# EDGAR Filing Document

**Accession Number:** 0001707734
**File Stem:** 0001670254-23-000250
**Filing Date:** 2023-3
**Character Count:** 329970
**Document Hash:** 0aadf28846ed604acc221ed5d2c26cf4
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001670254-23-000250.hdr.sgml**: 20230320

**ACCESSION NUMBER**: 0001670254-23-000250

**CONFORMED SUBMISSION TYPE**: C

**PUBLIC DOCUMENT COUNT**: 14

**FILED AS OF DATE**: 20230320

**DATE AS OF CHANGE**: 20230317

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Recompose, PBC
- **CENTRAL INDEX KEY:** 0001707734
- **IRS NUMBER:** 821564868
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** C
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 020-32011
- **FILM NUMBER:** 23744436

**BUSINESS ADDRESS:**
- **STREET 1:** 202 13TH AVENUE EAST
- **CITY:** SEATTLE
- **STATE:** WA
- **ZIP:** 98102
- **BUSINESS PHONE:** 206-551-4563

**MAIL ADDRESS:**
- **STREET 1:** 202 13TH AVENUE EAST
- **CITY:** SEATTLE
- **STATE:** WA
- **ZIP:** 98102

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** RecomposeMe PBC
- **DATE OF NAME CHANGE:** 20170526

## Ex-99

### Attached PDF Documents

**Attachment 1:** `document_1.pdf`

# Form C

## Cover Page

Name of issuer:

Recompose, PBC

Legal status of issuer:

Form: Other

Other (specify): Public Benefit Corporation

Jurisdiction of Incorporation/Organization: DE

Date of organization: 5/10/2017

Physical address of issuer:

4 South Idaho

Suite 101

Seattle WA 98134

Website of issuer:

http://www.recompose.life

Name of intermediary through which the offering will be conducted:

Wefunder Portal LLC

CRI number of intermediary:

0001670254

SEC file number of intermediary:

007-00033

CRD number, if applicable, of intermediary:

283503

Amount of compensation to be paid to the intermediary, whether as a dollar amount or a percentage of the offering amount, or a good faith estimate if the exact amount is not available at the time of the filing, for conducting the offering, including the amount of referral and any other fees associated with the offering:

6.5% of the offering amount upon a successful fundraise, and be entitled to reimbursement for out-of-pocket third party expenses it pays or incurs on behalf of the issuer in connection with the offering.

Any other direct or indirect interest in the issuer held by the intermediary, or any arrangement for the intermediary to acquire such an interest:

No

Type of security offered:

☐ Common Stock

☑ Preferred Stock

☐ Debt

☐ Other

If Other, describe the security offered:

Target number of securities to be offered:

10,824

Price:

$4.70660

Method for determining price:

Dividing pro-money valuation $76,074,578.43 by number of shares outstanding on fully diluted basis.

Target offering amount:

$50,002.92

Oversubscriptions accepted:

☑ Yes

☐ No

If yes, disclose how oversubscriptions will be allocated:

☐ Pro-rata basis

☐ First-come, first-served basis

☑ Other

If other, describe how oversubscriptions will be allocated:

As determined by the issuer

Maximum offering amount (if different from target offering amount):

$4,999,995.32

Deadline to reach the target offering amount:

4/30/2023

NOTE: If the sum of the investment commitments does not equal or exceed the target

offering amount at the offering deadline, no securities will be sold in the offering.

Investment commitments will be cancelled and continuing funds will be returned.

Current number of employees:

16

|  | Most recent fiscal year-end: | Prior fiscal year-end: |
| --- | --- | --- |
| Total Assets: | $16,234,910.00 | $7,596,083.00 |
| Cash & Cash Equivalents: | $7,482,622.00 | $4,054,791.00 |
| Accounts Receivable: | $560,088.00 | $324,621.00 |
| Short-term Debt: | $512,621.00 | $108,905.00 |
| Long-term Debt: | $5,478,210.00 | $2,059,104.00 |
| Revenues/Sales: | $699,470.00 | $107,643.00 |
| Cost of Goods Sold: | $236,604.00 | $4,774.00 |
| Taxes Paid: | $0.00 | $0.00 |
| Net Income: | ($1,468,252.00) | ($1,138,234.00) |

Select the jurisdictions in which the issuer intends to offer the securities:

AL, AK, AZ, AR, CA, CO, CT, DE, DC, FL, GA, HI, ID, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MN, MS, MO, MT, NE, NV, NH, NJ, NM, NY, NC, ND, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VT, VA, WA, WV, WI, WY, BS, GU, PR, VI, IV

## Offering Statement

Respond to each question in each paragraph of this part. Set forth each question and any notes, but not any instructions thereto, in their entirety. If disclosure in response to any question is responsive to one or more other questions, it is not necessary to report the disclosure. If a question or series of questions is inapplicable or the response is available elsewhere in the Form, either state that it is inapplicable, include a cross-reference to the responsive disclosure, or omit the question or series of questions.

Be very careful and precise in answering all questions. Give full and complete answers so that they are not misleading under the circumstances involved. Do not discuss any future performance or other anticipated event unless you have a reasonable basis to believe that it will actually occur within the foreseeable future. If any answer requiring significant information is materially inaccurate, incomplete or misleading, the Company, its management and principal shareholders may be liable to investors based on that information.

### THE COMPANY

1. Name of issuer

Recompose, PBC

### COMPANY ELIGIBILITY

2. ☑ Check this box to certify that all of the following statements are true for the issuer:

- Organized under, and subject to, the laws of a State or territory of the United States or the District of Columbia.
- Not subject to the requirement to file reports pursuant to Section 18 or Section 15(d) of the Securities Exchange Act of 1934.
- Not an investment company registered or required to be registered under the Investment Company Act of 1940.
- Not ineligible to rely on this exemption under Section 4(a)(6) of the Securities Act as a result of a disqualification specified in Rule 503(a) of Regulation Crowdfunding.
- Has filed with the Commission and provided to investors, to the extent required, the ongoing annual reports required by Regulation Crowdfunding during the two years immediately preceding the filing of this offering statement (or for such shorter period that the issuer was required to file such reports).
- Not a development stage company that (a) has no specific business plan or (b) has indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies.

INSTRUCTION TO QUESTION 2: If any of these statements are not true, then you are NOT eligible to rely on this exemption under Section 4(a)(6) of the Securities Act.

3. Has the issuer or any of its predecessors previously failed to comply with the ongoing reporting requirements of Rule 503 of Regulation Crowdfunding?

☐ Yes ☑ No

### DIRECTORS OF THE COMPANY

4. Provide the following information about each director (and any persons occupying a similar status or performing a similar function) of the issuer.

| Director | Principal Occupation | Main Employer | Year Joined as Director |
| --- | --- | --- | --- |
| Katrina Spade | CEO | Recompose, PBC | 2017 |
| Sara Moorehead | End of Life Doula | Self | 2019 |
| Leslie Christian | Investment management | NorthStar Asset Management Ring Family | 2019 |
| Peter Stroble | President | Investment Company | 2022 |

For three years of business experience, refer to Appendix D: Director & Officer Work History.

### OFFICERS OF THE COMPANY

5. Provide the following information about each officer (and any persons occupying a similar status or performing a similar function) of the issuer.

| Officer | Positions Held | Year Joined |
| --- | --- | --- |
| Katrina Spade | CFO | 2017 |
| Katrina Spade | CEO | 2017 |
| Katrina Spade | Secretary | 2017 |
| Katrina Spade | President | 2017 |

For three years of business experience, refer to Appendix D: Director & Officer Work History.

INSTRUCTION TO QUESTION 5: For purposes of this Question 2, the term officer means a president, vice president, secretary, business or principal financial officer, corporation or principal corporation, office and any person not employed.

performing similar functions.

## PRINCIPAL SECURITY HOLDERS

6. Provide the name and ownership level of each person, as of the most recent practicable date, who is the beneficial owner of 20 percent or more of the issuer's outstanding voting equity securities, calculated on the basis of voting power.

| Name of Holder | No. and Class of Securities Now Held | % of Voting Power Prior to Offering |
| --- | --- | --- |
| Katrina Spade | 7500000.0 Common Stock | 50.36 |

INSTRUCTION IN QUESTION 6. The above information must be provided as of a day that is no more than 120 days prior to the date of filing of this offering statement.

To calculate total voting power, include all securities for which the person directly or indirectly has or shares the voting power, which includes the power to now or in direct the voting of such securities. If the person has the right to acquire voting power of such securities within 90 days, including through the exercise of any option, warrants or right, the conversion of a security, or other arrangement, or if securities are held by a member of the family, through corporations or partnerships, or otherwise in a manner that would allow a person to direct or control the voting of the securities (or share in such direction or control) - as, for example, a connection they should be included as being 'beneficially owned.' You should include an explanation of these circumstances in a footnote to the 'Number of and Class of Securities Now Held.' To calculate outstanding voting equity securities, assume all outstanding options are exercised and all outstanding convertible securities converted.

## BUSINESS AND ANTICIPATED BUSINESS PLAN

7. Describe in detail the business of the issuer and the anticipated business plan of the issuer.

For a description of our business and our business plan, please refer to the attached Appendix A, Business Description & Plan

INSTRUCTION IN QUESTION 7. Wechsler will provide such company's Wechsler profile as an Appendix Appendix A1 to the Form C in PDF format. The submission will include all Q&A items and 'total items' items in an unassigned format. All values will be transmitted.

This means that any information provided to your Wechsler profile will be provided in the SEC in response to this question. As a result, your company will be potentially liable for misstatements and omissions in your profile under the Securities Act of 1933, which requires you to provide material information related to your business and anticipated business plans. Please review your Wechsler profile carefully to ensure it provides all material information, is not false or misleading, and does not omit any information that would cause the information included to be false or misleading.

## RISK FACTORS

A crowdfunding investment involves risk. You should not invest any funds in this offering unless you can afford to lose your entire investment.

In making an investment decision, investors must rely on their own examination of the issuer and the terms of the offering, including the merits and risks involved. These securities have not been recommended or approved by any federal or state securities commission or regulatory authority. Furthermore, these authorities have not passed upon the accuracy or adequacy of this document.

The U.S. Securities and Exchange Commission does not pass upon the merits of any securities offered or the terms of the offering, nor does it pass upon the accuracy or completeness of any offering document or literature.

These securities are offered under an exemption from registration; however, the U.S. Securities and Exchange Commission has not made an independent determination that these securities are exempt from registration.

8. Discuss the material factors that make an investment in the issuer speculative or risky.

Any continued future success that Recompose might enjoy will depend upon many factors, including factors beyond the control of Recompose and/or which cannot be predicted at this time. These factors may include but are not limited to the pace of changes in the legal and regulatory environment necessary for our business to operate: cost overruns in construction; Recompose's ability to secure leases; changes in or increased levels of competition, including the entry of additional competitors and increased success by existing competitors; changes in general economic conditions; increases in labor and/or operating costs; Recompose's ability to expand its customer base; and reduced margins caused by increases in costs of goods and/or competitive pressures. These conditions may have a material adverse effect upon Recompose's business, operating results, and financial condition.

EACH INVESTOR IS AWARE THAT AN INVESTMENT IN THE COMPANY IS SPECULATIVE AND INVOLVES A HIGH DEGREE OF RISK, INCLUDING THE POSSIBLE LOSS OF THE ENTIRE INVESTMENT, AND SUCH INVESTOR HAS CAREFULLY READ AND CONSIDERED THE FOLLOWING RISK FACTORS AND ALL MATTERS SPECIFIED IN THESE SUBSCRIPTION DOCUMENTS IN DETERMINING WHETHER OR NOT TO INVEST IN THE COMPANY AS SPECIFIED HEREIN. EACH INVESTOR UNDERSTANDS THAT THE FOLLOWING FACTORS ARE NOT AN ALL-INCLUSIVE LIST OF POSSIBLE RISKS INHERENT IN THE OFFERING.

