that all or a portion of the shares registered in the name of such shareholder are held for the account of a specified person or persons. The resolution shall set forth:

(a) The classification of shareholder who may certify;

(b) The purpose or purposes for which the certification may be made;

(c) The form of certification and information to be contained therein;

(d) If the certification is with respect to a record date or closing of the share transfer books, the date within which the certification must be received by the corporation; and

(e) Such other provisions with respect to the procedure as are deemed necessary or desirable.

Upon receipt by the corporation of a certification complying with the procedure, the persons specified in the certification shall be deemed, for the purpose or purposes set forth in the certification, to be the holders of record of the number of shares specified in place of the shareholder making the certification.

3.5 <u>Mutilated, Lost or Destroyed Certificates</u>. In case of any mutilation, loss or destruction of any certificate of stock, another may be issued in its place on proof of such mutilation, loss or destruction. The Board may impose conditions on such issuance and may require the giving of a satisfactory bond or indemnity to the corporation in such sum as they might determine or establish such other procedures as they deem necessary.

3.6 <u>Fractional Shares or Scrip</u>. The corporation may: (a) issue fractions of a share which shall entitle the holder to exercise voting rights, to receive dividends thereon, and to participate in any of the assets of the corporation in the event of liquidation; (b) arrange for the disposition of the fractional interests by those entitled thereto; (c) pay in cash the fair value of fractions of a share as of the time when those entitled to receive such shares are determined; or (d) issue scrip in registered or bearer form which shall entitle the holder to receive a certificate for a full share upon the surrender of such scrip aggregating a full share. The Board may cause such scrip to be issued subject to the condition that it shall become void if not exchanged for certificates representing full shares before a specified date, or subject to the condition that the shares for which such scrip is exchangeable may be sold by the corporation and the proceeds thereof distributed to the holders of such scrip, or subject to any other conditions which the Board may deem advisable.

3.7 <u>Share of Another Corporation</u>. Shares owned by the corporation in another corporation, domestic or foreign, may be voted by such officer, agent or proxy as the Board may determine or, in the absence of such determination, by the President of the corporation.

3.8 <u>ssuance/Consideration</u>.

(a) Shares may be issued at a price determined by the Board of Directors, or the Board may set a minimum price or establish a formula or method by which the price may be determined.

(b) Consideration for shares may consist of cash, promissory notes, services performed, contracts for services to be performed, or any other tangible or intangible property. If shares are issued for other than cash, the Board of Directors shall determine the value of the consideration.

(c) Shares issued when the corporation receives the consideration determined by the Board are validly issued, fully paid and nonassessable.

(d) A good faith judgment of the Board of Directors as to the value of the consideration received for shares is conclusive.

(e) The corporation may place shares issued for a contract for future services or a promissory note in escrow, or make other arrangements to restrict the transfer of the shares, and make credit distributions in respect of the shares against their purchase price, until the services are performed or the note is paid. If the services are not performed or the note is not paid, the shares escrowed or restricted and the distributions credited maybe cancelled in whole or in part.

3.9 <u>Restriction on Transfer</u>. All certificates representing unregistered shares of the corporation shall bear the following legend on the face of the certificate or on the reverse of the certificate if a reference to the legend is contained on the face:

THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE LAW, AND NO INTEREST THEREIN MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (A) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION INVOLVING SAID SECURITIES OR (B) THIS CORPORATION RECEIVES AN OPINION OF LEGAL COUNSEL FOR THE HOLDER OF THESE SECURITIES (CONCURRED IN BY LEGAL COUNSEL FOR THIS CORPORATION) STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION OR THIS CORPORATION OTHERWISE SATISFIED ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION. NEITHER THE OFFERING OF THE SECURITIES NOR ANY OFFERING MATERIALS HAVE BEEN REVIEWED BY ANY ADMINISTRATOR UNDER THE SECURITIES ACT OF 1933, OR ANY APPLICABLE STATE LAW. THE TRANSFER AGENT HAS BEEN ORDERED TO EFFECTUATE TRANSFERS OF THIS CERTIFICATE ONLY IN ACCORDANCE WITH THE ABOVE INSTRUCTIONS.

**ARTICLE IV.**

**<u>BOARD OF DIRECTORS</u>**

4.1 <u>Number and Powers</u>. All corporate powers shall be exercised by or under the authority of, and the business and affairs of a corporation shall be managed under the direction of the Board, except as may be otherwise provided in the Articles of Incorporation. The Board shall consist of not less than one (1) persons nor more than fifteen (15) persons, who shall be elected for a term of one (1) year, and shall hold office until their successors are elected and qualify. Directors need not be shareholders or residents of the State of Idaho. In addition to the powers and authorities expressly conferred upon the corporation by these Bylaws and the Articles of Incorporation, the Board may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the Articles of Incorporation or by these Bylaws directed or required to be exercised or done by the shareholders.

4.2 <u>Change of Number</u>. Any vacancy occurring in the Board, whether caused by resignation, death or otherwise, may be filled by the affirmative vote of a majority of the remaining directors though less than a quorum of the Board. A director elected to fill any vacancy shall hold office for the unexpired term of his predecessor and until his successor is elected and qualified. Any directorship to be filled by reason of an increase in the number of directors may be filled by the Board for a term of office continuing only until the next election of directors by the shareholders.

4.3 <u>Removal of Directors</u>. At a meeting of shareholders called expressly for that purpose, the entire Board, or any member thereof, may be removed, with or without cause. A director may be removed only if the number of votes cast to remove him exceeds the number of votes cast not to remove him.

4.4 <u>Regular Meetings</u>. Regular meetings of the Board or any committee designated by the Board may be held without notice at the principal place of business of the corporation or at such other place or places, either within or without the State of Idaho, as the Board or such committee, as the case may be, may from time to time designate. The annual meeting of the Board shall be held without notice immediately after the adjournment of the annual meeting of shareholders.

4.5 <u>Special Meetings</u>.

(a) Special meetings of the Board may be called at any time by the President, Secretary or by any one director, to be held at the principal place of business of the corporation or at such other place or places as the Board or the person or persons calling such meeting may from time to time designate.

(b) Special meetings of any committee may be called at any time by such person or persons and with such notice as shall be specified for such committee by the Board or, in the absence of such specification, in the manner and with the notice required for special meetings of the Board.

4.6 <u>Notice of Special Meetings</u>. Written notice of each special meeting of the Board shall be delivered personally, telegraphed or mailed to each director at his address shown on the records of the corporation at least two (2) days before the meeting. Notice shall be effective upon delivery at such address, provided that notice by mail shall also be deemed effective if deposited in the United States mail properly addressed with postage prepaid at least five (5) days before the meeting, and notice by telegraph shall also be deemed effective if the content thereof is delivered to the telegraph company at least three (3) days before the meeting. Neither the business to be transacted at nor the purpose of any special meeting need be specified in the notice of such meeting.

4.7 <u>Quorum</u>. A majority of the directors shall constitute a quorum for the transaction of business at any Board meeting, but if less than a majority is present at a meeting, a majority of the directors may adjourn the meeting from time to time without further notice.

4.8 <u>Manner of Acting</u>. The act of the majority of the directors present at a meeting at which there is a quorum shall be the act of the Board.

4.9 <u>Waiver of Notice</u>.

(a) Whenever any notice is required to be given to any director or a committee member under the provisions of these Bylaws, the Articles of Incorporation or the Idaho Business Act, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Neither the business to be transacted at nor the purpose of any regular or special meeting of the Board or a committee need be specified in the waiver of notice of such meeting.

(b) The attendance of a director or a committee member at a meeting shall constitute a waiver of notice of such meeting, except where the director or a committee member attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

4.10 <u>Presumption of Assent</u> A director of the corporation present at a Board meeting at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless his dissent is entered in the minutes of the meeting, or unless he files his written dissent to such action with the person acting as the secretary of the meeting before the adjournment thereof, or unless he forwards such dissent by registered mail to the Secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a director who voted in favor of such action.

4.11 <u>Resignation</u>. Any director may resign at any time by delivering written notice to the President or the Secretary, or to the registered office of the corporation, or by giving oral notice at any meeting of the directors or shareholders.

4.12 <u>Executive and Other Committees</u>. The Board, by resolution adopted by a majority of the full board of directors, may designate from among its members an executive committee and one or more other committees each of which, to the extent provided in such resolution of the Articles of Incorporation or these Bylaws, shall have and may exercise all the authority of the Board, except that no such committee shall have the authority to: (1) declare dividends, except at a rate or in periodic amount determined by the Board; (2) approve or recommend to shareholders actions or proposals required by this title to be approved by shareholders; (3) fill vacancies on the Board or any committee thereof; (4) amend the Bylaws; (5) authorize or approve the reacquisition of shares unless pursuant to general formula or method specified by the Board; (6) fix compensation of any director for serving on the Board or on any committee; (7) approve a plan of merger, consolidation, or exchange of shares not requiring shareholder approval; (8) reduce earned or capital surplus; or (9) appoint other committees of the Board or the members thereof.

4.13 <u>Remuneration</u>. By Board resolution, directors and committee members may be paid their expenses, if any, of attendance at each Board or committee meeting, or a fixed sum for attendance at each Board or committee meeting, or a stated salary as director or a committee member, or a combination of the foregoing. No such payment shall preclude any director or committee member from serving the corporation in any other capacity and receiving compensation therefor.

4.14 <u>Loans to Directors - Guarantees of Obligations of Director</u>. A corporation may not lend money to or guarantee the obligation of a director of the corporation.