While the Washington, Colorado, Oregon, Vermont and California state legislatures have passed bills legalizing natural organic reduction into law, the process is legal only in these five states. The majority of funeral laws - including the allowable methods of disposition - are regulated on a state-by-state basis, and it is unlikely that a federal law would overrule this. Our growth and expansion strategy requires that we become legal in every state in which we operate. However, partnering with like-minded funeral homes in cities across the United States to transport the deceased to Seattle for natural organic reduction and ship the resulting soil back to the deceased's family will allow us to offer our services beyond Washington state, to generate national excitement and buzz, and to share marketing costs.

Legal and regulatory changes after legalization of natural organic reduction also pose a risk to Recompose. While Recompose is not aware of any such efforts, it is possible that future regulatory restrictions on natural organic reduction will limit Recompose's ability to operate as anticipated in Washington and Colorado and elsewhere.

In addition to the legal status of natural organic reduction, Recompose will be subject to various federal, state, and local environmental and health laws and regulations that will govern its operations, including the handling and disposal of waste (including biomedical waste) and any potential discharges into the environment. Recompose's activities involve the controlled use of biological materials and may generate biological waste, and Recompose will be subject to laws and regulations governing the use, manufacture, storage, handling, and disposal of those materials as well as laws and regulations imposing liability and clean-up responsibility for improper disposal of these substances. In the event of an accident or if Recompose otherwise fails to comply with applicable regulations, Recompose could have the specific requirements to be held.

regulations, Recompose could lose its permits or approvals to operate or be held financially liable for such failures. Although Recompose will maintain insurance to cover claims related to hazardous materials or environmental liabilities, any claims in excess of this insurance coverage would be paid from Recompose's cash reserves, posing the risk of a material adverse financial impact.

Recompose may not generate significant revenue or achieve and sustain profitability if natural organic reduction as a funeral method does not become widely accepted in the marketplace. Although Recompose has seen significant interest in the natural organic reduction process to this date, it is possible that the market for natural organic reduction will not grow beyond this initial client base. Recompose has already begun the work to establish a market for natural organic reduction and build and grow that market through publicity, client education, and strategic partnerships with other businesses in the death care industry. And Recompose has already received significant earned media attention in and has launched a website to educate potential clients about natural organic reduction. Nonetheless, if obstacles to market acceptance arise, Recompose may need to devote substantial time and money to surmount these obstacles. Failing to achieve sufficient market acceptance of natural organic reduction would limit Recompose's ability to scale to the extent that we expect necessary to be profitable and would have a material adverse impact on Recompose's business and financial condition.

Death care is a multi-billion-dollar industry in the United States. Most of Recompose's competitors, including traditional funeral homes, cemeteries, and crematories, will have substantially greater financial, technological, managerial, and research and development resources and experience than Recompose. Natural organic reduction will compete with death care offerings from large and well-established companies with greater capital and marketing and sales experience and other capabilities. If Recompose is unable to compete in the death care industry successfully, it may be unable to grow and sustain adequate revenue to maintain operations and continue to compete for market share.

The transmission of COVID-19 and efforts to certain its spread have recently resulted in international, national and local border closings, travel restrictions, significant disruptions to business operations, supply chains and customer activity and demand, service cancellations, reductions and other changes, and quarantines, as well as considerable general concern and uncertainty.

The impacts of the COVID-19 crisis and other health crises, such as other pandemics or epidemics, may have effects on the Company. Such effects may include: a decrease in short-term and/or long-term demand and/or pricing for our products; increased costs resulting from our efforts to mitigate the impact of the health crisis; deterioration of worldwide credit and financial markets that could limit our ability to obtain external financing to fund our operations and capital expenditures; disruptions to our supply chain; impairments and/or write-downs of assets; and adverse impacts on our information technology systems and our internal control systems as a result of the need to increase remote work arrangements. Additionally, any material adverse effect of a health crisis on our employees, customers, suppliers and/or logistics providers could have a material adverse effect on us.

Depending on the duration and severity of the current COVID-19 pandemic or the start of another epidemic, pandemic or other health crisis, such matters may also have the effect of heightening many of the other risks described in our other disclosure documents, such as risks relating to the successful completion of our growth and expansion projects, including our ability to obtain regulatory approvals on the expected timelines or at all; our ability to maintain our credit ratings; our ability to maintain adequate internal controls in the event that our employees are restricted from accessing our regular offices for a significant period of time; restricted access to capital and increased borrowing costs; and our ability to pay dividends and service debt obligations.

No assurance can be given that an investor will realize a substantial return on investment, or any return at all, or that an investor will not lose a substantial portion or all of the investment. For this reason, each prospective investor should carefully read this memorandum and all exhibits attached hereto and should consult with an attorney, accountant, and/or business advisor prior to making any investment decision.

Recompose is a start-up with very little operating history and just over one year of earned revenue. No assurance can be given that an investor will realize a substantial return on their investment, or any return at all, or that an investor will not lose a substantial portion or all of their investment in the Shares.

As of the date of this offering, Recompose has had limited operations and has not yet generated significant revenue due to the legal status of natural organic reduction in most states. Our operations are subject to all of the risks inherent in a new business, and the likelihood of our success must be considered in light of the risks and problems any business encounters in connection with the development and commercialization of new technologies. Our lack of a lengthy operating history - particularly as a provider of an entirely new death care service - makes predicting the result of future operations extremely difficult.

We cannot be certain that we will be able to generate sufficient revenues to achieve profitability. We expect to generate operating losses and have negative cash flow for the foreseeable future due to costs and expenses related to:

- the development of our product and service offering;
- continuing research and development efforts;
- development of relationships with strategic business partners; and
- expansion of general and administrative functions to support anticipated growth in operations.

As we continue the development and commercialization of our Recompose Vessel System and related services, our expenses are expected to increase significantly. Our ability to become profitable depends on our ability to generate and sustain net revenues while keeping expenses at reasonable levels. Accordingly, we will need to generate significant revenue to achieve profitability. Because of the numerous risks and uncertainties associated with our product development and commercialization efforts, we are unable to predict when we will become profitable, and we may never become profitable. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. If we are unable to achieve and then maintain profitability, our business, financial condition and results of operations will be negatively affected, and the value and liquidity of the Shares will decline.

Recompose has developed a business plan and forecast based on certain targets and base assumptions about the operating margins and cash flow that Recompose must achieve in order to remain financially solvent and produce sufficient profits to make dividend payments as planned. There is a risk that one

or more of the base assumptions used to determine the target operating margins may be incorrect and/or may change in the future in a manner that Recompose cannot anticipate. Such changes may cause Recompose to not achieve its annual targets for operating margins, which may jeopardize Recompose's financial solvency, its ability to pay its employees, vendors, and/or other parties, its ability to meet its debt service obligations, and/or its planned capital expenditures.

The Shares to be sold in this Offering are not being registered under the Securities Act and may not be resold unless they are subsequently registered thereunder or an exemption from registration is available. Consequently, investors may never be able to liquidate their investment.

The offering price of the Shares has been determined by Recompose based on Recompose's business prospects, the size of our target addressable market within the death care industry, an assessment of our management team, our current and future capital needs, and the potential demand for our Recompose Vessel System. The price of the Shares does not necessarily bear any relationship to our current or future earnings, its net tangible assets, or other traditional indicators of value. If the Shares are priced in excess of their current or future value, investors may not be able to recoup their investment.

Recompose currently anticipates that the net proceeds of this Offering will be sufficient to meet its anticipated needs for working capital and other cash requirements for the foreseeable future. However, Recompose may need to raise additional funds in order to fund more rapid expansion, to respond to competitive pressures or to acquire complementary products or businesses, particularly if Recompose is unable to raise the entire amount of the Offering. Recompose's ability to become profitable will depend on its ability to generate and sustain net revenues; because of the numerous risks and uncertainties associated with Recompose's business, we are unable to predict whether or when Recompose will become profitable, and a lack of profitability may impact Recompose's ability to obtain financing in the future. There can be no assurance that additional financing will be available on terms favorable to Recompose, or at all. If adequate funds are not available or are not available on acceptable terms, Recompose's ability to fund its expansion, take advantage of potential acquisition opportunities, develop or enhance services or products or respond to competitive pressures would be significantly limited. Such limitations may have a material adverse effect on Recompose's business, operating results and financial condition.

Because natural organic reduction is a new process, Recompose's vendor base for products used in the natural organic reduction process may be limited. If Recompose is unable to find vendors which can produce the quality and quantity of products required for commercial-scale natural organic reduction, or if Recompose's vendors face any disruption or material business impacts of their own, Recompose would be forced to identify and qualify acceptable replacements from other sources. Delays or interruptions in Recompose's supply chain could limit or stop Recompose's ability to meet demand for its services, and any financial losses suffered as a result could exceed coverage under vendors' insurance policies. Each of these risks could have a material adverse effect on Recompose's business and financial condition.

If the patents, trade secrets, contractual provisions, and trademarks Recompose relies on to protect its intellectual property prove inadequate, Recompose's potential market advantage could be jeopardized. The patent for the Recompose Vessel System itself remains pending and Recompose cannot guarantee that it will be granted. Even if the patent is granted, Recompose's intellectual property protections may be challenged, invalidated, or circumvented at a later date, and any rights claimed under these protections may not provide the anticipated competitive advantages to Recompose.

Recompose, PBC owns two patents related to the process of natural organic reduction, both filed by international law firm Sleptoe and Johnson, LLC. The first, U.S. Patent No. 95/072,548, "System and Method for the Disposition of the Dead," was filed in March 2015 and is pending. It was originally owned by the Urban Death Project and was purchased by Recompose when the now-profit was dissolved. The second, U.S. Patent No. 82/133,984 "System and Method for Recomposition of the Dead," was filed as provisional in July 2017 and re-filed in July 2018. That patent was originally assigned to Katrina Spade, who assigned it to Recompose in August 2018. Both patents cover some aspects of the formula and method for recomposing a human body. The 2018 patent covers the vessel system and engineering details.

The issue of any patent, including the patents for which Recompose has applied, depends upon a detailed interpretation of the specific patent claims with respect to the technology at issue and is highly uncertain generally because of the complex legal and factual consideration involved in each patent. There may be other prior patents for similar technology that Recompose is not aware of, despite its diligent investigations. Because American patent applications are confidential within the U.S. patent system for at least eighteen months, Recompose cannot be certain that it holds the rights to the technology covered by the pending patent applications listed above, and there is a possibility that third parties may have filed patent applications for technology covered by Recompose's pending patent applications, and Recompose's pending patent applications may or may not have priority. Future changes in patent law, or changes in the interpretation of current patent law by the courts, could affect the strength and scope of patent protections afforded to Recompose even if its patents are granted. If Recompose is not able to protect its intellectual property rights to the fullest extent possible, it may find itself at a competitive disadvantage to others which need not incur the substantial time, effort, and costs needed to create and protect the innovative natural organic reduction process.

In addition, Recompose's ability to commercialize natural organic reduction depends on its ability to develop, market, and sell the natural organic reduction process without infringing on the intellectual property rights of third parties. Although Recompose has conducted a diligent search and to its knowledge is not currently infringing on any third-party intellectual property rights, it is possible that a third party may allege that the natural organic reduction process or Recompose's methods or materials violate its intellectual property rights. Recompose may be sued by a third party seeking to enforce such rights or may need to sue to protect its own intellectual property; in either event, the cost of litigation could be substantial even if Recompose prevails, and such a lawsuit would require substantial time and money which might otherwise be spent growing Recompose's business. If Recompose is found to infringe upon a third party's intellectual property rights, it may be forced to pay damages, purchase a license from the third party, and/or stop the infringing activity. If Recompose fails to obtain a license and cannot design around the invalidated patent, it may be unable to provide some or all of its proposed services, which could have a material adverse effect on its ability to generate revenue sufficient to sustain its operations.

Recompose's process is proprietary and innovative, the first of its kind to be offered to anyone in the United States. So much, Recompense will need to spend

trained anywhere in the United States. As such, Recompose will need to recruit, train, and retain an entirely new group of employees. If initial demand is sufficiently high, a shortage of qualified and trained workers may limit Recompose's early growth. There is no guarantee that Recompose will be successful in hiring or retaining qualified personnel, and the failure to do so may have a material adverse effect on Recompose's business, financial condition, and results of operations.

Recompose has developed a plan and forecast based on certain assumptions about the architectural and construction costs to design and develop a property. While cost estimates are based on known assumptions and factors affecting construction costs, such as the cost of materials and the timetable for construction, there is a risk that any one or more base assumptions affecting the cost estimates may be incorrect and/or may change in the future in a manner that Recompose cannot anticipate. Such changes may cause an increase to the costs of construction in excess of Recompose's finances, thus requiring additional capital or revision to the business plan.

Recompose has developed a business plan and forecast based on certain assumptions about the costs of manufacturing its vessel system. While cost estimates are based on known assumptions and factors affecting manufacturing costs, there is a risk that one or more of the base assumptions affecting the cost estimates may be incorrect and/or may change in the future in a manner that Recompose cannot anticipate.

Much of Recompose's success depends on the skills, experience, and performance of its key persons. Recompose currently does not have a firm plan fully detailing how to replace any of these persons in the case of death or disability. Despite consulting agreements and employment and noncompetition agreements, all of the arrangements with the principal members of Recompose's executive team may be terminated by Recompose or by the employee or team member. The loss of the services of any of the key members of senior management, other key personnel, or Recompose's inability to recruit, train, and retain senior management or key personnel may have a material adverse effect on Recompose's business, operating results, and financial condition; in addition, the loss of the services of any member of the senior management or scientific advisors may impede the achievement of Recompose's business goals by diverting management's attention to transition matters and identification of a suitable replacement, if any. Finally, Recompose's consultants and advisors may be employed by employers other than us or may have commitments under consulting or advisory contracts with other entities that may limit their availability to Recompose.

Control of Recompose and all its operations are solely with its board of directors and will remain with them as a Delaware public benefit corporation. Investors must rely upon the judgment and skills of the board and staff. In particular, this control could have the effect of delaying or preventing a change in control or otherwise discouraging or preventing a potential acquirer from attempting to obtain control of Recompose, causing a negative effect on the market price and liquidity of the Shares. Although the anticipated use of the proceeds of this Offering is outlined in the disclosures, our board of directors will have broad discretion over the use of the proceeds and need not apply them effectively or in a manner consistent with the uses described in this Memorandum.

Our founder and CEO owns approximately fifty-one percent (51%) of our outstanding voting capital stock and, following completion of the Offering, may own approximately 47% of our outstanding voting capital stock. As part of any purchase of Shares, investor will be required to execute the Stockholder Agreement which, among other restrictive provisions, requires that the holder of the Shares vote in such a manner as to elect persons designated by the founder for board membership. This concentration of voting shares and board membership designation could have the effect of delaying or preventing a change of control of the Company, or otherwise discouraging or preventing a potential acquirer from attempting to obtain control of us. This in turn could have a negative effect on the value or liquidity of the Shares. It could also prevent our stockholders from realizing a premium over the market prices for their Shares.

The purpose of the provision in the Shareholder Agreement that requires the holder of the Shares to vote to elect persons to the board designated by the founder is to preserve the values and mission of the Company.

Recompose is organized as a Delaware public benefit corporation and our business and operations are intended to produce a public benefit and to operate in a sustainable and responsible manner. We are managed in a way that balances the financial interests of our shareholders with environmental, cultural, and financial benefits to the public. As a result of our status as a public benefit corporation, we may choose not to maximize our financial gains if doing so would conflict with our mission and provision of public benefits, which business practice may adversely impact the value of the Shares.

Recompose has developed a business plan and forecast based on certain assumptions about the costs of goods, labor, and operations such as materials costs, wages, benefits, utilities, taxes, and other overhead costs. While cost estimates are based on known assumptions and factors affecting labor and operating costs, there is a risk that one or more of the base assumptions affecting the cost estimates may be incorrect and/or may change in the future in a manner that Recompose cannot anticipate.

Our ability to execute our business plan depends, in part, on the continued and uninterrupted performance of our information technology systems ("IT systems"), which support our Recompose Vessel Systems. Our IT systems are vulnerable to damage from a variety of sources, including telecommunications or network failures, malicious human acts and natural disasters. Moreover, despite network security and back-up measures, some of our servers are potentially vulnerable to physical or electronic break-ins, computer viruses and similar disruptive problems. Despite the precautionary measures we have taken to prevent unanticipated problems that could affect our IT systems, sustained or repeated system failures that interrupt our ability to generate and maintain data, and in particular to operate our proprietary technology platform, could adversely affect our ability to operate our business.

The Company has engaged Cutting Edge Counsel, Inc. ("CEC") to assist the Company in determining legal requirements related to this offering, preparing these offering materials and obtaining required approvals under applicable securities laws. However, CEC has not conducted any independent due diligence on the Company or otherwise attempted to verify any representations or other statements made by the Company, herein or otherwise, with respect to its business, financial condition, prospects or plans. CEC does not represent investors with respect to this offering, and investors are hereby advised to consult their own legal and financial advisors in connection with their investment decisions.

Our future success depends on the efforts of a small management team. The loss of services of the members of the management team may have an adverse effect

on the company. There can be no assurance that we will be successful in attracting and retaining other personnel we require to successfully grow our business.

INTERACTION REQUESTED: A. Avoid generalized statements and include only those factors that are unique to the issuer. This answer should be tailored to the issuer's business and the offering and should not repeat the factors addressed in the issuer's set forth above. No specific number of risk factors as required to be identified.

## The Offering

### USE OF FUNDS

9. What is the purpose of this offering?

The Company intends to use the net proceeds of this offering for working capital and general corporate purposes, which includes the specific items listed in Item 10 below. While the Company expects to use the net proceeds from the Offering in the manner described above, it cannot specify with certainty the particular uses of the net proceeds that it will receive from this Offering. Accordingly, the Company will have broad discretion in using these proceeds.

10. How does the issuer intend to use the proceeds of this offering?

If not listed: $50,003
Use of Proceeds: 22% Marketing, 5% Expansion, 60% Human Composting Operations, 5% Equipment Improvements, 1.5% Public Policy, 6.5% Wefunder Fee.

If not listed: $2,500,000
Use of Proceeds: 25% Marketing, 55% Expansion, 7% Human Composting Operations, 5% Equipment Improvements, 1.5% Public Policy, 6.5% Wefunder Fee.

If not listed: $4,999,995
Use of Proceeds: 18% Marketing, 65% Expansion, 4% Human Composting Operations, 5% Equipment Improvements, 1.5% Public Policy, 6.5% Wefunder fee.

Raising our maximum allows Recompose the bandwidth to focus on expansion and thereby achieve profitability sooner.

INTERACTION REQUESTED: An issuer must provide a reasonable, detailed description of any intended use of proceeds, such that investors are provided with an adequate amount of information to understand how the offering proceeds will be used. If an issuer has identified a range of possible uses, the issuer should identify and describe such probable use and the factors the issuer may consider in allocating proceeds among the potential uses. If the issuer will accept proceeds in excess of the target offering amount, the issuer must describe the purpose, method for allocating proceeds/options, and intended use of the various proceeds with similar specificity. Please include all presented uses of the proceeds of the offering including any that may apply only in the case of successful options. If you do not do so, you may later be required to amend your Form C. Wefunder is not responsible for any failure by you to describe a potential use of offering proceeds.

### DELIVERY & CANCELLATIONS

11. How will the issuer complete the transaction and deliver securities to the investors?

Book Entry and Investment in the Co-Issuer. Investors will make their investments by investing in interests issued by one or more co-issuers, each of which is a special purpose vehicle ("SPV"). The SPV will invest all amounts it receives from investors in securities issued by the Company. Interests issued to investors by the SPV will be in book entry form. This means that the investor will not receive a certificate representing his or her investment. Each investment will be recorded in the books and records of the SPV. In addition, investors' interests in the investments will be recorded in each investor's "Portfolio" page on the Wefunder platform. All references in this Form C to an investor's investment in the Company (or similar phrases) should be interpreted to include investments in a SPV.

12. How can an investor cancel an investment commitment?

NOTE: Investors may cancel an investment commitment until 48 hours prior to the deadline identified in these offering materials.

The intermediary will notify investors when the target offering amount has been met. If the issuer reaches the target offering amount prior to the deadline identified in the offering materials, it may close the offering early if it provides notice about the new offering deadline at least five business days prior to such new offering deadline (absent a material change that would require an extension of the offering and reconfirmation of the investment commitment).

If an investor does not cancel an investment commitment before the 48-hour period prior to the offering deadline, the funds will be released to the issuer upon closing of the offering and the investor will receive securities in exchange for his or her investment.

If an investor does not reconfirm his or her investment commitment after a material change is made to the offering, the investor's investment commitment will be cancelled and the committed funds will be returned.

An investor's right to cancel. An investor may cancel his or her investment commitment at any time until 48 hours prior to the offering deadline.

If there is a material change to the terms of the offering or the information provided to the investor about the offering and/or the Company, the investor will be provided notice of the change and must reconfirm his or her investment commitment within five business days of receipt of the notice. If the investor does not reconfirm, he or she will receive notifications disclosing that the commitment was cancelled, the reason for the cancellation, and the refund amount that the investor is required to receive. If a material change occurs within five business days of the maximum number of days the offering is to remain open, the offering will be extended to allow for a period of five business days for the investor to reconfirm.

If the investor cancels his or her investment commitment during the period when cancellation is permissible, or does not reconfirm a commitment in the case of a material change to the investment, or the offering does not close, all of the investor's funds will be returned within five business days.

Within five business days of cancellation of an offering by the Company, the Company will give each investor notification of the cancellation, disclose the reason for the cancellation, identify the refund amount the investor will receive, and refund the investor's funds.

The Company's right to cancel. The Investment Agreement you will execute with us provides the Company the right to cancel for any reason before the offering deadline.

If the sum of the investment commitments from all investors does not equal or exceed the target offering amount at the time of the offering deadline, no securities will be sold in the offering, investment commitments will be cancelled and committed funds will be returned.

## Ownership and Capital Structure

### THE OFFERING

13. Describe the terms of the securities being offered

Priced Round: $76,074,578.43 pre-money valuation

See exact security attached as Appendix B, Investor Contracts

Recompose, PBC is offering up to 1,062,337 shares of Series CP-1 Preferred Stock, at a price per share of $4.7066.

The campaign maximum is $4,999,995.32 and the campaign minimum is $50,002.92.

### Securities Issued by the SPV

Instead of issuing its securities directly to investors, the Company has decided to issue its securities to the SPV, which will then issue interests in the SPV to investors. The SPV has been formed by Wefunder Admin, LLC and is a co-issuer with the Company of the securities being offered in this offering. The Company's use of the SPV is intended to allow investors in the SPV to achieve the same economic exposure, voting power, and ability to assert State and Federal law rights, and receive the same disclosures, as if they had invested directly in the Company. The Company's use of the SPV will not result in any additional fees being charged to investors.

The SPV has been organized and will be operated for the sole purpose of directly acquiring, holding and disposing of the Company's securities, will not borrow money and will use all of the proceeds from the sale of its securities solely to purchase a single class of securities of the Company. As a result, an investor investing in the Company through the SPV will have the same relationship to the Company's securities, in terms of number, denomination, type and rights, as if the investor invested directly in the Company.

### Voting Rights

If the securities offered by the Company and those offered by the SPV have voting rights, those voting rights may be exercised by the investor or his or her proxy. The applicable proxy is the Lead Investor, if the Proxy (described below) is in effect.