4.15 <u>Action by Directors Without a Meeting</u>. Any action required or which may be taken at a meeting of the directors, or of a committee thereof, may be taken without a meeting if a consent in writing, setting forth the action so taken or to be taken, shall be signed by all of the directors, or all of the members of the committee, as the case may be. Such consent shall have the same effect as a unanimous vote.

4.16 <u>Participation of Directors by Communication Equipment</u>. Members of the Board or committees designated by the Board may participate in a meeting of the Board or a committee by means of a conference telephone or similar communication equipment by means of which all persons participating in the meeting can hear each other at the same time. Participation by such means shall constitute presence in person at a meeting.

4.17 <u>Duties of Directors</u>. A director of the corporation shall perform the duties of a director, including the duties as a member of any committee of the Board upon which the director may serve, in good faith, in a manner such director believes to be in the best interests of the corporation, and with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances.

In performing the duties of a director, a director shall be entitled to rely on information, opinion, reports, or statements, including financial statements and other financial data, in each case prepared or presented by:

(a) One or more officers or employees of the corporation whom the director believes to be reliable and competent in the matter presented;

(b) Counsel, public accountants, or other persons as to matters which the director believes to be within such person's professional or expert competence; or

(c) A committee of the Board upon which the director does not serve, duly designated in accordance with a provision in the Articles of Incorporation or these Bylaws, as to matters within its designated authority, which committee the director believes to merit confidence; so long as, in any such case, the director acts in good faith, after reasonable inquiry when the need therefor is indicated by the circumstances and without knowledge that would cause such reliance to be unwarranted.

4.18 <u>Liability of Directors in Certain Cases</u>. In addition to any other liabilities, directors shall be liable in the following circumstances unless they comply with the standard provided under Idaho law.

(a) Directors of the corporation who vote for or assent to the declaration of any dividend or other distribution of the assets of the corporation to its shareholders contrary to the provisions of the Idaho Business Corporation Act (the "Act"), or contrary to any restrictions contained in the Articles of Incorporation, shall be jointly and severally liable to the corporation for the amount of such dividend which is paid or the value of such assets which are distributed in excess of the amount of such dividend or distribution which could have been paid or distributed without a violation of the provisions of the Act or the restrictions in the Articles of Incorporation.

(b) Directors of this corporation who vote for or assent to the purchase of their own shares contrary to the provisions of the Act shall be jointly and severally liable to the corporation for the amount of consideration paid for such shares which is in excess of the maximum amount which could have been paid therefor without a violation of the provisions of the Act.

(c) Directors of the corporation who vote for or assent to any distribution of assets of the corporation to its shareholders during the liquidation of the corporation without the payment and discharge of, or making adequate provision for, all known debts, obligations, and liabilities of the corporation shall be jointly and severally liable to the corporation for the value of such assets which are distributed, to the extent that such debts, obligations, and liabilities of the corporation are not thereafter paid and discharged.

(d) Directors of the corporation who vote for or assent to the making of a loan to an officer or director of the corporation, or the making of any loan secured by shares of the corporation, shall be jointly and severally liable to the corporation for the amount of such loan until the repayment thereof, unless approved by the shareholders.

Any director against whom a claim shall be asserted under or pursuant to this Section for the payment of a dividend or other distribution of assets of the corporation and who shall be held liable thereon, shall be entitled to contribution from the shareholders who accepted or received any such dividend or assets, knowing such dividend or distribution to have been made in violation of the Act, in proportion to the amounts received by them respectively.

Any director against whom a claim shall be asserted under or pursuant to this Section shall be entitled to contribution from the other directors who voted for or assented to the action upon which the claim is asserted and who did not comply with the standard provided in this Section for the performance of the duties of directors.

4.19 <u>Corporation Transactions with Interested Director</u>.

(1) No contract or other transaction between the corporation and a director thereof, or between the corporation and any other corporation, firm, association or other entity in which a director of the corporation has a substantial financial interest, shall be either void or voidable for this reason alone, or by reason alone that such director is present at the meeting of the board, or of a committee thereof, which authorizes, approves or ratifies such contract or transactions, or that such director's vote is counted for such purpose:

(a) If the material facts as to the contract or other transaction and as to such director's interest in such contract or transaction, or as to any such financial interest, are fully disclosed or known to the Board or committee, and the Board or committee authorizes, approves or ratifies such contract or transaction in good faith by a vote sufficient for such purpose without counting of such interested director, or if the votes of the disinterested directors are insufficient to constitute an act of the Board as defined under Idaho law, by unanimous vote of the disinterested directors; or

(b) If the material facts as to the contract or other transaction and as to such director's interest in such contract or transaction, or as to any such financial interest, are fully disclosed or known to the shareholders entitled to vote thereon, and such contract or transaction is authorized, approved or ratified by the vote of the holders of a majority of the shares entitled to vote thereon, with the shares owned by the interested director not being entitled to vote thereon.

(2) If the material facts as to the contract or other transaction and as to such director's interest in such contract or transaction, or as to any such financial interest, are fully disclosed or known to the shareholders entitled to vote thereon, and such contract or transaction is authorized, approved or ratified by the vote of the holders of a majority of the shares entitled to vote thereon, including the vote of shares owned by the interested director, the corporation may avoid the contract or transaction if it sustains the burden of proving that the contract or transaction was not fair and reasonable to the corporation at the time it was authorized, approved or ratified by the shareholders.

(3) If the material facts as to the contract or other transaction or as to such director's interest in such contract or transaction, or as to any such financial interest, were not fully disclosed or known to the Board, committee or shareholders authorizing, approving or ratifying such contract or transaction, or if the contract or transaction was not authorized, approved or ratified in the manner described in subparagraphs (1)(a) or (1)(b), or in paragraph (2), the corporation may avoid the contract or transaction unless the person asserting the validity of the contract or transaction sustains the burden of proving that the contract or transaction was fair and reasonable to the corporation at the time it was authorized, approved, or ratified by the Board, committee or shareholders, or that the contract or transaction was fair and reasonable to the corporation at the time it was entered into, if the contract or transaction was never authorized, approved, or ratified by the Board, a committee or the shareholders.

(4) For the purposes of this Section:

(a) "Substantial financial interest" shall exclude the interest of a person in a corporation, firm, association, or other entity solely by reason of being a director, an officer or an employee, or their equivalents, thereof,

(b) A director is not interested in a resolution fixing the compensation of another director as a director, an officer or an employee of the corporation, notwithstanding the fact that the first director is also receiving compensation from the corporation.

(c) Any contract or transaction between a corporation and a person, corporation, firm, association, or other entity made in the ordinary course of business at standard prices, or on terms not less favorable to the corporation than those offered by the person, corporation, firm, association, or other entity to others, shall be prima facie fair and reasonable.

(5) Interested directors may be counted in determining the presence of a quorum at a meeting of the Board or of a committee which authorizes, approves, or ratifies such contract or transaction and their shares may be counted in determining the presence of a quorum at a meeting of shareholders which authorizes, approves, or ratifies such contract or transaction.

4.20 <u>Corporation Transactions Involving Common Directorships</u>.

(1) No contract or other transaction between a corporation and any other corporation, firm, association, or other entity of which one of its directors is a director, an officer or an employee, or their equivalents, shall be either void or voidable for this reason alone, or by reason alone that such director is present at the meeting of the Board or a committee thereof which authorizes, approves or ratifies the contract or transaction, or that such director's vote is counted for such purpose:

(a) If the material facts as to the contract or other transaction and as to the director's relationship with the other entity are fully disclosed or known to the Board or committee, and the Board or committee authorizes, approves, or ratifies the contract or transaction in good faith by a vote sufficient for such purpose without counting the vote of the director who is a director, an officer, or an employee of the other entity, or if the votes of unrelated directors are insufficient to constitute an act of the Board by a majority vote of unrelated directors; or

(b) If the material facts as to the contract or other transaction and as to the director's relationship with the other entity are fully disclosed or known to the shareholders entitled to vote thereon, and such contract is authorized, approved or ratified by the vote of the holders of a majority of the shares entitled to vote thereon.

(2) If the material facts as to the contract or transaction or as to the director's relationship to the other entity were not fully disclosed or known to the Board, committee or shareholders, or if the contract or transaction was not authorized, approved or ratified in the manner described in subparagraphs (1)(a) or (1)(b), the corporation may avoid the contract or transaction if it sustains the burden of proving that the contract or transaction was not fair and reasonable to the corporation at the time that it was authorized, approved or ratified by the Board, committee or shareholders, or that the contract or transaction was not fair and reasonable to the corporation at the time that it was authorized, approved or ratified by the Board, committee or shareholders, or that the contract or transaction was not fair and reasonable to the corporation at the time it was entered into, if the contract or transaction was never authorized, approved, or ratified by the Board, a committee or the shareholders.

(3) Directors who are directors, officers, or employees of another entity may be counted in determining the presence of a quorum at a meeting of the Board or of a committee which authorizes, approves or ratifies a contractor transaction with such other entity, and shares owned by such directors maybe counted in determining the presence of a quorum at a meeting of shareholders which authorizes, approves or ratifies such a contract or transaction.

**ARTICLE V.**

**<u>OFFICERS</u>**

5.1 <u>Designations</u>. The officers of the corporation shall be a President, one or more Vice Presidents (one or more of whom may be Executive Vice Presidents), a Secretary and a Treasurer, and such Assistant Secretaries and Assistant Treasurers as the Board may designate, who shall be elected for one year by the directors at their first meeting after the annual meeting of shareholders, and who shall hold office until their successors are elected and qualify. Any two or more offices may be held by the same person.