### Proxy to the Lead Investor

The SPV securities have voting rights. With respect to those voting rights, the investor and his, her, or its transferees or assignees (collectively, the "Investor"), through a power of attorney granted by Investor in the Investor Agreement, has appointed or will appoint the Lead Investor as the Investor's true and lawful proxy and attorney (the "Proxy") with the power to act alone and with full power of substitution, on behalf of the Investor to: (i) vote all securities related to the Company purchased in an offering hosted by Wefunder Portal, and (ii) execute, in connection with such voting power, any instrument or document that the Lead Investor determines is necessary and appropriate in the exercise of his or her authority. Such Proxy will be irrevocable by the Investor unless and until a successor lead Investor ("Replacement Lead Investor") takes the place of the Lead Investor. Upon notice that a Replacement Lead Investor has taken the place of the Lead Investor, the Investor will have five (5) calendar days to revoke the Proxy. If the Proxy is not revoked within the 5-day time period, it shall remain in effect.

### Restriction on Transferability

The SPV securities are subject to restrictions on transfer, as set forth in the Subscription Agreement and the Limited Liability Company Agreement of Wefunder SPV, LLC, and may not be transferred without the prior approval of the Company, on behalf of the SPV.

14. Do the securities offered have voting rights?

☑ Yes
☐ No

15. Are there any limitations on any voting or other rights identified above?

See the above description of the Proxy to the Lead Investor.

16. How may the terms of the securities being offered be modified?

This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and may be amended only by a writing executed by all parties.

Pursuant to authorization in the Investor Agreement between each Investor and Wefunder Portal, Wefunder Portal is authorized to take the following actions with respect to the investment contract between the Company and an investor:

A. Wefunder Portal may amend the terms of an investment contract, provided that the amended terms are more favorable to the investor than the original terms; and
B. Wefunder Portal may reduce the amount of an investor's investment if the reason for the reduction is that the Company's offering is oversubscribed.

### RESTRICTIONS ON TRANSFER OF THE SECURITIES BEING OFFERED:

The securities being offered may not be transferred by any purchaser of such securities during the one year period beginning when the securities were issued, unless such securities are transferred.

1. to the issuer;

2. to an accredited investor;

3. as part of an offering registered with the U.S. Securities and Exchange Commission; or

4. to a member of the family of the purchaser or the equivalent, to a trust controlled by the purchaser, to a trust created for the benefit of a member of the family of the purchaser or the equivalent, or in connection with the death or divorce of the purchaser or other similar circumstance.

NOTE: The term "accredited investor" means any person who comes within any of the categories set forth in Rule 501(a) of Regulation D, or who the seller reasonably believes comes within any of such categories, at the time of the sale of the securities to that person.

The term "member of the family of the purchaser or the equivalent" includes a child, stepchild, grandchild, parent, stepparent, grandparent, spouse or spousal equivalent, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of the purchaser, and includes adoptive relationships. The term "spousal equivalent" means a cohabitant occupying a relationship generally equivalent to that of a spouse.

## DESCRIPTION OF ISSUER'S SECURITIES

17. What other securities or classes of securities of the issuer are outstanding? Describe the material terms of any other outstanding securities or classes of securities of the issuer.

| Class of Security | Securities (or Amount) Authorized | Securities (or Amount) Outstanding | Voting Rights |
| --- | --- | --- | --- |
| Preferred Stock | 12500000 | 7,278,383 | Yes |
| Common Stock | 20000000 | 7,613,866 | Yes |

Securities Reserved for
Issuance upon Exercise or Conversion

Warrants:

Options:

1,271,134

Describe any other rights:

All series of Preferred Stock have liquidation and dividend preferences over Common Stock. Series A Preferred Stock has a dividend preference over Series CF Preferred Stock.

18. How may the rights of the securities being offered be materially limited, diluted or qualified by the rights of any other class of security identified above?

The holders of a majority-in-interest of voting rights in the Company could limit the Investor's rights in a material way. For example, those interest holders could vote to change the terms of the agreements governing the Company's operations or cause the Company to engage in additional offerings (including potentially a public offering).

These changes could result in further limitations on the voting rights the Investor will have as an owner of equity in the Company, for example by diluting those rights or limiting them to certain types of events or consents.

To the extent applicable, in cases where the rights of holders of convertible debt, SAFES, or other outstanding options or warrants are exercised, or if new awards are granted under our equity compensation plans, an Investor's interests in the Company may be diluted. This means that the pro-rata portion of the Company represented by the Investor's securities will decrease, which could also diminish the Investor's voting and/or economic rights. In addition, as discussed above, if a majority-in-interest of holders of securities with voting rights cause the Company to issue additional equity, an Investor's interest will typically also be diluted.

Based on the risk that an Investor's rights could be limited, diluted or otherwise qualified, the Investor could lose all or part of his or her investment in the securities in this offering, and may never see positive returns.

Additional risks related to the rights of other security holders are discussed below, in Question 20.

19. Are there any differences not reflected above between the securities being offered and each other class of security of the issuer?

No.

20. How could the exercise of rights held by the principal shareholders identified in Question 6 above affect the purchasers of the securities being offered?

As holders of a majority-in-interest of voting rights in the Company, the shareholders may make decisions with which the Investor disagrees, or that negatively affect the value of the Investor's securities in the Company, and the Investor will have no recourse to change these decisions. The Investor's interests may conflict with those of other investors, and there is no guarantee that the Company will develop in a way that is optimal for or advantageous to the Investor.

For example, the shareholders may change the terms of the Articles of Incorporation for the company, change the terms of securities issued by the Company, change the management of the Company, and even force out minority holders of securities. The shareholders may make changes that affect the tax treatment of the Company in ways that are unfavorable to you but favorable to them. They may also vote to engage in new offerings and/or to register certain of the Company's securities in a way that negatively affects the value of the securities the Investor owns. Other holders of securities of the Company may also have access to more information than the Investor, leaving the Investor at a disadvantage with respect to any decisions regarding the securities he or she owns. The shareholders have the right to redeem their securities at any time. Shareholders could decide to force the Company to redeem their securities at a time that is not favorable to the Investor and is damaging to the Company. Investors' exit may affect the value of the Company and/or its viability. In cases where the rights of holders of convertible debt, SAFES, or other outstanding options or warrants are exercised, or if new awards are granted under our equity compensation plans, an Investor's interests in the Company may be diluted. This means that the pro-rata portion of the Company represented by the Investor's securities will decrease, which could also diminish the Investor's voting and/or economic rights. In addition, as discussed above, if a majority-in-interest of

holders of securities with voting rights cause the Company to issue additional stock, an Investor's interest will typically also be diluted.

Based on the risks described above, the Investor could lose all or part of his or her investment in the securities in this offering, and may never see positive returns.

21. How are the securities being offered being valued? Include examples of methods for how such securities may be valued by the issuer in the future, including during subsequent corporate actions.

The offering price for the securities offered pursuant to this Form C has been determined arbitrarily by the Company, and does not necessarily bear any relationship to the Company's book value, assets, earnings or other generally accepted valuation criteria. In determining the offering price, the Company did not employ investment banking firms or other outside organizations to make an independent appraisal or evaluation. Accordingly, the offering price should not be considered to be indicative of the actual value of the securities offered hereby.

In the future, we will perform valuations of our common stock that take into account factors such as the following:

1. unrelated third party valuations of our common stock;
2. the price at which we sell other securities, such as convertible debt or preferred Stock, in light of the rights, preferences and privileges of our those securities relative to those of our common stock;
3. our results of operations, financial position and capital resources;
4. current business conditions and projections;
5. the lack of marketability of our common stock;
6. the hiring of key personnel and the experience of our management;
7. the introduction of new products;
8. the risk inherent in the development and expansion of our products;
9. our stage of development and material risks related to our business;
10. the likelihood of achieving a liquidity event, such as an initial public offering or a sale of our company given the prevailing market conditions and the nature and history of our business;
11. industry trends and competitive environment;
12. trends in consumer spending, including consumer confidence;
13. overall economic indicators, including gross domestic product, employment, inflation and interest rates; and
14. the general economic outlook.

We will analyze factors such as those described above using a combination of financial and market-based methodologies to determine our business enterprise value. For example, we may use methodologies that assume that businesses operating in the same industry will share similar characteristics and that the Company's value will correlate to those characteristics, and/or methodologies that compare transactions in similar securities issued by us that were conducted in the market.

22. What are the risks to purchasers of the securities relating to minority ownership in the issuer?

An Investor in the Company will likely hold a minority position in the Company, and thus be limited as to its ability to control or influence the governance and operations of the Company.

The marketability and value of the Investor's interest in the Company will depend upon many factors outside the control of the Investor. The Company will be managed by its officers and be governed in accordance with the strategic direction and decision-making of its Board Of Directors, and the Investor will have no independent right to name or remove an officer or member of the Board Of Directors of the Company.

Following the Investor's investment in the Company, the Company may sell interests to additional investors, which will dilute the percentage interest of the Investor in the Company. The Investor may have the opportunity to increase its investment in the Company in such a transaction, but such opportunity cannot be assured.

The amount of additional financing needed by the Company, if any, will depend upon the maturity and objectives of the Company. The declining of an opportunity or the inability of the Investor to make a follow-on investment, or the lack of an opportunity to make such a follow-on investment, may result in substantial dilution of the Investor's interest in the Company.

23. What are the risks to purchasers associated with corporate actions, including additional issuances of securities, issuer repurchases of securities, a sale of the issuer or of assets of the issuer or transactions with related parties?

Additional issuances of securities. Following the Investor's investment in the Company, the Company may sell interests to additional investors, which will dilute the percentage interest of the Investor in the Company. The Investor may have the opportunity to increase its investment in the Company in such a transaction, but such opportunity cannot be assured. The amount of additional financing needed by the Company, if any, will depend upon the maturity and objectives of the Company. The declining of an opportunity or the inability of the Investor to make a follow-on investment, or the lack of an opportunity to make such a follow-on investment, may result in substantial dilution of the Investor's interest in the Company.

Issuer repurchases of securities. The Company may have authority to repurchase its securities from shareholders, which may serve to decrease any liquidity in the market for such securities, decrease the percentage interests held by other similarly situated investors to the Investor, and create pressure on the Investor to sell its securities to the Company concurrently.

A sale of the issuer or of assets of the issuer. As a minority owner of the Company, the Investor will have limited or no ability to influence a potential sale of the Company or a substantial portion of its assets. Thus, the Investor will rely upon the executive management of the Company and the Board of Directors of the Company to manage the Company so as to maximize value for shareholders. Accordingly, the success of the Investor's investment in the Company will depend in large part upon the skill and expertise of the executive management of the Company and the Board of Directors of the Company. If the Board Of Directors of the Company authorizes a sale of all or a part of the Company, or a disposition of a substantial portion of the Company's assets, there can be no guarantee that the value received by the Investor, together with the fair market estimate of the value remaining in the Company, will be equal to or exceed the value of the Investor's initial investment in the Company.

Transactions with related parties. The Investor should be aware that there will be occasions when the Company may encounter potential conflicts of interest in its operations. On any issue involving conflicts of interest, the executive management and Board of Directors of the Company will be guided by their good faith

judgement as to the Company's best interests. The Company may engage in transactions with affiliates, subsidiaries or other related parties, which may be on terms which are not arm's-length, but will be in all cases consistent with the duties of the management of the Company to its shareholders. By acquiring an interest in the Company, the investor will be deemed to have acknowledged the existence of any such actual or potential conflicts of interest and to have waived any claim with respect to any liability arising from the existence of any such conflict of interest.

24. Describe the material terms of any indebtedness of the issuer:

Loan

| Gender | Individual Investors (4) |
| --- | --- |
| Issue date | 12/21/22 |
| Amount | $2,000,000.00 |
| Outstanding principal plus interest | $2,000,000.00 as of 03/15/23 |
| Interest rate | 3.0% per annum |
| Maturity date | 09/30/27 |
| Current with payments | Yes |

Note offering with interest between 2 and 4 percent; issues vary from 1 to 10 years. Payment intended to begin in September 2021.

INSTRUCTION REQUESTED: 24 items are evidence, amount owed, interest rate, maturity date, and any other material terms.

25. What other exempt offerings has the issuer conducted within the past three years?

| Offering Date | Exemption | Security Type | Amount Sold | Use of Proceeds |
| --- | --- | --- | --- | --- |
| 11/2020 | Regulation D, Rule 506(c) | Preferred stock | $100,000 | General operations |
| 11/2020 | Regulation D, Rule 506(c) | Preferred stock | $100,000 | General operations |
| 11/2020 | Regulation D, Rule 506(c) | Preferred stock | $50,000 | General operations |
| 11/2020 | Regulation D, Rule 506(c) | Preferred stock | $6,500,000 | General operations |
| 12/2022 | Regulation D, Rule 506(c) | Preferred stock | $125,000 | General operations |
| 12/2022 | Regulation D, Rule 506(c) | Preferred stock | $68,603 | General operations |
| 12/2022 | Regulation D, Rule 506(c) | Preferred stock | $9,709,230 | General operations |

26. Was or is the issuer or any entities controlled by or under common control with the issuer a party to any transaction since the beginning of the issuer's last fiscal year, or any currently proposed transaction, where the amount involved exceeds five percent of the aggregate amount of capital raised by the issuer in reliance on Section 41(c)(6) of the Securities Act during the preceding 12-month period, including the amount the issuer seeks to ease in the current offering, in which any of the following persons had or is to have a direct or indirect material interest:

1. any director or officer of the issuer;
2. any person who is, as of the most recent practicable date, the beneficial owner of 20 percent or more of the issuer's outstanding voting equity securities, calculated on the basis of voting power;
3. if the issuer was incorporated or organized within the past three years, any promoter of the issuer;
4. or any immediate family member of any of the foregoing persons.

☑ Yes

☐ No

For each transaction specify the person, relationship to issuer, nature of interest in transaction, and amount of interest.

Name Leslie Christian

Amount invested $25,000.00

Transaction type Priced round

Issue date 07/01/18

Relationship Board of Directors

Name Nancy and Peter Mogielnicki

Amount invested $25,000.00

Transaction type Priced round

Issue date 07/01/18

Relationship parent

Name Sara Moorehead

Amount invested $25,000.00

Transaction type Priced round

Issue date 07/01/18

Relationship Board of Directors

Name Nancy and Peter Mogielnicki

Amount invested $50,000.00

Transaction type Priced round

Issue date 11/01/20

Relationship Parents

Name Leslie Christian

Amount invested $100,000.00

Transaction type Priced round

Issue date 11/01/20

Relationship Board of Directors

**Name** Vicki Christophersen
**Amount Invested** $100,000.00
**Transaction type** Priced round
**Issue date** 11/01/20
**Relationship** Lobbyist

**Name** Nancy and Peter Mogielnicki
**Amount Invested** $68,603.00
**Transaction type** Priced round
**Issue date** 12/01/22
**Relationship** Parents

**Name** Leslie Christian
**Amount Invested** $125,000.00
**Transaction type** Priced round
**Issue date** 12/01/22
**Relationship** Board of Directors

INSTRUCTIONS TO QUESTION 26. The term transaction includes, but is not limited to, any financial transaction arrangement or relationship (including any indebtedness or guarantee of indebtedness) or any series of similar transactions, arrangements or relationships.

Beneficial ownership for purposes of paragraph (1) shall be determined as of a date that is no more than 150 days prior to the date of filing of this offering statement and using the same calculation described in Question 6 of the Question and Answer format.

The term "number of the funds" includes any child, any child, grandchild, parent, acquaintance, grandparent, spouse or spousal equivalent, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of the person, and includes adequate relationships. The term "spread equivalent" means a calculated accepting a relationship generally equivalent to that of a spouse.

Compare the amount of a related party's interest in any transaction without regard to the amount of the profit or loss involved in the transaction. Where it is not practicable to meet the approximate amount of the interest, disclose the approximate amount involved in the transaction.

## FINANCIAL CONDITION OF THE ISSUER

27. Does the issuer have an operating history?

☑ Yes
☐ No

28. Describe the financial condition of the issuer, including, to the extent material, liquidity, capital resources and historical results of operations.

### Management's Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this offering. Some of the information contained in this discussion and analysis, including information regarding the strategy and plans for our business, includes forward-looking statements that involve risks and uncertainties. You should review the "Risk Factors" section for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

#### Overview

Carbon-sequestering green funeral solution that returns us to the earth.

#### Milestones

Recompose, PBC was incorporated in the State of Delaware in May 2017.

Since the date of our financials, we have:

- $1.6M revenue in first two years of operations, projecting $1.48M this year. (not guaranteed)
- Composted over 200 people representing over 200 metric tons carbon saved.
- 1200 members of prepaid death care plan representing $6.9M future revenue. (not guaranteed)
- $21.7B non-cyclical, recession-proof market. If people who die is growing (will not peak until 2055).
- Queer female CEO developed and legalized human composting; Echoing Green and Ashoka fellow.
- Successfully raised $17M in series A1, A2, and A3.
- Leadership team with 40 years combined experience in the field.

#### Historical Results of Operations

- **Revenues & Gross Margin.** For the period ended December 31, 2021, the Company had revenues of $699,470 compared to the year ended December 31, 2020, when the Company had revenues of $107,645. Our gross margin was 66.17% in fiscal year 2021, compared to 95.57% in 2020.
- **Assets.** As of December 31, 2021, the Company had total assets of $16,234,910, including $7,482,622 in cash. As of December 31, 2020, the Company had $7,596,083 in total assets, including $4,054,791 in cash.
- **Net Loss.** The Company has had net losses of $1,468,252 and net losses of $1,138,234 for the fiscal years ended December 31, 2021 and December 31, 2020, respectively.
- **Liabilities.** The Company's liabilities totaled $5,990,831 for the fiscal year ended December 31, 2021 and $2,168,013 for the fiscal year ended December 31, 2020.

#### Related Party Transaction

Refer to Question 26 of this Form C for disclosure of all related party transactions.

# Liquidity & Capital Resources

To-date, the company has been financed with $2,000,000 in debt and $17,343,833 in equity.

After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 6 months before we need to raise further capital.

We plan to use the proceeds as set forth in this Form C under "Use of Funds". We don't have any other sources of capital in the immediate future.

We will likely require additional financing in excess of the proceeds from the Offering in order to perform operations over the lifetime of the Company. We plan to raise capital in 12 months. Except as otherwise described in this Form C, we do not have additional sources of capital other than the proceeds from the offering. Because of the complexities and uncertainties in establishing a new business strategy, it is not possible to adequately project whether the proceeds of this offering will be sufficient to enable us to implement our strategy. This complexity and uncertainty will be increased if less than the maximum amount of securities offered in this offering is sold. The Company intends to raise additional capital in the future from investors. Although capital may be available for early-stage companies, there is no guarantee that the Company will receive any investments from investors.

# Runway & Short/Mid Term Expenses

Recompose, PBC cash in hand is $1,176,170, as of March 2023. Over the last three months, revenues have averaged $66,108/month, cost of goods sold has averaged $42,040/month, and operational expenses have averaged $297,387/month, for an average burn rate of $273,319 per month. Our intent is to be profitable in 24 months.

Recompose's revenue is increasing moderately month over month. Otherwise, there are no material changes or trends since the date our financials cover.

Recompose's expected revenue over the next 6 months is approximately $600,000. Our expected expenses over the next 6 months are approximately $2,000,000.

Recompose is not yet profitable. While we cannot make any guarantees, we hope to be profitable in the next 24-36 months.

Recompose has a low-interest debt option and is concurrently raising funds via that option. We have timed the campaign to take short-term burn into consideration.

Recompose will need to add an additional 35 vessels for capacity. This will most likely be in a new location, which we estimate the total build-out cost to be approximately $15M. In the interim, recompose will require approximately $1.5M / year in operating expenses during the build-out and ramping up phases. We estimate in total we require $15M to be profitable

All projections in the above narrative are forward-looking and not guaranteed.

INSTRUCTIONS TO QUESTION 26: The discussion must cover each year for which financial statements are provided. For issuers with no prior operating history, the discussion should focus on financial statements and operational, liquidity and other challenges. For issuers with an operating history, the discussion should focus on whether financial results and cash flows are representative of what investors should expect in the future. This into account the proceeds of the offering and any other known or pending sources of capital. Discuss how the proceeds from the offering will affect liquidity, whether receiving these funds and any other additional funds is necessary to the inability of the business, and how quickly the issuer anticipates using its available cash. Describe the other available sources of capital in the business, such as lines of credit or required contributions by shareholders. References to the issuer in this Question 26 and these transactions refer to the issuer and its predecessors, if any.

# FINANCIAL INFORMATION

26. Include financial statements covering the two most recently completed fiscal years or the period(s) since inception, if shorter.

Refer to Appendix C, Financial Statements

I, Katrina Spade, certify that:

(1) the financial statements of Recompose, PBC included in this Form are true and complete in all material respects; and

(2) the financial information of Recompose, PBC included in this Form reflects accurately the information reported on the tax return for Recompose, PBC filed for the most recently completed fiscal year.

Katrina Spade
CEO

# STAKEHOLDER ELIGIBILITY

30. With respect to the issuer, any predecessor of the issuer, any affiliated issuer, any director, officer, general partner or managing member of the issuer, any beneficial owner of 20 percent or more of the issuer's outstanding voting equity securities, any promoter connected with the issuer in any capacity at the time of such sale, any person that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with such sale of securities, or any general partner, director, officer or managing member of any such solicitor, prior to May 16, 2018.

(1) Has any such person been convicted, within 10 years (or five years, in the case of issuers, their predecessors and affiliated issuers) before the filing of this offering statement, of any felony or misdemeanor:

i. In connection with the purchase or sale of any security? ☐ Yes ☑ No
ii. Involving the making of any false filing with the Commission? ☐ Yes ☑ No
iii. arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser, funding portal or paid solicitor of purchasers of securities? ☐ Yes ☑ No

(2) is any such person subject to any order, judgment or decree of any court or competent jurisdiction, entered within five years before the filing of this information required by Section 4A(b) of the Securities Act that, at the time of filing of this offering statement, restrains or enjoys such person from engaging or continuing to engage in any conduct or practice.

i. In connection with the purchase or sale of any security? ☐ Yes ☑ No
ii. Involving the making of any false filing with the Commission? ☐ Yes ☑ No
iii. arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment advisor, funding portal or paid solicitor of purchasers of securities? ☐ Yes ☑ No

(3) is any such person subject to a final order of a state securities commission (or an agency or officer of a state performing like functions), a state authority that supervises or examines banks, savings associations or credit unions; a state insurance commission (or an agency or officer of a state performing like functions); an appropriate federal banking agency; the U.S. Commodity Futures Trading Commission; or the National Credit Union Administration that:

i. at the time of the filing of this offering statement bars the person from:
A. association with an entity regulated by such commission, authority, agency or officer? ☐ Yes ☑ No
B. engaging in the business of securities, insurance or banking? ☐ Yes ☑ No
C. engaging in savings association or credit union activities? ☐ Yes ☑ No
ii. constitutes a final order based on a violation of any law or regulation that prohibits fraudulent, manipulative or deceptive conduct and for which the order was entered within the 10-year period ending on the date of the filing of this offering statement? ☐ Yes ☑ No

(4) is any such person subject to an order of the Commission entered pursuant to Section 10(b) or 10(c) of the Exchange Act or Section 203(a) or (f) of the Investment Advisers Act of 1940 that, at the time of the filing of this offering statement:

i. suspends or revokes such person's registration as a broker, dealer, municipal securities dealer, investment advisor or funding portal? ☐ Yes ☑ No
ii. places limitations on the activities, functions or operations of such person? ☐ Yes ☑ No
iii. bars such person from being associated with any entity or from participating in the offering of any penny stock? ☐ Yes ☑ No

(5) is any such person subject to any order of the Commission entered within five years before the filing of this offering statement that, at the time of the filing of this offering statement, orders the person to cease and desist from committing or causing a violation or future violation of:

i. any scienter-based anti-fraud provision of the federal securities laws, including without limitation Section 17(a)(1) of the Securities Act, Section 10(b) of the Exchange Act, Section 501(c)(1) of the Exchange Act and Section 206(1) of the Investment Advisers Act of 1940 or any other rule or regulation thereunder? ☐ Yes ☑ No
ii. Section 5 of the Securities Act? ☐ Yes ☑ No

(6) is any such person suspended or expelled from membership in, or suspended or barred from association with a member of, a registered national securities exchange or a registered national or affiliated securities association for any act or omission to act constituting conduct inconsistent with just and equitable principles of trade?