5.2 <u>The President</u>. The President shall preside at all meetings of shareholders and directors, shall have general supervision of the affairs of the corporation, and shall perform all such other duties as are incident to such office or are properly required of the President by the Board.

5.3 <u>Vice Presidents</u>. During the absence or disability of the President, the Executive Vice Presidents, if any, and the Vice Presidents in the order designated by the Board, shall exercise all the functions of the President. Each Vice President shall have such powers and discharge such duties as may be assigned to the Vice President from time to time by the Board.

5.4 <u>Secretary and Assistant Secretaries</u>. The Secretary shall issue notices for all meetings, except for notices for special meetings of the shareholders and special meetings of the directors which are called by the requisite number of shareholders or directors, shall keep minutes of all meetings, shall have charge of the seal and the corporate books, and shall make such reports and perform such other duties as are incident to such office, or are properly required of the Secretary by the Board. The Assistant Secretary, or Assistant Secretaries, in the order designated by the Board, shall perform all of the duties of the Secretary during the absence or disability of the Secretary, and at other times may perform such duties as are directed by the President or the Board.

5.5 <u>The Treasurer</u>. The Treasurer shall have the custody of all monies and securities of the corporation and shall keep regular books of account. The Treasurer shall disburse the funds of the corporation in payment of the just demands against the corporation or as may be ordered by the Board, taking proper vouchers for such disbursements, and shall render to the Board from time to time, as may be required of the Treasurer, an account of all such transactions as Treasurer and of the financial condition of the corporation. The Treasurer shall perform such other duties incident to such office or that are properly required of the Treasurer by the Board. The Assistant Treasurer, or Assistant Treasurers in the order designated by the Board, shall perform all of the duties of the Treasurer in the absence or disability of the Treasurer, and at other times may perform such other duties as are directed by the President or the Board.

5.6 <u>Delegation</u>. In the case of absence or inability to act of any officer of the corporation and of any person herein authorized to act in such person's place, the Board may from time to time delegate the powers or duties of such officer to any other officer or any director or other person whom it may select.

5.7 <u>Vacancies</u>. Vacancies in any office arising from any cause may be filled by the Board at any regular or special meeting of the Board.

5.8 <u>Other Officers</u>. The Board may appoint such other officers and agents as it shall deem necessary or expedient, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board.

5.9 <u>Loans</u>. No loans shall be made by the corporation to any officer.

5.10 <u>Term-Removal</u>. The officers of the corporation shall hold office until their successors are chosen and qualify. Any officer or agent may be removed by the Board whenever in its judgment the best interest of the corporation will be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed.

5.11 <u>Bonds</u>. The Board may, by resolution, require any and all of the officers to give bonds to the corporation, with sufficient surety or sureties, conditioned for the faithful performance of the duties of their respective offices, and to comply with such other conditions as may from time to time be required by the Board.

5.12 <u>Salaries</u>. The salaries, if any, of the officers shall be fixed from time to time by the Board, and no officer shall be prevented from receiving such salary by reason of the fact that he is also a director of the corporation.

**ARTICLE VI.**

**<u>DIVIDENDS AND FINANCE</u>**

6.1 <u>Dividends</u>. The Board may, from time to time, declare and the corporation may pay dividends on its outstanding shares in cash, property, or its own shares, except when the corporation is insolvent or when the payment thereof would render the corporation insolvent or when the declaration or payment thereof would be contrary to any restrictions contained in the Articles of Incorporation subject to the following provisions:

(1) Except as otherwise provided in this Section, dividends may be declared and paid in cash or property only out of:

(a) The unreserved and unrestricted net earned surplus of the corporation, or

(b) The unreserved and unrestricted net earnings of the current fiscal year and the next preceding fiscal year taken as a single period. No dividend out of unreserved and unrestricted net earnings so computed shall be paid which would reduce the net assets of the corporation below the aggregate preferential amount payable in the event of voluntary liquidation to the holders of shares having preferential rights to the assets of the corporation in the event of liquidation.

(2) Dividends may be declared and paid in its own treasury shares.

(3) Dividends may be declared and paid in its own authorized but unissued shares out of any unreserved and unrestricted surplus of the corporation upon the following conditions:

(a) If a dividend is payable in its own shares having a par value, such shares shall be issued at not less than the par value thereof and there shall be transferred to stated capital at the time such dividend is paid an amount of surplus equal to the aggregate par value of the shares to be issued as a dividend.

(b) If a dividend is payable in its own shares without par value, such shares shall be issued at such stated value as shall be fixed by the Board by resolution adopted at the time such dividend is declared, and there shall be transferred to stated capital at the time such dividend is paid an amount of surplus equal to the aggregate stated value so fixed in respect of such shares; and the amount per share so transferred to stated capital shall be disclosed to the shareholders receiving such dividend concurrently with the payment thereof.

6.2 <u>Reserves</u>. Before making any distribution of earned surplus, there may be set aside out of the earned surplus of the corporation such sum or sums as the directors from time to time in their absolute discretion deem expedient as a reserve fund to meet contingencies, or for equalizing dividends, or for maintaining any property of the corporation, or for any other purpose; and any earned surplus of any year not distributed as dividends shall be deemed to have been thus set apart until otherwise disposed of by the Board.

6.3 <u>Depositories</u>. The monies of the corporation shall be deposited in the name of the corporation in such bank or banks or trust company or trust companies as the Board shall designate, and shall be drawn out only by check or other order for payment of money signed by such persons and in such manner as may be determined by resolution of the Board.

**ARTICLE VII.**

**<u>NOTICES</u>**

Except as may otherwise be required by law, any notice to any shareholder or director may be delivered personally or by mail. If mailed, the notice shall be deemed to have been delivered when deposited in the United States mail, addressed to the addressee at his last known address in the records of the corporation, with postage thereon prepaid.

**ARTICLE VIII.**

**<u>INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS</u>**

8.1 <u>Definitions</u>.

(a) "Director" means any person who is or was a director of the corporation and any person who, while a director of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, other enterprise, or employee benefit plan.

(b) "Corporation" includes any domestic or foreign predecessor entity of the corporation in a merger, consolidation, or other transaction in which the predecessor's existence ceased upon consummation of such transaction.

(c) "Expenses" includes attorneys' fees.

(d) "Official capacity" means: (i) When used with respect to a director, the office of director in the corporation, and (ii) when used with respect to a person other than a director as contemplated in Section 8.10 of this Article, the elective or appointive office in the corporation held by the officer or the employment or agency relationship undertaken by the employee or agent in behalf of the corporation, but in each case does not include service for any other foreign or domestic corporation or any partnership, joint venture, trust, other enterprise, or employee benefit plan.

(e) "Party" includes a person who was, is, or is threatened to be, made a named defendant or respondent in a proceeding.

(f) "Proceeding" means any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative.

8.2 <u>Director Indemnification</u>. The corporation shall indemnify any person made a party to any proceeding (other than a Proceeding referred to in Section 8.3 of this Article), by reason of the fact that he is or was a director, against judgments, penalties, fines, settlements and reasonable Expenses actually incurred by him in connection with such Proceeding if:

(a) He conducted himself in good faith, and: (i) in the case of conduct in his own official capacity with the corporation, he reasonably believed his conduct to be in the corporation's best interests, or (ii) in all other cases, he reasonably believes his conduct to be at least not opposed to the corporation's best interests; and

(b) In the case of any criminal Proceeding, he had no reasonable cause to believe his conduct was unlawful.

The termination of any Proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself be determinative that the person did not meet the requisite standard of conduct set forth in this subsection.

8.3 <u>Expenses</u>. The corporation shall indemnify any person made a party to any proceeding by or in the right of the corporation, by reason of the fact that he is or was a director, against reasonable expenses actually incurred by him in connection with such proceeding if he conducted himself in good faith, and:

(a) In the case of conduct in his official capacity with the corporation, he reasonably believed his conduct to be in its best interests; or

(b) In all other cases, he reasonably believed his conduct to be at least not opposed to its best interests; provided that no indemnification shall be made pursuant to this Section in respect of any proceeding in which such person shall have been adjudged to be liable to the corporation.

8.4 <u>Exclusion</u>. A director shall not be indemnified under Section 8.2 or 8.3 of this Article in respect to any Proceeding charging improper personal benefit to him, whether or not involving action in his official capacity, in which he shall have been adjudged to be liable on the basis that personal benefit was improperly received by him.

8.5 <u>Court Authority</u>. Unless otherwise limited by the Articles of Incorporation:

(a) A director who has been wholly successful, on the merits or otherwise, in the defense of any proceeding referred to in Section 8.2 or 8.3 of this Article shall be indemnified against reasonable expenses incurred by him in connection with the proceeding; and

(b) A court of appropriate jurisdiction upon application of a director and such notice as the court shall require shall have authority to order indemnification in the following circumstances: (i) if the court determines a director is entitled to reimbursement under (a) of this subsection, the court shall order indemnification, in which case the director shall be entitled to recover the expenses of securing such

reimbursement; or (ii) if the court determines that the director is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not he has met the standards set forth in Section 8.2 or 8.3 of this Article or has been adjudged liable under Section 8.4 of this Article, the court may order such indemnification as the court shall deem proper, except that indemnification with respect to any proceeding referred to in Section 8.3 of this Article and with respect to any proceedings in which liability shall have been adjudged pursuant to Section 8.4 of this Article shall be limited to Expenses.

8.6 <u>Corporate Approval</u>. No indemnification under Section 8.2 or 8.3 of this Article shall be made by the corporation unless authorized in the specific case after a determination that indemnification of the director is permissible in the circumstances because he has met the standard of conduct set forth in the applicable Section. Such determination shall be made:

(a) By the Board by a majority vote of a quorum consisting of directors not at the time parties to such proceedings; or

(b) If such a quorum cannot be obtained, then by a majority vote of a committee of the Board, duly designated to act in the matter by a majority vote of the full Board (in which designation directors who are parties may participate), consisting solely of two or more directors not at the time parties to such proceeding; or

(c) In a written opinion by legal counsel other than an attorney, or a firm having associated with it an attorney, who has been retained by or who has performed services within the past three years for the corporation or any party to be indemnified, selected by the Board or a committee thereof by vote as set forth in (a) or (b) of this subsection, or if the requisite quorum of the full Board cannot be obtained therefor and such committee cannot be established, by a majority vote of the full Board (in which selection directors who are parties may participate); or

(d) By the shareholders.

Authorization of indemnification and determination as to reasonableness of expenses shall be made in the same manner as the determination that indemnification is permissible, except that if the determination that indemnification is permissible is made by such legal counsel, authorization of indemnification and determination as to reasonableness of expenses shall be made in a manner specified in (c) of this Section for the selection of such counsel. Shares held by directors who are parties in the proceeding shall not be voted on the subject matter under this subsection.

8.7 <u>Expenses Prior to Final Disposition</u>. Reasonable expenses incurred by a director who is party to a proceeding may be paid or reimbursed by the corporation in advance of the final disposition of such Proceeding:

(a) Upon receipt by the corporation of a written undertaking by or on behalf of the director to repay such amount if it shall ultimately be determined that the director has not met the standard of conduct necessary for indemnification by the corporation as authorized by this section; and

(b) Either:

(i) After a determination, made in the manner specified by Section 8.6 of this Article, that the information then known to those making the determination (without undertaking further investigation for purposes thereof) does not establish that indemnification would not be permissible under Section 8.2 or 8.3 of this Article; or

(ii) Upon receipt by the corporation of a written affirmation by the director of his good faith belief that he has met the standard of conduct necessary for indemnification by the corporation as authorized in this section.

The undertaking required by (a) of this subsection shall be an unlimited general obligation of the director but need not be secured and may be accepted without reference to financial ability to make the repayment.

Payments under this subsection may be authorized in the manner specified in Section 8.6 of this Article.

8.8 <u>Intentional Acts</u>. Any corporation shall have power to make or agree to any further indemnity, including advance of expenses, to any director that is authorized by the articles of incorporation, any bylaw adopted or ratified by the shareholders, or any resolution adopted or ratified, before or after the event, by the shareholders, provided that no such indemnity shall indemnify any director from or on account of acts or omissions of such director finally adjudged to be intentional misconduct or a knowing violation of law, or from or on account of conduct of such director finally adjudged to be in violation of, from or on account of any transaction with respect to which it was finally adjudged that such director personally received a benefit in money, property, or services to which the director was not legally entitled. Unless the articles of incorporation, or any such bylaw or resolution provide otherwise, any determination as to any further indemnity shall be made in accordance with Section 8.6 of this Article. Each such indemnity may continue as to a person who has ceased to be a director and may inure to the benefit of the heirs, executors, and administrators of such a person.

8.9 <u>Officer Indemnification</u>. For purposes of this Article, the corporation shall be deemed to have requested a director to serve an employee benefit plan where the performance by him of his duties to the corporation also imposes duties on, or otherwise involves services by, him to the plan or participants or beneficiaries of the plan; excise taxes assessed on a director with respect to an employee benefit plan pursuant to applicable law shall be deemed "fines"; and action taken or omitted by him with respect to an employee benefit plan in the performance of his duties for a purpose reasonably believed by him to be in the interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose which is not opposed to the best interests of the corporation.

8.10 <u>Insurance</u>. The corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the corporation or is or was serving at the request of the corporation as an officer, employee or agent of another corporation, partnership, joint venture, trust, other enterprise, or employee benefit plan against any liability asserted against him and incurred by him in any such capacity or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under the provisions of this Article.

8.11 <u>Employee and Agent Indemnification</u>. The corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the corporation or is or was serving at the request of the corporation as an officer, employee or agent of another corporation, partnership, joint venture, trust, other enterprise, or employee benefit plan against any liability asserted against him and incurred by him in any such capacity or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under the provisions of this Article.

8.12 <u>Indemnification Report</u>. Any indemnification of a director in accordance with this Article, including any payment or reimbursement of expenses, shall be reported to the shareholders with the notice of the next shareholders' meeting or prior thereto in a written report containing a brief description of the proceedings involving the director being indemnified and the nature and extent of such indemnification.

**ARTICLE IX.**

**<u>BOOKS AND RECORDS</u>**

The corporation shall keep correct and complete books and records of account and shall keep minutes of the proceedings of its shareholders and Board; and shall keep at its registered office or principal place of business, or at the office of its transfer agent or registrar, a record of its shareholders, giving the names and addresses of all shareholders and the number and class of the shares held by each. Any books, records, and minutes may be in written form or any other form capable of being converted into written form within a reasonable time.

**ARTICLE X.**

**<u>AMENDMENTS</u>**

10.1 <u>By Shareholders</u>. These Bylaws may be altered, amended or repealed by the affirmative vote of a majority of the voting stock issued and outstanding at any regular or special meeting of the shareholders.

10.2 <u>By Directors</u>. The Board shall have power to make, alter, amend and repeal the Bylaws of this corporation. However, any such Bylaws, or any alteration, amendment or repeal of the Bylaws, may be changed or repealed by the holders of a majority of the stock entitled to vote at any shareholders' meeting.

10.3 <u>Emergency Bylaws</u>. The Board may adopt emergency Bylaws, to repeal or change by action of the shareholders, which shall be operative during any emergency in the conduct of the business of the corporation resulting from an attack on the United States or any nuclear or atomic disaster.

**ARTICLE XI.**

**<u>CONTROL SHARE ACQUISITION ACT</u>**

The Corporation chooses not to be subject to the provisions of the Control Share Acquisition Act of the Idaho Statutes.

**ARTICLE XII.**

**<u>BUSINESS COMBINATIONS ACT</u>**

The corporation elects not to be subject to the provisions of the Business Combinations Act of the Idaho Statutes.

**ARTICLE XIII**

**<u>APPROVAL OF A DOMESTICATION</u>**

The Corporation may, by affirmative vote of its Board of Directors, decide to domesticate this corporation in any state of the United States. The Board of Directors may proceed to implement its decision by instructing the appropriate officers of the corporation to carry out domestication in accordance with applicable law. Shareholder approval of the Board's decision to domesticate is not required.

Adopted by resolution of the corporation's Board on the 21<sup>st</sup> day of December 2010.

  <br> Dennis O'Brien, Secretary

## Exhibit 3.3

**EXHIBIT 3.3**

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## Exhibit 3.4

**EXHIBIT 3.4**

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## Exhibit 3.5

**EXHIBIT 3.5**

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## Exhibit 3.6

**EXHIBIT 3.6**

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## Exhibit 3.7

**EXHIBIT 3.7**

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## Exhibit 3.8

**EXHIBIT 3.8**

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## Exhibit 3.9

**EXHIBIT 3.9**

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## Exhibit 3.10

**EXHIBIT 3.10**

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## Exhibit 3.11

**EXHIBIT 3.11**

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## Exhibit 3.12

**EXHIBIT 3.12**

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## Exhibit 3.13

**EXHIBIT 3.13**

## Exhibit 3.14

**EXHIBIT 3.14**

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## Exhibit 3.15

**EXHIBIT 3.15**

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## Exhibit 3.16

**EXHIBIT 3.16**

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## Exhibit 3.17

**EXHIBIT 3.17**

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## Exhibit 3.18

**EXHIBIT 3.18**

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## Exhibit 3.19

**EXHIBIT 3.19**

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## Exhibit 3.20

**EXHIBIT 3.20**

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## Exhibit 3.21

**EXHIBIT 3.21**

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## Exhibit 10.1

**EXHIBIT 10.1**

<u>EXECUTIVE EMPLOYMENT AGREEMENT</u>

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement")' is made to be effective as of January 1, 2014 (the "Effective Date"), between Solar Wind Energy, Inc.(FKA Clean Wind Energy, Inc.), a Delaware Corporation (the "Company"), Solar Wind Energy Tower, Inc., a Nevada corporation ("Solar") and Ronald W. Pickett (the "Executive").

Recitals:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Executive has been employed by the Company and Solar since December 29, 2010 in the capacity of President, Chief Executive Officer and Chairman of the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Company is a wholly owned subsidiary of Solar.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Executive and Company are parties to an Executive Employment Agreement dated September 10, 2010 (the "Prior Agreement").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Executive is the holder of a note issued by Solar in the amount of two hundred thousand and 00/100 Dollars ($200,000.00) dated April 18, 2014 (the "Note") and a Convertible Debenture in the amount of One Hundred Fifty Thousand and 00/100 Dollars($15, 0000.00) dated December 31, 2012, also issued by Solar.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. Solar has issued Executive a Warrant to Purchase Thirty Million Eight Hundred Sixty Four Thousand One Hundred Ninety Eight (30,864,198)fully paid and non-assessableshares of Solar common stock (the "Warrant").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. The parties have agreed to (i) extend the Executive's term of employment (ii) to provide for automatic salary increases in the event the Company achieves certain developmental milestones (iii) to confirm Executive' s right to convert accrued but unpaid salary to promissory notes payable from Solar to Executive and (iv) to confirm Executive's right to receive warrants from Solar to purchase shares of Solar's common stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G. The parties desire to amend and restate the terms of their executive employment relationship and to terminate the Prior Agreement and replace it with this Agreement.