☐ Yes ☑ No

(7) Has any such person filed (as a registrant or issuer), or was any such person or was any such person named as an underwriter in, any registration statement or Regulation A offering statement filed with the Commission that, within five years before the filing of this offering statement, was the subject of a refusal order, stop order, or order suspending the Regulation A exemption, or is any such person, at the time of such filing, the subject of an investigation or proceeding to determine whether a stop order or suspension order should be issued?

☐ Yes ☑ No

(8) is any such person subject to a United States Postal Service false representation order entered within five years before the filing of the information required by Section 4A(b) of the Securities Act, or is any such person, at the time of filing of this offering statement, subject to a temporary restraining order or preliminary injunction with respect to conduct alleged by the United States Postal Service to constitute a scheme or device for obtaining money or property through the mail by means of false representations?

☐ Yes ☑ No

If you would have answered "Yes" to any of these questions had the conviction, order, judgment, decree, suspension, expulsion or bar occurred or been issued after May 16, 2016, then you are NOT eligible to rely on this exemption under Section 4(a)(6) of the Securities Act.

PAYMENT FROM THE DEVIATION: (1) If your order makes a written directive or declaratory statement issued by a federal or state agency, described in Rule 7(b)(a)(1) of Regulation C on a pending, under applicable statutory authority that provides for notice and an opportunity for hearing, which constitutes a final disposition or action by that federal or state agency.

No matters are required to be disclosed with respect to events relating to any affiliated issuer that occurred before the affiliation given if the affiliated entity is not (1) in control of the issuer or (2) under common control with the issuer by a third party that was in control of the affiliated entity at the time of such events.

## OTHER MATERIAL INFORMATION

D. In addition to the information expressly required to be included in this Form, include:

- (1) any other material information presented to investors; and

- (2) such further material information, if any, as may be necessary to make the required statements, in the light of the circumstances under which they are made, not misleading.

The Lead Investor. As described above, each investor that has entered into the Investor Agreement will grant a power of attorney to make voting decisions on behalf of that investor to the Lead Investor (the "Proxy"). The Proxy is irrevocable unless and until a Successor Lead Investor takes the place of the Lead Investor, in which case, the investor has a five (5) calendar day period to revoke the Proxy. Pursuant to the Proxy, the Lead Investor or his or her successor will make voting decisions and take any other actions in connection with the voting on Investors' behalf.

The Lead Investor is an experienced investor that is chosen to act in the role of Lead Investor on behalf of Investors that have a Proxy in effect. The Lead Investor will be chosen by the Company and approved by Wefunder Inc. and the identity of the initial Lead Investor will be disclosed to Investors before Investors make a final investment decision to purchase the securities related to the Company.

The Lead Investor can quit at any time or can be removed by Wefunder Inc. for cause or pursuant to a vote of Investors as detailed in the Lead Investor Agreement. In the event the Lead Investor quits or is removed, the Company will choose a Successor Lead Investor who must be approved by Wefunder Inc. The identity of the Successor Lead Investor will be disclosed to Investors, and those that have a Proxy in effect can choose to either leave such Proxy in place or

revised each Proxy during a 5-day period beginning with notice of the replacement of the Lead Investor.

The Lead Investor will not receive any compensation for his or her services to the SPV. The Lead Investor may receive compensation if, in the future, Wefunder Advisors LLC forms a fund ("Fund") for accredited investors for the purpose of investing in a non-Regulation Crowdfunding offering of the Company. In such as circumstance, the Lead Investor may act as a portfolio manager for that Fund (and as a supervised person of Wefunder Advisors) and may be compensated through that role.

Although the Lead Investor may act in multiple roles with respect to the Company's offerings and may potentially be compensated for some of its services, the Lead Investor's goal is to maximize the value of the Company and therefore maximize the value of securities issued by or related to the Company. As a result, the Lead Investor's interests should always be aligned with those of investors. It is, however, possible that in some limited circumstances the Lead Investor's interests could diverge from the interests of investors, as discussed in section 8 above.

Investors that wish to purchase securities related to the Company through Wefunder Portal must agree to give the Proxy described above to the Lead Investor, provided that if the Lead Investor is replaced, the Investor will have a 5-day period during which he or she may revoke the Proxy. If the Proxy is not revoked during this 5-day period, it will remain in effect.

Tax Filings. In order to complete necessary tax filings, the SPV is required to include information about each investor who holds an interest in the SPV, including each investor's taxpayer identification number ("TIN") (e.g., social security number or employer identification number). To the extent they have not already done so, each investor will be required to provide their TIN within the earlier of (1) two (2) years of making their investment or (1) twenty (20) days prior to the date of any distribution from the SPV. If an investor does not provide their TIN within this time, the SPV reserves the right to withhold from any proceeds otherwise payable to the investor an amount necessary for the SPV to satisfy its tax withholding obligations as well as the SPV's reasonable estimation of any penalties that may be charged by the IRS or other relevant authority as a result of the investor's failure to provide their TIN. Investors should carefully review the terms of the SPV Subscription Agreement for additional information about tax filings.

INSTRUCTIONS IN QUOTATION 30. If information is presented to investors in a format, media or other means not able to be reflected in text or possible document format, the issuer should include:
(a) a description of the material content of each information;
(b) a description of the format in which each disclosure is presented; and
(c) in the case of disclosure in token, order or other dynamic media or format, a transcript or description of each disclosure.

## ONGOING REPORTING

32. The issuer will file a report electronically with the Securities & Exchange Commission annually and post the report on its website, no later than

120 days after the end of each fiscal year covered by the report.

33. Once posted, the annual report may be found on the issuer's website at:
https://recompose.ifef/invest

The issuer must continue to comply with the ongoing reporting requirements until:

1. the issuer is required to file reports under Exchange Act Sections 13(a) or 15(d);
2. the issuer has filed at least one annual report and has fewer than 300 holders of record;
3. the issuer has filed at least three annual reports and has total assets that do not exceed $10 million;
4. the issuer or another party purchases or repurchases all of the securities issued pursuant to Section 4(c)(6), including any payment in full of debt securities or any complete redemption of redeemable securities; or the issuer liquidates or dissolves in accordance with state law.

## APPENDICES

Appendix A: Business Description & Plan

Appendix B: Investor Contracts

SPV Subscription Agreement
Recompose Subscription Agreement

Appendix C: Financial Statements

Financials 1

Appendix D: Director & Officer Work History

Katrina Spade
Leslie Christian
Peter Stroble
Sara Moorehead

Appendix E: Supporting Documents

## Signatures

Intentional misstatements or omissions of facts constitute federal criminal violations. See 18 U.S.C. 1001.

The following documents will be filed with the SEC.

Cover Page XML

Offering Statement (this page)

Appendix A: Business Description & Plan

Appendix B: Investor Contracts

SPV Subscription Agreement

Recompose Subscription Agreement

Appendix C: Financial Statements

Financials 1

Appendix D: Director & Officer Work History

Katrina Spade

Leslie Christian

Peter Stroble

Sara Moorehead

Appendix E: Supporting Documents

Pursuant to the requirements of Sections 4(a)(6) and 4A of the Securities Act of 1933 and Regulation Crowdfunding (§ 227.100 et seq.), the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form C and has duly caused this Form to be signed on its behalf by the duly authorized undersigned.

Recompose, PBC

By

Katrina Spade

Founder and CEO

Pursuant to the requirements of Sections 4(a)(6) and 4A of the Securities Act of 1933 and Regulation Crowdfunding (§ 227.100 et seq.), this Form C and Transfer Agent Agreement has been signed by the following persons in the capacities and on the dates indicated.

Katrina Spade

CEO

3/17/2023

Leslie Christian

Board Member

3/17/2023

Sara Hobart Moorehead

Director

3/16/2023

Katrina Spade

Founder and CEO

3/16/2023

The Form C must be signed by the issuer, its principal executive officer or officers, its principal financial officer, its controller or principal accounting officer and at least a majority of the board of directors or persons performing similar functions.

I authorize Wefunder Portal to submit a Form C to the SEC based on the information I provided through this online form and my company's Wefunder profile.

As an authorized representative of the company, I appoint Wefunder Portal as the company's true and lawful representative and attorney-in-fact, in the company's name, place and stead to make, execute, sign, acknowledge, swear to and file a Form C on the company's behalf. This power of attorney is coupled with an interest and is irrevocable. The company hereby waives any and all defenses that may be available to contest, negate or disaffirm the actions of Wefunder Portal taken in good faith under or in reliance upon this power of attorney.

**Attachment 2:** `document_2.pdf`

![img-0.jpeg](img-0.jpeg)

# INVEST IN RECOMPOSE

# Carbon-sequestering green funeral solution that returns us to the earth

# LEAD INVESTOR

Jill Kaminsky

Thirty years ago, I worked at a cemetery. I experienced first-hand its antiquated business model, and witnessed the negative impacts that burial practices have on the environment. Nothing has changed since then - until now. In my current role as a startup investor, Recompose meets all of my investment criteria - it's a disruptor in a growth industry with a socially responsible focus. Recompose's mission is to eliminate the funeral industry's heavy reliance on natural resources and its use of environmentally harmful burial methods. It's the first company in the world to develop proprietary human composting technology, offering an environmentally sound funeral option. The population is aging and the demand for funeral services is increasing. Recompose is capitalizing on this growing market while reducing the industry's toll on the environment.

I'm investing in Recompose because I believe Katrina and her team have the combined skills in business, technology, death practices, and conservation that are necessary to upend the funeral industry and capture a profitable market share.

I am honored to serve as lead investor on the Recompose Wefunder raise.

Invested $25,000 this round

recompose.life

Seattle Washington

Female Founder

B2C

Service

Health & Fitness

Sustainability

# Highlights

1 $1.6M revenue in first two years of operations, projecting $1.48M this year. (not guaranteed)
2 Composted over 200 people representing over 200 metric tons carbon saved.
3 1200 members of prepaid death care plan representing $6.9M future revenue. (not guaranteed)
4 $21.7B non-cyclical, recession-proof market. # people who die is growing (will not peak until 2055).
5 Queer female CEO developed and legalized human composting; Echoing Green and Ashoka fellow.
6 Successfully raised $17M in series A1, A2, and A3.
7 Leadership team with 40 years combined experience in the field.
8 Featured in Forbes, CNN, People Magazine, NY Times, and Reuters.

# Our Team

Katrina Spade Founder and CEO

Driven entrepreneur and creator of human composting, the green funeral option poised to

take over the industry.

![img-1.jpeg](img-1.jpeg)

**Micah Hartowski** Finance Director

Systems thinker with background in events, operations, and business growth.

![img-2.jpeg](img-2.jpeg)

**Jacki Myers** Director of Natural Organic Reduction (NOR)

Mechanical engineer and human composting systems expert; quality assurance and controls background.

![img-3.jpeg](img-3.jpeg)

**Chawn Howard** HR and Talent Director

Culture-builder and establisher of innovative and equitable work places.

![img-4.jpeg](img-4.jpeg)

**Marlene Bailey** Capital Projects Director

Developer of large-scale human composting facilities from design through construction and start-up of operations.

![img-5.jpeg](img-5.jpeg)

**Alissa Atkins** Director of Client Experience

Creative producer and team-builder with deep music industry background.

## Pitch

RECOMPOSE

![img-6.jpeg](img-6.jpeg)

The concept of turning our dead into soil is both completely practical and deeply moving. It asks us to consider our relationship with death. It recognizes the inherent need all humans share to connect with nature, especially as we die or witness the death of others.