In consideration of the promises and covenants set forth in this Agreement and for other good and valuable consideration , the receipt and sufficiency of which is hereby acknowledged , the parties agree to the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>EMPLOYMENT AND DUTIES.</u> Company and Solar employ Executive as its President and Chief Executive Officer. Executive shall report only to the Board of Directors of Company and Solar, as the case may be. President shall be responsible for providing strategic leadership for Company and Solar by working with their respective Boards of Directors and other management to establish long-range goals, strategies, plans, and policies. The following conditions shall apply to Executive's employment under this Agreement: (i) Executive shall be permitted to work from home at his discretion; (ii) Executive shall be the Company and Solar's only President and Chief Executive Officer and no other individual shall hold the position of President, Chief Executive Officer or co-President or co-Chief Executive Officer; (iii) other than the Board of Directors, no individual or individuals, whether acting as a committee or otherwise, shall have executive authority over or equal to that of the Executive and neither the Company nor Solar shall take any action which would or could have the effect of giving any individual(s) such authority or which appears to give any individual(s) such authority; (iv) Executive's title may not be changed or modified in any way; (v) Executive's duties shall not be changed in any way from those he has performed previously, nor shall Executive' s duties or responsibilities be reduced in any way; (vi) Executive shall devote sufficient time to the performance of his duties as President, Chief Executive Officer of both Company and Solar; (viii) Executive shall be entitled to the full protection of all applicable indemnification provisions of the Company and Solar's Articles of Incorporation and bylaws, for his service as a director, executive officer and employee of the Company and Solar.

If: (i) Company or Solar changes the Executive's duties and responsibilities as those duties are set forth in this Section 1 without Executive's consent (including, without limitation, violation of any of the provisions of clauses (ii)-(v) above; (ii) there occurs a breach by Company or Solar of any of their obligations under this Agreement that has not been cured in all material respects within ten (10) days after the Executive gives notice thereof to the Company or Solar, as the case may be; (iii) there occurs a "change in control" (as that term is defined below) with respect to either Company or Solar or; (iv) the Executive has not been paid for a cumulative sixty (60) day period without Executive's consent, then Executive shall have the right to terminate his employment with Company and Solar, but such termination shall not be considered a voluntary resignation or termination of such employment or of this Employment Agreement by the Executive but rather a discharge of the Executive by the Company and Solar "without cause" (as that term is defined below). For purposes of this Agreement, the term "change in control" means the first to occur of the following events:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any person or group of commonly controlled persons acquires , directly or indirectly, fifty percent (50%) or more of the voting control or value of the equity interests in the Company or Solar; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the shareholders of Company or Solar approving an agreement to merge or consolidate with another corporation or other entity resulting (whether separately or in connection with a series of transactions) in a change in ownership of fifty percent (50%) or more of the voting control or value of the equity interests in Company or Solar, or an agreement to sell or otherwise dispose of all or substantially all of Company or Solar's assets (including, without limitation, a plan of liquidation or dissolution,) or otherwise approve of a fundamental alteration in the nature of the Company or Solar' s business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. TERM. The term of this Agreement shall begin on the Effective Date and shall <u>continue</u> through December 31, 2018 (the "Initial Term"). Following the expiration of the Initial Term, this Agreement shall automatically renew for successive one (1) year terms, up to a maximum of ten (10) additional years, unless either party notifies the other in writing of his or its desire not to renew at least ninety (90) days prior to the expiration of the then current term.

3 . <u>COMPENS</u><u>ATION</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Base. Throughout the Initial term of this Agreement and for any renewal term, for services rendered under this Agreement, Executive shall be paid annual base compensation of Two Hundred Thousand and 00/100 Dollars ($200,000.00)(the "Annual Base Compensation"), payable in accordance with Company' and Solar's current payroll policies which Company and Solar agree not to change without Executive's written consent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Automatic Increases. Annual Base Compensation shall be increased automatically upon the achievement of agreed upon economic milestones and business development achievement.s Company, Solar and Executive agree to negotiate in good faith to establish agreed upon milestones and business development achievements and the failure to do so shall be considered a breach of this Agreement by Company and Solar unless otherwise agreed by Executive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Discretionary Increases. Annual Base Compensation may be increased from time to time at the discretion of the Company or Solar's Board of Directors based on the performance of Executive, Company and Solar.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Bonus. Executive shall be eligible to receive an annual bonus or bonuses based on the performance of Executive and Company or Solar as Board of Directors of the Company or Solar, as the case determined by the may be.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Accrued Annual Base Compensation. In the event that Executive does not receive payment of any portion of the Annual Base Compensation due to Executive in the year in which it is earned ("Accrued Compensation") , Executive shall, at any time thereafter have the option, exercisable by delivery of written notice to Company or Solar, of converting all or any portion of such Accrued Compensation into a note or notes payable from Company or Solar. Any such notes payable shall have an effective date of January 1 of the year following the year in which the Accrued Compensation was earned and the note(s) shall otherwise be on the same terms and conditions as are provided for in the Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) New Warrants. Contemporaneous with the issuance of any note delivered to Executive in accordance with (3(e)) above, Solar shall issue Executive new Warrants granting Executive the right to purchase shares of Solar common stock for a purchase price per share equal to the market price as of the date of the warrant plus twenty percent (20%). The warrant(s) shall provide that Executive may exercise the warrants, in whole or in part, at any time that there is an outstanding balance due under any note payable by Solar to Executive and shall otherwise contain terms identical to those provided for in the Warrant.

4 . <u>BENEFIT</u><u>S</u>: (a) General. Executive shall be entitled to receive substantially similar fringe benefits as those provided to other executives of Company and Solar. Without limiting the benefits to which Executive is entitled under this Section 4, Executive shall participate in any incentive, insurance, pension, retirement or other benefit plan approved by Board of Directors and currently or subsequently maintained by Company or Solar for the benefit of its employees, executives or board members; (b) Paid Vacation. Throughout the term of this Agreement, Executive shall receive four (4) weeks paid vacation per calendar year. The full four (4) weeks of vacation shall be deemed earned as of the first day of the year. At Executive's option, unused vacation shall be paid to Executive in cash at the end of the year in which it was earned (with unpaid vacation being considered as Accrued Compensation if it is not paid). In the alternativ,e Executive shall be permitted to carry any unused vacation forward to the next succeeding year. Upon termination of Executive' s employment, regardless of the reason for such termination, Executive shall be paid for any unused vacation time; (c) Expense Reimbursement. The Company and Solar shall reimburse Executive for all expenses incurred by Executive in the performance of his duties on behalf of the Company. By way of example and not limitation, expenses for which Executive shall be entitled to reimbursement include, but are not limited to, travel and entertainment expenses, meals (including travel, entertainment and meals for Executive's spouse when she is traveling with Executive on Company matters), cell phones, computers and internet access; Auto. In recognition of the Company's requirement that Executive have access to an automobile as a condition of his employment, at Executive's option, Executive shall be provided with a leased or Company purchased automobile of Executives choice or payment of an auto allowance, such allowance to include payment by Company or Solar of all maintenanec, fuel and insurance expenses related to the automobile owned or used by Executive; Health Insurance. Company shall pay one hundred (100%) of the premiums of a medical health insurance plan covering Executive, his wife and any eligible dependent children (any such coverage may be supplemental to Medicare coverage available to Executive). Company shall also pay or reimburse Executive for any out of pocket health care related costs incurred by Executive; (f) Disability Insurance. At such time as the Company's board of directors determines that it is economically feasible, Company shall obtain and pay the premiums on a long-term disability policy insuring Executive against loss of income associated with a long term injury or disability; (g) Stock Option Plan. Prior to December 31, 2014, Solar agrees to adopt a stock option plan on terms and conditions satisfactory Executive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>T</u><u>ERMINATION</u>. Executive's employment under this Agreement may be terminated prior to expiration of the Initial Term of this Agreement only in accordance with the following paragraphs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Upo</u><u>n Death or Long-Term Disability</u>. Executive's employment under this Agreement shall be terminated upon the death of Executive. Executive's employment under this Agreement may be terminated upon thirty (30) days' written notice to Executive if Executive shall be unable to perform his duties substantially as required by this Agreement by reason of physical or mental disability or incapacity (from any cause or causes whatsoever) for a period of more than ninety (90) days, whether or not continuous, in any continuous sixty (120) day period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Fo</u><u>r Cause</u>. Executive's employment under this Agreement may be terminated immediately by the Company for "Cause". For purposes of this Agreement, the term "Cause" shall mean the existence or occurrence of one or more of the following conditions or events:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Executive' s commission of willful and intentional acts involving gross misconduct (including, without limitation, theft, fraud or embezzlement) ;