#### ABOUT RECOMPOSE

Founded in 2017  
A Public Benefit Corporation  
First in the world to offer human composting

#### VISION

When we remind ourselves that death is a natural part of life, we can embrace our mortality and more fully connect to the earth.

#### MISSION

To shift the world's perspective on human mortality by creating a regenerative death care option for all.

![img-7.jpeg](img-7.jpeg)

Recompose has created a funeral offering that is connected to the earth's natural cycles. It addresses the carbon impact of death care and provides comfort and inspiration to people who are facing the end of life. Our goal is to expand Recompose to bring this offering to people all over the world.

![img-8.jpeg](img-8.jpeg)

With every death, we must consider what to do with the person's physical remains and how to mark the life of the person who has died. Recompose provides a solution for this.

![img-9.jpeg](img-9.jpeg)

![img-10.jpeg](img-10.jpeg)

all over the world.

Annual Waste, U.S. Cemeteries:

- 30 million board-feet hardwood (caskets use 4,000,000 acres of forest)
- 90,000 tons of steel
- 1.6 million tons of concrete
- 7 million gallons of embalming fluid

![img-11.jpeg](img-11.jpeg)

Cremation rates are rising fast, and so is the environmental toll.

Annual Pollution, U.S. Crematories:

- Use of fossil fuels (e.g. natural gas)
- Particulate, mercury, and carbon emissions
- 600 million lbs CO2 emissions

There is a massive amount of embodied energy created by the manufacture and transport of caskets, headstones, and grave liners as well as the maintenance of acres of lawn. In addition, burial requires land, a finite resource. Urban cemeteries are reaching capacity all over the world. Seattle and San Francisco have introduced moratoriums on constructing new cemeteries because urban land is considered too precious to house the dead. In New York City, most cemeteries have run out of plots to sell. It is becoming clear that the concept of owning an individual piece of land for eternity is deeply flawed.

In part of these reasons, burial is becoming less popular in the United States, and cremation has become the default choice. U.S. cremation rates rose from 3% in 1960 to over 55% in 2021. Unfortunately, however, cremation is an energy-intensive process that releases carbon dioxide, mercury, and particulates into the atmosphere.

The energy required to cremate a body is roughly equal to the amount of fuel it takes to drive 4,800 miles. Annually, cremation emits a staggering 700 million pounds of CO2 in the U.S. alone. Adding in China, the UK, Canada, and the Netherlands increases that figure to nearly 4 billion pounds of carbon dioxide annually.

## A NATURE-BASED SOLUTION

Recompose developed human composting and brought it to market. Our system mimics the process on the forest floor, where organic material biodegrades and transforms into soil.

![img-12.jpeg](img-12.jpeg)

At the heart of the Recompose model is a system that converts bodies into soil. By creating the right environment for naturally-occurring microbes to thrive, we accelerate natural decomposition. Recompose is a way for our bodies to return to the earth after we die.

![img-13.jpeg](img-13.jpeg)

![img-14.jpeg](img-14.jpeg)

Americans Age 65+

Americans (all ages) with Interest in Green Funerals

Source for data: National Funeral Directors Association (NDFA), U.S. Census

![img-15.jpeg](img-15.jpeg)

In the next few decades, more people will die than ever before. Worldwide, the number of people aged 65 and over is projected to reach 1.6 billion by 2050.

An August 2021 poll by the National Funeral Directors Association found that 4.1% of Americans would choose “human composting” upon their death. This was before Recompose had opened its doors to offer the service.

## LONG-TERM GOAL

Surpass cremation as the leading death care choice

Converting just 10% of the US cremation market to human composting is the equivalent of taking 48,726 cars off the road for a year.

![img-16.jpeg](img-16.jpeg)

U.S. Cremation Rate

Source for data: National Funeral Directors Association (NDFA)

![img-17.jpeg](img-17.jpeg)

Recompose’s long-term goal is to replace cremation - currently the choice for over half of Americans - as the default funeral choice. This goal has vast

implications both for Recompose's bottom line and for the planet.

## A REPLICABLE MODEL

![img-18.jpeg](img-18.jpeg)

Recompose is a licensed green funeral home specializing in human composting. We provide client support throughout the entire death care journey and strive to create a death care experience that is authentic and meaningful. Facility design elements emphasize nature, reminding clients and their families of loved ones' return to the earth.

![img-19.jpeg](img-19.jpeg)

Recompose's first business arm is to open and operate facilities where bodies are transformed into soil via human composting. We charge fees for our services at these locations. Recompose is a full-service funeral home. We handle legal and logistical needs, provide opportunities for ritual, and support people throughout the death care process.

## SOPHISTICATED GREEN FUNERAL TECHNOLOGY

![img-20.jpeg](img-20.jpeg)

![img-21.jpeg](img-21.jpeg)

![img-22.jpeg](img-22.jpeg)

The transformation from human to soil takes place inside of Recompose vessels, shown here in our Seattle facility. The Recompose vessel system is proprietary and scalable. It is a new model for ecological death care in urban centers.

![img-23.jpeg](img-23.jpeg)

Recompose's second business arm is to license our proprietary technology and technical know-how to carefully-chosen partners. Our patent-pending Recompose Vessel System has been designed to be replicated. Vessels can be stacked vertically, scaling up as demand grows. Our process control system "talks" to each vessel, measuring temperatures and ensuring that proper records are kept. Recompose has devoted time, energy, and money to designing, engineering, piloting, and legalizing a process that will be applicable throughout the world. While other may choose to engage in a similar but independent research and design process, the more attractive alternative for many will be to enter a collaborative arrangement with Recompose.

Recompose partners will provide financial capital and local expertise. We will work closely with partners to help them overcome regulatory burdens in their jurisdictions. Recompose will provide equipment, technical know-how, and ongoing support to our licenses.

![img-24.jpeg](img-24.jpeg)

![img-0.jpeg](img-0.jpeg)

Recomposes's process happens inside our proprietary vessels, one body per vessel. Each vessel is filled with a mixture of natural materials - wood chips, alfalfa, and straw - and aerated. The process inside the vessel takes between four to seven weeks, after which time the vessels are cleaned and used again. The soil is cured for an additional two to six weeks and is then returned to the family or donated to conservation efforts.

The soil created by the Recompose Vessel System is nutrient-rich and it's appearance and feel are much more like the topsoil on would buy at a nursery. Each body creates approximately one cubic yard.

# REVENUE MODEL

# Green Funeral Services (B2C)

Recompose builds and operates facilities where bodies are transformed into soil. As a full-service funeral home, we handle legal and logistical needs and support people throughout the death care journey.

# Precompose Prepayment Plan (B2C)

People can prearrange for their future human composting with Recompose by becoming Precompose members. Prepayments go into trust, and we are able to recognize 10% as revenue now.

# Green Funeral Technology Licensing (B2B)

![img-1.jpeg](img-1.jpeg)

![img-2.jpeg](img-2.jpeg)

Recompose licenses its proprietary system and human composting expertise to partners who want to offer the service to consumers.

Impact

Rare

## GREEN FUNERAL SERVICES

We work closely with our clients to ensure respectful, empathetic service from the time of death through the body's transformation into soil. Our $7,000 service* includes:

![img-3.jpeg](img-3.jpeg)

- Transformation of the body into soil
- Hands-on, personalized support from our licensed team
- Local transport of the body to our location**
- The option to keep or donate the soil to conservation efforts
- The filing of the death certificate
- An obituary posted on our website

* Ceremony not included in this price.

**Clients who come to us from out-of-state are picked up at SeaTac airport. As we expand to new locations, we will direct out-of-state clients to the nearest Recompose facility.

"Thank you for creating such a beautiful ceremony to send off my mom yesterday. It was moving, quiet and meaningful. Members of the family called me after to say that the experience was healing for them in ways they had not expected."

- Daughter of client

Intro

Problem

Opportunity

Solution

Business Model

Team

Traction

Impact

Rare

Recompose provides simplicity. Compared to the extensive, a la carte offerings of other funeral homes, we give families a short, tailored list of choices with clear, transparent pricing. Our grounded approach creates an authentic relationship with customers, with clear communication and hands-on involvement from our staff. We want to make death care accessible, empathetic, and unique; the opposite of the stereotypical experience. From the experience of families to the deep personal meaning found by returning to the earth after death, we have seen the Recompose service vastly exceed our customers' expectations.

# PRECOMPOSE PREPAYMENT PLAN

Members prearrange for their future death care with us. We offer payment plans of $100, $250, or $500/month through an online enrollment process.

![img-4.jpeg](img-4.jpeg)

Precompose members represent future customers and revenue. Prepayments go into trust; Recompose recognizes 10% as revenue now.

Recompose's 1200+ Precompose members represent over $6.9M in future revenue in today's dollars.

"Precompose has given me what I can only describe as a quiet sense of joy. A sense that in these senseless and helpless times, at least I could do something to ensure that my death not cause more harm to the environment."

- Precompose member

![img-5.jpeg](img-5.jpeg)

Forward looking projections cannot be guaranteed.

In 2020, the Recompose team built a prearrangement program, called Precompose, entirely from scratch. The team also built a comprehensive online sign-up system that allows prospective customers to sign up for one-time or monthly payments and complete the legal documents related to their death care.

# COST AND CONTEXT

![img-6.jpeg](img-6.jpeg)

Conventional burial: $8,000 - $25,000+
Factors include casket choice, cemetery plot & fees, location, funeral home services & fees.

Cremation: $750 - $9000+

![img-7.jpeg](img-7.jpeg)

![img-8.jpeg](img-8.jpeg)

Factors include casket choice, location, and funeral home services & fees.

Natural Burial: $2,000 - $8,000+

Factors include location, cemetery plot & fees, funeral home services & fees.

Recompose Service: $7,000+

The National Funeral Directors Association states that the median cost for a U.S. funeral with viewing and burial is $8,755. This does not include a headstone and plot, which can range from $3,000 to $25,000. The median cost for a cremation with a funeral and viewing is $6,260. A direct cremation - without viewing, casket, or time in the funeral home - costs between $750 and $4,200. The same services and goods can vary widely in price, even in the same city. A natural burial at Joshua Tree Memorial Park in California costs approximately $7,000, including a plot.

Two cemeteries in Los Angeles offer green burials; their prices are $16,000 and higher. A natural burial at White Eagle Cemetery, 3.5 hours from Seattle, costs $5,660.

## LEADERSHIP

![img-9.jpeg](img-9.jpeg)

Katrina Spade | CEO

Designer entrepreneur; inventor of human composting. Echoing Green + Ashoka Fellow.

![img-10.jpeg](img-10.jpeg)

Marlene Bailey | Capital Projects

Developer of large-scale human composting facilities through operational start-up.

![img-11.jpeg](img-11.jpeg)

Jacki Myers | NOR Director

Mechanical engineer and human composting systems expert; QA & controls background.

![img-12.jpeg](img-12.jpeg)

Chawn Howard | HR & Talent

Culture-builder and establisher of innovative and equitable work places.

## ADVISORY

![img-13.jpeg](img-13.jpeg)

Alan Maskin

Architecture & design

![img-14.jpeg](img-14.jpeg)

Alua Arthur

End-of-life planning

![img-15.jpeg](img-15.jpeg)

Leslie Christian

Investment management

![img-16.jpeg](img-16.jpeg)

Lynne Carpenter-Boggs

Soil science

![img-17.jpeg](img-17.jpeg)

![img-18.jpeg](img-18.jpeg)

![img-19.jpeg](img-19.jpeg)

**Micah Hartowski | Finance**
Systems thinker and spreadsheets expert;
background in farm operations and events.

![img-20.jpeg](img-20.jpeg)

**Alissa Atkins | Client Experience**
Creative producer with deep music industry
background.

![img-21.jpeg](img-21.jpeg)

**Tanya Marsh**
Funeral law

![img-22.jpeg](img-22.jpeg)

**Troy Hottle**
Life cycle assessment

Traction
Impact
Raise

Recompose is a public benefit corporation dedicated to transforming the funeral industry. Over the past ten years, we have inspired a movement by demonstrating the enormous potential of a re-designed death care experience. Through this effort, we have attracted an incredible team of people.