&nbsp;&nbsp;&nbsp;&nbsp;&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) Executive's conviction of, or plea of guilty or nolo contendere to, a felony or a crime involving moral turpitude; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) a material breach by Executive of any material provision of this Agreement or of any contractual or legal duty to the Company, including, but not limited to, the unauthorized disclosure of confidential information, that remains uncured after thirty (30) business days following a written notice from the Board of Directors of the Company to cure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Withou</u><u>t Cause</u>. Executive's employment under this Agreement may be termin ated by the Company at any time without Cause upon not less than (30) days' prior written notice. Any terminat ion of Executive' s employment other than as a result of Death, Long Term Disability or by the Company or Solar for Cause shall be considered for all purposes of this Agreement to be a termination without cause entitling Executive to severance as provided for in Section 7 below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Change</u> <u>in Control.</u> In the event of a Change in Control (as defined in Section 1 above), Executive may elect, at any time during the ninety (90) day period immediately following such Change in Control, to deliver thirty (30) days' written notice to the Company and Solar of his termination of employment under this Agreement. Such termination shall be deemed to be a termination without cause for all purposes of this Agreement entitling Executive to Severance as provided under Section 7.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>SEVERANCE. - TERMINATION RESULTING FROM DEATH, DISABILITY OR FOR CAUSE</u>. In the event Executive's employment under this Agreement is terminated in connection with Executive's death or long-term disability or by Company for Cause, Company shall pay Executive (or in the case of death, his heirs or personal representatives), within thirty (30) days after the effective date of termination, Executive's Annual Base Compensation and benefits and all expenses payable under Section 4 above through such date of death or termination, and Company shall have no further obligation to provide compensation or benefits to Executive under this Agreement; provided, however, that to the extent that any of Company's benefit plans provide rights or benefits after termination, Executive may continue to receive such rights or benefits in accordance with the terms of such plans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>SEVERANCE -TERMINATION WITHOUT CAUSE</u>. In the event Executive's employment under this Agreement is terminated for any reason other than as a result of death, long-term disability or for Cause by Company, such termination shall be a termination without cause for all purposes of this Agreement and the entire balance of the Executive's Annual Base Compensation due for the remainder of the Initial Term (or any subsequent annual terms if the termination occurs after the expiration of the Initial Term) shall become immediately due and payable to Executive. In addition, Company shall continue to pay one hundred percent (100%) of the premiums for health and other insurance coverage for the Executive as was in effect as of the effective date of termination such payments to continue for eighteen (18) months after the effective date of termination. Within thirty (30) days after the date of termination, the Company shall reimburse Executive for all expenses payable under Section 4(c) above through such date of termination. Furthermore, to the extent that any of Company's benefit plans provide rights or benefits after an employee's termination, Executive shall continue to receive such rights or benefits in accordance with the terms of such plans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>STOCK OPTIONS</u>. Upon (i) the dissolution or liquidation of Company or Solar; (ii) a termination of Executive's employment other than by the Company for Cause; (iii) any merger or consolidation in which the Company or Solar is not the surviving corporation; or (iv) a Change in Control, all stock options awarded to the Executive under any stock option plans shall immediately become one hundred percent (100%) vested and fully exercisable by Executive (or Executive's heirs, as the case may be) no later than the date immediately preceding the effective date of such dissolution, termination of employment, merger or consolidation, or Change of Control and the Executive shall have the right to exercise Executive' s stock options in whole or in part at any time within the next four (4) years.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>NOTES AND WARRANTS - TERMINATION WITHOUT CAUSE.</u> In the event Executive's employment is terminated for any reason other than a termination by Company or Solar for Cause, such termination shall have no effect on any Notes or other obligations of Company or Solar held by Executive including, without limitation, the Warrant or any warrants subsequently issued by Company or Solar to Executive individually or to Executive and his spouse. Any such notes or warrants shall continue in full force and effect, subject only to the express terms and conditions contained in any such notes or warrants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>CONFIDENTIALITY</u> . Executive recognizes and acknowledges that he will have access to certain confidential information of Company, Solar and of entities with whom Company and Solar do business, and that such information constitutes valuable, special and unique property of the Company and Solar and such other entities. During the Term of this Agreement and for a period of two (2) years immediately following the date of termination of this Agreement, Executive agrees not to disclose or use any confidential information, including without limitation, information concerning the Company or Solar's financial condition, research and development activities, technologies, product designs and/or specifications, "know-how;" prices, customers, prospects, methods of doing business, marketing and promotional activities , or any information or knowledge with respect to confidential information or trade secrets of the Company or Solar, it being understood that such confidential information does not include information that is publicly available unless such information became publicly available as a result of a breach of this Agreement. Executive acknowledges and agrees that all notes, records, reports, sketches, plans, unpublished memoranda or other documents belonging to the Company or Solar, but held by Executive, concerning any information relating to the Company or Solar's business, whether confidential or not, are the property of the Company and Solar and will be promptly delivered to it upon Executive's leaving the employ of the Company and Solar. Executive also agrees to execute such confidentiality agreements that the Board of Directors may adopt, and may modify from time to time, as a standard form to be executed by all executive employees of the Company or Solar, to the extent such standard forms are not more restrictive than the provisions of this Agreement.

The restrictions set forth in this Section are considered to be reasonable for the purposes of protecting the business of Company and Solar. Company, Solar and Executive acknowledge that Company and Solar would be irreparably harmed and that monetary damages would not provide an adequate remedy to the Company if the covenants contained in this Section were not complied with in accordance with its terms. Accordingly, Executive agrees that Company and Solar shall be entitled to injunctive and other equitable relief to secure the enforcement of these provisions, in addition to any other remedy which may be available to the Company. Any legal action commenced by the Company or Solar to secure the enforcement of this Section shall be commenced in Montgomery County, Maryland. The prevailing party in any such legal action shall be entitled to receive from the other party reimbursement for the reasonable attorneys' fees and expenses incurred by the prevailing party.

The provisions of Section shall survive the termination of this Agreement, regardless of the circumstances or reasons for such termination, and inure to the benefit of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>INTELLECTUAL PROPERTY</u>. Executive acknowledges and agrees that all discoveries, inventions, designs, improvements, formulas, formulations, ideas, devices, writings, publications, study protocols, study results, computer data or programs, or other intellectual property, whether or not subject to patent or copyright laws, which Executive shall conceive solely or jointly with others, in the course or scope of his employment with the Company and Solar (collectively referred to herein as <u>"Intellectual Property") ,</u> shall be the sole and exclusive property of Company and Solar without further compensation to the Executive. Inventions, if any, patented or unpatented, which Executive made prior to the commencement of his employment with Company and Solar are excluded from the scope of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u>DISPUTES</u>. Except as provided in the next paragraph, in the event that a dispute arises between Executive and Company or Solar concerning any matter under this Agreement, such dispute shall be resolved through binding arbitration which shall be conducted before three (3) impartial arbitrators. One arbitrator shall be selected by each party and the two arbitrators who are so selected shall select the third arbitrator. Any such arbitration shall be held in Montgomery County, Maryland. The arbitrators shall reach a decision in the arbitration based on the facts of the matter and applicable law. The Arbitrators decision shall be final and binding on the parties and enforceable in a court of law. Company and Solar shall pay all costs and fees in connection with the arbitration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. <u>NOTICES.</u> Any notice required or permitted to be given under this Agreement shall be sufficient if in writing and if sent by registered mail to the addresses below or to such other address as either party shall designate by written notice to the other:

If to Executive, to the address set forth below his signature on the signature page hereof

If to the Company to: <br>

Solar Wind Energy, Inc.

1997 Annapolis Exchange Parkway

Suite 300

Annapolis Maryland , 21401 <br>

If to Solar to:

Solar Wind Energy Tower Inc. <br> 1997 Annapolis Exchange Parkway <br> Suite 300

Annapolis, Maryland 21401

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. <u>GENERAL PROVISIONS</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Agreement contains the entire agreement of Company, Solar and Executive, and Company, Solar and Executive hereby acknowledge and agree that this Agreement supersedes any prior statements, writings, promises , understandings or commitments, including the Prior Agreement which is terminated and shall be of no further effect. No future oral statements, promises or commitments with respect to the subject matter hereof, or other purported modification hereof, shall be binding upon the parties hereto unless the same is reduced to writing and signed by each party hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The rights and obligations of Company under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of the Company. Executive may not assign his rights and obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) This Agreement shall be subject to and governed by the laws of the State of Maryland, without regard to the conflicts of laws principles thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The section headings contained herein are for reference purposes only and shall not in any way affect the meaning or the'interpretation of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The failure of any party to enforce any provision of this Agreement shall in no manner affect the right to enforce the same, and the waiver by any party of any breach of any provision of this Agreement shall not be construed to be a waiver by such party of any succeeding breach of such provision or a waiver by such party of any breach of any other provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) In the event any one or more of the provisions of this Agreement shall for any reason be held invalid, illegal or unenforceable, the remaining provisions of this Agreement shall be unimpaired, and the invalid, illegal or unenforceable provis ion shall be replaced by a mutually acceptable valid, and enforceable provision which comes closest to the intent of the parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) This Agreement may be executed in any number of counterparts, each of which shall constitute an original and all of which together shall constitute one and the same instrument.

The parties have executed this Employment Agreement as of the day and year first above written.

---

| |
|:---|
| Solar Wind Energy, Inc. |
| Stephen Sadle |
| By: Stephen Sadle |
| Its: Chief Operating Officer |
| Solar Wind Energy Tower, Inc. |
| Stephen Sadle |
| By: Stephen Sadle |
| Its: Chief Operating Officer |
| Ronald Pickett, individually |
| 322 Causeway Drive |
| Wrightsville beach, N.C. 28480 |

---

## Exhibit 10.2

**EXHIBIT 10.2**

<u>EXECUTIVE EMPLOYMENT AGREEMENT</u>

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement"), is made to be effective as of January 1, 2014 (the "Effective Date"), between Solar Wind Energy, Inc.(FKA Clean Wind Energy, Inc.), a Delaware Corporation (the "Company"), Solar Wind Energy Tower, Inc., a Nevada corporation ("Solar") and Stephen Sadle (the "Executive").

Recitals:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Executive has been employed by the Company and Solar since December 29, 2010 in the capacity of Chief Operating Officer for both companies and has also been a member of the Board of Directors of each company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Company is a wholly owned subsidiary of Solar.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Executive and Company are parties to an Executive Employment Agreement dated September 10, 2010 (the "Prior Agreement").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Executive is the holder of a note issued by Solar in the amount of One Hundred Fifty Thousand and 00/100 Dollars ($150,000.00) dated April 18, 2014 (the "Note") and a Convertible Debenture in the amount of One Hundred Thousand and 00/100 Dollars($100,000.00) dated December 31, 2012, also issued by Solar.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. Solar has issued Executive a Warrant To Purchase Twenty Three Million One Hundred Forty Eight Thousand One Hundred Forty Eight (23,148,148) fully paid and non-assessable shares of Solar common stock (the "Warrant").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. The parties have agreed to (i) extend the Executive's term of employment (ii) to provide for automatic salary increases in the event the Company achieves certain developmental milestones (iii) to confirm Executive's right to convert accrued but unpaid salary to promissory notes payable from Solar to Executive and (iv) to confirm Executiv'es right to receive warrants from Solar to purchase shares of Solar's common stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G. The parties desire to amend and restate the terms of their executive employment relationship and to terminate the Prior Agreement and replace it with this Agreement.

In consideration of the promises and covenants set forth in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree to the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>EMPLOYMENT AND DUTIES.</u> Company employs Executive as its Chief Operating Officer ("COO"). In his capacity as COO, Executive shall report only to the Chief Executive Officer and the Board of Directors of the Company and Solar and shall be responsible for each Company's day-to-day operating activities. The following conditions shall apply to Executive's employment under this Agreement: (i) Executive shall be permitted to work from home at his discretion; (ii) Executive shall be the Company and Solar's only COO and no other individual shall hold the position of COO or co-COO; (iii) other than the Chief Executive Officer, no individual or indivictua ls, whether acting as a committee or otherwise, shall have executive authority over or equal to that of the Executive and neither the Company nor Solar shall take any action which would or could have the effect of giving any individual(s) such authority or which appears to give any individual(s) such authority; (iv) Executive' s title may not be changed or modified in any way; (v) Executive' s duties shall not be changed in any way from those he has performed previously, nor shall Executive's duties or responsibilities be reduced in any way; (vi) Executive shall devote sufficient time to the performance of his duties as COO of both Company and Solar; (viii) Executive shall be entitled to the full protection of all applicable indemnification provisions of the Company and Solar's Articles of Incorporation and bylaws, for his service as a director, executive officer and employee of the Company and Solar.

If: (i) Company or Solar changes the Executive's duties and responsibilities as those duties are set forth in this Section 1 without Executive' s consent (including, without limitation, violation of any of the provisions of clauses (ii)-(v) above; (ii) there occurs a breach by Company or Solar of any of their obligations under this Agreement that has not been cured in all material respects within ten (10) days after the Executive gives notice thereof to the Company or Solar, as the case may be; (iii) there occurs a "change in control" (as that term is defined below) with respect to either Company or Solar or; (iv) the Executive has not been paid for a cumulative sixty (60) day period without Executive's consent in excess of the period of non-payment for similar Executives, then Executive shall have the right to terminate his employment with Company and Solar, but such termination shall not be considered a voluntary resignation or termination of such employment or of this Employment Agreement by the Executive but rather a discharge of the Executive by the Company and Solar "without cause" (as that term is defined below). For purposes of this Agreement, the term "change in control" means the first to occur of the following events:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any person or group of commonly controlled persons acquires, directly or indirectly, fifty percent (50%) or more of the voting control or value of the equity interests in the Company or Solar; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the shareholders of Company or Solar approving an agreement to merge or consolidate with another corporation or other entity resulting (whether separately or in connection with a series of transactions) in a change in ownership of fifty percent (50%) or more of the voting control or value of the equity interests in Company or Solar, or an agreement to sell or otherwise dispose of all or substantially all of Company or Solar's assets (including, without limitation, a plan of liquidation or dissolution), or otherwise approve of a fundamental alteration in the nature of the Company or Solar's business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. TERM. The term of this Agreement shall begin on the Effective Date and shall continue through December 31, 2018 (the "Initial Term"). Following the expiration of the Initial Term, this Agreement shall automatically renew for successive one (1) year terms, up to a maximum of ten (10) additional years, unless either party notifies the other in writing of his or its desire not to renew at least ninety (90) days prior to the expiration of the then current term.

3 . <u>COMPENSATION</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Base. Throughout the Initial term of this Agreement and for any renewal term, for services rendered under this Agreement, Executive shall be paid annual base compensation of One Hundred Seventy Five Thousand and 00/100 Dollars ($175,000.00)(the "Annual Base Compensation") , payable in accordance with Company' and Solar's current payroll policies which Company and Solar agree not to change without Executive's written consent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Automatic Increases. Annual Base Compensation shall be increased automatically upon the achievement of agreed upon economic milestones and business development achievements . Company, Solar and Executive agree to negotiate in good faith to establish agreed upon milestones and business development achievements and the failure to do so shall be considered a breach of this Agreement by Company and Solar unless otherwise agreed by Executive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Discretionary Increases. Annual Base Compensation may be increased from time to time at the discretion of the Company or Solar's Board of Directors based on the performance of Executive, Company and Solar.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Bonus. Executive shall be eligible to receive an annual bonus bonuses based or the performance of Executive and Company or Solar as on determined by the Board of Directors of the Company or Solar, as the case may be.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Accrued Annual Base Compensation. In the event that Executive does not receive payment of any portion of the Annual Base Compensation due to Executive in the year in which it is earned ("Accrued Compensation"), Executive shall, at any time thereafter have the option, exercisable by delivery of written notice to Company or Solar, of converting all or any portion of such Accrued Compensation into a note or notes payable from Company or Solar. Any such notes payable shall have an effective date of January 1 of the year following the year in which the Accrued Compensation was earned and the note(s) shall otherwise be on the same terms and conditions as are provided for in the Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) New Warrants. Contemporaneous with the issuance of any note delivered to Executive in accordance with (3(e)) above, Solar shall issue Executive new Warrants granting Executive the right to purchase shares of Solar common stock for a purchase price per share equal to the market price as of the date of the warrant plus twenty percent (20%). The warrant(s) shall provide that Executive may exercise the warrants, in whole or in part, at any time that there is an outstanding balance due under any note payable by Solar to Executive and shall otherwise contain terms identical to those provided for in the Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>BENEFIT</u><u>S</u>: (a) General. Executive shall be entitled to receive substantially similar fringe benefits as those provided to other executives of Company and Solar. Without limiting the benefits to which Executive is entitled under this Section 4, Executive shall participate in any incentive, insurance, pension, retirement or other benefit plan approved by Board of Directors and currently or subsequently maintained by Company or Solar for the benefit of its employees, executives or board members; (b) Paid Vacation. Throughout the term of this Agreement, Executive shall receive four (4) weeks paid vacation per calendar year. The full four (4) weeks of vacation shall be deemed earned as of the first day of the year. At Executive's option, unused vacation shall be paid to Executive in cash at the end of the year in which it was earned (withunpaid vacation being considered as Accrued Compensation if it is not paid). In the alternative, Executive shall be permitted to carry any unused vacation forward to the next succeeding year. Upon termination of Executive's employment, regardless of the reason for such termination, Executive shall be paid for any unused vacation time; (c) Expense Reimbursement. The Company and Solar shall reimburse Executive for all expenses incurred by Executive in the performance of his duties on behalf of the Company. By way of example and not limitation, expenses for which Executive shall be entitled to reimbursement include, but are not limited to, travel and entertainment expenses, meals (including travel, entertainment and meals for Executiv'es spouse when she is traveling with Executive on Company matters), cell phones, computers and internet access; (d) Auto. In recognition of the Company's requirement that Executive have access to an automobile as a condition of his employment, at Executiv'es option , Executive shall be provided with a leased or Company purchased automobile of Executives choice or payment of an auto allowance, such allowance to include payment by Company or Solar of all maintenance, fuel and insurance expenses related to the automobile owned or used by Executive; (e) Health Insurance. Company shall pay one hundred (100%) of the premiums of a medical health insurance plan covering Executive, his wife and any eligible dependent children (any such coverage may be supplemental to Medicare coverage available to Executive). Company shall also pay or reimburse Executive for any out of pocket health care related costs incurred by Executive; (f) Disability Insurance. At such time as the Company's board of directors determines that it is economically feasible, Company shall obtain and pay the premiums on a long-term disability policy insuring Executive against loss of income associated with a long term injury or disability; (g) Stock Option Plan. Prior to December 31, 2014, Solar agrees to adopt a stock option plan on terms and conditions satisfactory Executive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>TERMINATION</u>. Executive's employment under this Agreement may be terminated prior to expiration of the Initial Term of this Agreement only in accordance with the following paragraphs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Deat</u><u>h or Long-Term Disability</u>. Executive's employment under this Agreement shall be terminated upon the death of Executive. Executive's employment under this Agreement may be terminated upon thirty (30) days' written notice to Executive if Executive shall be unable to perform his duties substantially as required by this Agreement by reason of physical or mental disability or incapacity (from any cause or causes whatsoever) for a period of more than ninety (90) days, whether or not continuous, in any continuous sixty (120) day period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>For Cause.</u> Executive' s employment under this Agreement may be terminated immediately by the Company for "Cause". For purposes of this Agreement, the term "Cause" shall mean the existence or occurrence of one or more of the following conditions or events:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Executive' s commission of willful and intentional acts involving gross misconduct (including , without limitation, theft, fraud or embezzlement);

&nbsp;&nbsp;&nbsp;&nbsp;&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) Executive's conviction of, or plea of guilty or nolo contendere to, a felony or a crime involving moral turpitude; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) a material breach by Executive of any material provision of this Agreement or of any contractual or legal duty to the Company, including, but not limited to, the unauthorized disclosure of confidential information, that remains uncured after thirty (30) business days following a written notice from the Board of Directors of the Company to cure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Withou</u><u>t Cause</u>. Executive's employment under this Agreement may be terminated by the Company at any time without Cause upon not less than (30) days' prior written notice. Any termination of Executive's employment other than as a result of Death, Long Term Disability or by the Company or Solar for Cause shall be considered for all purposes of this Agreement to be a termination without cause entitling Executive to severance as provided for in Section 7 below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Change in Control</u>. In the event of a Change in Control (as defined in Section 1 above), Executive may elect, at any time during the ninety (90) day period immediately following such Change in Control, to deliver thirty (30) days' written notice to the Company and Solar of his termination of employment under this Agreement. Such termination shall be deemed to be a termination without cause for all purposes of this Agreement entitling Executive to Severance as provided under Section 7.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>SEVERANCE. - TERMINATION RESULTING FROM DEATH, DISABILITY OR FOR CAUSE</u> . In the event Executive's employment under this Agreement is terminated in connection with Executive' s death or long-term disability or by Company for Cause, Company shall pay Executive (or in the case of death, his heirs or personal representatives), within thirty (30) days after the effective date of termination, Executive's Annual Base Compensation and benefits and all expenses payable under Section 4 above through such date of death or termination, and Company shall have no further obligation to provide compensation or benefits to Executive under this Agreement; provided, however, that to the extent that any of Company's benefit plans provide rights or benefits after termination, Executive may continue to receive such rights or benefits in accordance with the terms of such plans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>SEVERANCE -TERMINATION WITHOUT CAUSE</u>. In the event Executive's employment under this Agreement is terminated for any reason other than as a result of death, long-term disability or for Cause by Company, such termination shall be a termination without cause for all purposes of this Agreement and the entire balance of the Executive's Annual Base Compensation due for the remainder of the Initial Term (or any subsequent annual terms if the termination occurs after the expiration of the Initial Term) shall become immediately due and payable to Executive. In addition, Company shall continue to pay one hundred percent (100%) of the premiums for health and other insurance coverage for the Executive as was in effect as of the effective date of termination such payments to continue for eighteen (18) months after the effective date of termination. Within thirty (30) days after the date of termination, the Company shall reimburse Executive for all expenses payable under Section 4(c) above through such date of termination. Furthermore, to the extent that any of Company's benefit plans provide rights or benefits after an employee's termination, Executive shall continue to receive such rights or benefits in accordance with the terms of such plans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>STOCK OPTIONS</u>. Upon (i) the dissolution or liquidation of Company or Solar; (ii) a termination of Executive' s employment other than by the Company for Cause; (iii) any merger or consolidation in which the Company or Solar is not the surviving corporation; or (iv) a Change in Control, all stock options awarded to the Executive under any stock option plans shall immediately become one hundred percent (100%) vested and fully exercisable by Executive (or Executive' s heirs, as the case may be) no later than the date immediately preceding the effective date of such dissolution, termination of employment, merger or consolidation, or Change of Control and the Executive shall have the right to exercise Executive's stock options in whole or in part at any time within the next four (4) years.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>NOTES AND WARRANTS - TERMINATION WITHOUT CAUSE.</u> In the event Executive's employment is terminated for any reason other than a termination by Company or Solar for Cause, such termination shall have no effect on any Notes or other obligations of Company or Solar held by Executive including, without limitation, the Warrant or any warrants subsequently issued by Company or Solar to Executive individually or to Executive and his spouse. Any such notes or warrants shall continue in full force and effect, subject only to the express terms and conditions contained in any such notes or warrants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>CONFIDENTIALITY.</u> Executive recognizes and acknowledges that he will have access to certain confidential information of Company, Solar and of entities with whom Company and Solar do business, and that such information constitutes valuable, special and unique property of the Company and Solar and such other entities. During the Term of this Agreement and for a period of two (2) years immediately following the date of termination of this Agreement, Executive agrees not to disclose or use any confidential information, including without limitation, information concerning the Company or Solar's financial condition , research and development activities, technologies, product designs and/or specifications, "know-how;" prices, customers, prospects, methods of doing business, marketing and promotional activities, or any information or knowledge with respect to confidential information or trade secrets of the company or Solar, it being understood that such confidential information does not include information that is publicly available unless such information became publicly available as a result of a breach of this Agreement. Executive acknowledges and agrees that all notes, records, reports, sketches, plans, unpublished memoranda or other documents belonging to the Company or Solar, but held by Executive, concerning any information relating to the Company or Solar's business, whether confidential or not, are the property of the Company and Solar and will be promptly delivered to it upon Executive's leaving the employ of the Company and Solar. Executive also agrees to execute such confidentiality agreements that the Board of Directors may adopt, and may modify from time to time, as a standard form to be executed by all executive employees of the Company or Solar, to the extent such standard forms are not more restrictive than the provisions of this Agreement.

The restrictions set forth in this Section are considered to be reasonable for the purposes of protecting the business of Company and Solar. Company, Solar and Executive acknowledge that Company and Solar would be irreparably harmed and that monetary damages would not provide an adequate remedy to the Company if the covenants contained in this Section were not complied with in accordance with its terms. Accordingly, Executive agrees that Company and Solar shall be entitled to injunctive and other equitable relief to secure the enforcement of these provisions, in addition to any other remedy which may be available to the Company. Any legal action commenced by the Company or Solar to secure the enforcement of this Section shall be commenced in Montgomery County , Maryland . The prevailing party in any such legal action shall be entitled to receive from the other party reimbursement for the reasonable attorneys' fees and expenses incurred by the prevailing party.

The provisions of Section shall survive the termination of this Agreement, regardless of the circumstances or reasons for such termination, and inure to the benefit of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>INTELLECTUAL PROPERTY</u>. Executive acknowledges and agrees that all discoveries, inventions, designs, improvements, formulas, formulations, ideas, devices, writings, publications, study protocols, study results, computer data or programs, or other intellectual property, whether or not subject to patent or copyright laws, which Executive shall conceive solely or jointly with others, in the course or scope of his employment with the Company and Solar (collectively referred to herein as "Intellectual Property"), shall be the sole and exclusive property of Company and Solar without further compensation to the Executive. Inventions, if any, patented or unpatented, which Executive made prior to the commencement of his employment with Company and Solar are excluded from the scope of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u>DISPUTES.</u> Except as provided in the next paragraph, in the event that a dispute arises between Executive and Company or Solar concerning any matter under this Agreement, such dispute shall be resolved through binding arbitration which shall be conducted before three (3) impartial arbitrators. One arbitrator shall be selected by each party and the two arbitrators who are so selected shall select the third arbitrator. Any such arbitration shall be held in Montgomery County, Maryland . The arbitrators shall reach a decision in the arbitration based on the facts of the matter and applicable law. The Arbitrators decision shall be final and binding on the parties and enforceable in a court of law. Company and Solar shall pay all costs and fees in connection with the arbitration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. <u>NOTICES.</u> Any notice required or permitted to be given under this Agreement shall be sufficient if in writing and if sent by registered mail to the addresses below or to such other address as either party shall designate by written notice to the other:

If to Executive, to the address set forth below his signature on the signature page hereof

If to the Company to: <br>

Solar Wind Energy, Inc.

1997 Annapolis Exchange Parkway

Suite 300

Annapolis Maryland, 21401<br>If to Solar to:

Solar Wind Energy Tower Inc. <br> 1997 Annapolis Exchange Parkway <br> Suite 300

Annapolis, Maryland 21401

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. <u>GENERAL PROVISIONS</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Agreement contains the entire agreement of Company, Solar and Executive, and Company, Solar and Executive hereby acknowledge and agree that this Agreement supersedes any prior statements, writings , promises, understandings or commitments, including the Prior Agreement which is terminated and shall be of no further effect. No future oral statements, promises or commitments with respect to the subject matter hereof, or other purported modification hereof, shall be binding upon the parties hereto unless the same is reduced to writing and signed by each party hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The rights and obligations of Company and Solar under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of the Company. Executive may not assign his rights and obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) This Agreement shall be subject to and governed by the laws of the State of Maryland, without regard to the conflicts of laws principles thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The section headings contained herein are for reference purposes only and shall not in any way affect the meaning or the'interpretation of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The failure of any party to enforce any provision of this Agreement shall in no manner affect the right to enforce the same, and the waiver by any party of any breach of any provision of this Agreement shall not be construed to be a waiver by such party of any succeeding breach of such provision or a waiver by such party of any breach of any other provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) In the event any one or more of the provisions of this Agreement shall for any reason be held invalid, illegal or unenforceable, the remaining provisions of this Agreement shall be unimpaired, and the invalid, illegal or unenforceable provision shall be replaced by a mutually acceptable valid, and enforceable provision which comes closest to the intent of the parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) This Agreement may be executed in any number of counterparts, each of which shall constitute an original and all of which together shall constitute one and the same instrument.

The parties have executed this Employment Agreement as of the day and year first above written.

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| |
|:---|
| Solar Wind Energy, Inc. |
| By: Ronald W. Pickett |
| Its: President |
| Solar Wind Energy Tower, Inc. |
| By: Ronald W. Pickett |
| Its: President |
| Stephen Sadle |
| Stephen Sadle |
| Address: 1200 John Ross Court Crownsville, Maryland 21032 |

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