![img-23.jpeg](img-23.jpeg)

Recompose is projecting $3.5M in revenue over the next 24 months (not guaranteed). The relatively slow revenue growth between 2021 and 2022 was due to our moving from a temporary facility to our permanent Seattle facility.

In terms of long-term projected revenue, three million people die annually in the

U.S. and 57% chose to be cremated in 2022. That number is expected to rise over the next 10 years. (Of note, 64% of Americans report being interested in green funeral options.) Recompose's ambitious long-term goal is to capture 10% of the cremation market. If reached, this would result in $1.97B revenue at today's price ($7,000) and would result in over 170k tons of carbon savings annually.

We believe we are on to something really big and the company can be "wildly successful" which would include financial returns to investors. These returns may come in the form of:

- dividends
- an opportunity to sell stock to the company or to other parties
- some form of public offering
- a sale to the right partner
- a combination of the above

We also recognize Recompose is a non-cyclical business - people die no matter what the economic or market conditions may be. There's no question that the industry is due a re-design, and we believe we are poised to do just that.

Regarding ROI, we want to emphasize that investing in Recompose is a long-term prospect, primarily because we believe that an intentional but very ambitious growth trajectory will benefit the world and our investors. We have avoided investments from venture capital funds and others who demand an exit plan (and accompanying often unrealistic "hockey stick" patterns) that could possibly enhance their financial returns but force Recompose to compromise our mission. We are seeking investors who value that long-term, values-based approach.

![img-24.jpeg](img-24.jpeg)

The Washington Post

the Atlantic

**Newsletter List**
27,000+ members

MORNING BREW

**Precompose**
1200+ members

People
Los Angeles Times

**Brand**
Nature-focused, straightforward, beautiful

Seattle Times

**Search Engine Optimization (SEO)**
Domain authority of 61; 8,277 backlinks

NBC NEWS

**Local Outreach**
Hospices, elder care, estate law

Recompose aims for messaging that is clear, direct, and gentle. We market our at-need services to people who have just lost someone or for whom death is imminent. With Precompose, we market our preplanning options to people well before they face their own death or death of someone near to them. We also emphasize education and access to help build a community of well-informed death care customers.

## CHANGING HOW WE THINK ABOUT DEATH

It takes courage to reconsider our death practices.

But...our denial of death distances us from the moment-to-moment importance of being alive. When we embrace our mortality, we can more fully feel, more fully love, more fully speak our minds with courage, and more fully act on our core beliefs. Death is momentous, but it can be beautiful, even as it devastates.

Transforming the dead into soil reminds us that death is a natural part of life. By offering this new death care model we are strengthening the interconnectedness of humans to each other and creating deep change in the world.

The cost of funeral services can place an undue burden on low-income families. The expense often comes without warning and can be among the largest purchases made in a lifetime. Recompose believes that access to meaningful, sustainable death care is a human right. Our Community Fund program supports families for whom the full price of our service is a burden. It is funded with donations from our community, the online Recompose shop, and - eventually - by a portion of Recompose's profits.

![img-25.jpeg](img-25.jpeg)

Human composting avoids the greenhouse gasses that are produced by the manufacture of concrete grave livers, caskets, and coffins and by the burning of fossil fuels for cremation. The process reduces waste from burials and partialities and mercury emissions from cremation. In addition, less arable land is used for cemeteries, resulting in a reduction of mowing, fertilizing, and watering.

cemeteries, resulting in a reduction of mowing, fertilizing, and watering.

![img-26.jpeg](img-26.jpeg)

A fundamentally aerobic process, human composting does not produce methane, a potent greenhouse gas. (Methane is produced by anaerobic processes). Due to a combination of avoiding carbon output and sequestering carbon, the Recompose process saves one metric ton of carbon per person. This savings was determined by a Life Cycle Assessment (LCA) produced in partnership by Leiden University, Delft University of Technology, and Troy Hottle, PhD.

One metric ton of carbon is the equivalent of 98 gallons of gasoline consumed, 1,104 pounds of coal burned, or 40 backyard propane cylinders consumed.

![img-27.jpeg](img-27.jpeg)

![img-28.jpeg](img-28.jpeg)

Recompose's pre-money valuation for the last investment round (A3) was ~$60 million (based on issued and outstanding shares). This valuation took into consideration our proprietary green funeral technology, deep expertise, skilled team, first to market position, brand recognition, and market leadership. Projected EBITDA, potential preferred dividends, and the underlying characteristics of the death care business were also considered. Recompose raised just under $10M in the A3 round, making the post-money valuation just under $70 million (based on issued and outstanding shares).

Today, we can add the successful opening and operation of Recompose Seattle plus successful legalization efforts in both California and New York State. The pre-money valuation for the Community Round is ~$70 million (based on issued and outstanding shares) and ~$76 million (based on fully diluted shares).

![img-29.jpeg](img-29.jpeg)

## CURRENT RAISE

Recompose is proud to be raising funds through a Community Round. This type of raise makes ownership of Recompose accessible to many, which fits our values to a tee.

![img-30.jpeg](img-30.jpeg)

![img-0.jpeg](img-0.jpeg)

We chose Wefunder as our fundraising platform because, like Recompose, they are a public benefit corporation.

Type of raise: Community round

Platform: Wefunder

Type of shares: Preferred equity

Total raise: $5,000,000

Minimum investment: $1,000

![img-1.jpeg](img-1.jpeg)

We will use the proceeds from this Community Round for capital expenditures and operations costs related to the operation and expansion of Recompose. This includes, but is not limited to, marketing and outreach, business development, salaries, and capital expenses for new facilities.

## BUSINESS PHILOSOPHY

Recompose believes that expansion is necessary to have the impact we want on the world - to change the emotional landscape around death care and create environmental wealth at the end-of-life. It is our goal to surpass cremation as the most popular death care option. We can only do that if our system is available in many places, and our business model must support that growth. We are excited about making this growth happen.

Recompose is committed to growing our company organically and deliberately with strong and enduring financial results. The nature of our business supports this philosophy, and we are seeking investors who appreciate the potential and who are pleased to join Recompose as long-term investors.

![img-2.jpeg](img-2.jpeg)

![img-3.jpeg](img-3.jpeg)

# RECOMPOSE

JOIN US

**Attachment 3:** `document_3.pdf`

# SUBSCRIPTION AGREEMENT FOR SERIES CF-1 PREFERRED SHARES OF RECOMPOSE, PBC

THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. THIS INVESTMENT IS SUITABLE ONLY FOR PERSONS WHO CAN BEAR THE ECONOMIC RISK FOR AN INDEFINITE PERIOD OF TIME AND WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. FURTHERMORE, INVESTORS MUST UNDERSTAND THAT SUCH INVESTMENT IS ILLIQUID AND IS EXPECTED TO CONTINUE TO BE ILLIQUID FOR AN INDEFINITE PERIOD OF TIME. NO PUBLIC MARKET EXISTS FOR THE SECURITIES, AND NO PUBLIC MARKET IS EXPECTED TO DEVELOP FOLLOWING THIS OFFERING.

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES OR BLUE SKY LAWS AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND STATE SECURITIES OR BLUE SKY LAWS. ALTHOUGH AN OFFERING MATERIALS HAVE BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC"), THOSE OFFERING MATERIALS DO NOT INCLUDE THE SAME INFORMATION THAT WOULD BE INCLUDED IN A REGISTRATION STATEMENT UNDER THE ACT. THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON THE MERITS OF THIS OFFERING OR THE ADEQUACY OR ACCURACY OF THE SUBSCRIPTION AGREEMENT OR ANY OTHER MATERIALS OR INFORMATION MADE AVAILABLE TO PURCHASER IN CONNECTION WITH THIS OFFERING OVER THE WEB-BASED PLATFORM MAINTAINED BY WEFUNDER (THE "PORTAL"). ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

INVESTORS WHO ARE NOT "ACCREDITED INVESTORS" (AS THAT TERM IS DEFINED IN SECTION 501 OF REGULATION D PROMULGATED UNDER THE ACT) ARE SUBJECT TO LIMITATIONS ON THE AMOUNT THEY MAY INVEST, AS SET OUT BELOW. THE COMPANY IS RELYING ON THE REPRESENTATIONS AND WARRANTIES SET FORTH BY EACH PURCHASER IN THIS SUBSCRIPTION AGREEMENT AND THE OTHER INFORMATION PROVIDED BY PURCHASER IN CONNECTION WITH THIS OFFERING TO DETERMINE THE APPLICABILITY TO THIS OFFERING OF EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT.

This investment agreement (this "Agreement") is made and entered into as of the date indicated below (the "Effective Date") by and between Recompose, PBC, a Delaware Public Benefit Corporation (the "Company"), and You, the undersigned investor ("Purchaser").

1. Subscription. Purchaser hereby subscribes for and agrees to purchase shares of Series CF-1 Preferred Stock (the "Preferred Stock" or "Shares") of the Company at $4.7066 per share subject

to the terms and conditions set forth in this Agreement. The Purchaser agrees to purchase the number of Shares indicated by Purchaser's submission to the website maintained by Wefunder (the "Portal"). This Agreement is made pursuant to, and is subject to, the terms and conditions of the exemption from registration of securities offered pursuant to Regulation CF under the Securities Act of 1933. The rights of the Shares are as set forth in the Fifth Amended and Restated Certificate of Incorporation ("Restated Certificate" attached as Exhibit A) of the Company included as part of the Offering Materials (defined below). Purchaser understands that the Shares are being offered pursuant to offering materials filed with the SEC as part of the Regulation CF offering submission ("Offering Materials") and available on the Portal. If there are any inconsistencies, the provisions of this Agreement supplement and supersede the terms of the Offering Materials. This Agreement is irrevocable and unconditional and continues notwithstanding the death, incapacity, dissolution or bankruptcy of, or any other event or proceeding affecting Purchaser.

In order to purchase Preferred Stock, Purchaser must:

a. Complete this Agreement and all Transaction Agreements. To invest in the Shares, please follow the instructions on the Portal. Purchaser agrees that Purchaser's digital signature or other form of electronic acknowledgement, consent or acceptance (as the case may be), constitutes Purchaser's signature, acceptance and agreement of the terms of this Agreement and to the terms of: 1) the Stockholder Agreement of the Company dated as of April 30, 2019 (attached hereto as Exhibit B, the "Stockholder Agreement") and as further amended from time to time; and 2) the Adoption Agreement ("Adoption Agreement") (attached hereto as Exhibit C), providing that Purchaser becomes a "Holder" as such term is defined in the Stockholder Agreement, as a condition to the Company's acceptance of this Subscription (this Agreement, the Stockholder Agreement and the Adoption Agreement are collectively referred to as the "Transaction Agreements").

b. Provide payment for the full purchase price for the Shares. To invest in the Shares, please follow the instructions on the Portal.

2. Company's Right to Accept or Reject Subscriptions. The Company may accept or reject any subscription, in whole or in part. This means that the Company may sell to Purchaser a smaller number of shares of Preferred Stock than Purchaser subscribes to purchase or may choose not to sell any shares of Preferred Stock to Purchaser. If the Company accepts Purchaser's subscription, in whole or in part, this Agreement will constitute an irrevocable commitment by the Purchaser to purchase shares of the Preferred Stock as described in this Agreement and a copy of this Agreement will be executed by the Company and returned to Purchaser. If the Company rejects Purchaser's subscription in whole or in part, the Company will return the payment tendered for any unissued portion of the subscription.

3. Closing: Termination of the Offering: Other Offerings. The initial purchase and sale of the Shares in this offering shall take place on the Portal (which time and place are designated as the "Initial Closing"). If there is more than one closing, the term "Closing" shall apply to each such closing unless otherwise specified. The undersigned understands that the Company may terminate the offering at any time. The undersigned further understands that during and following termination of the offering, the Company may undertake offerings of other securities, which may or may not be on terms more favorable to an Purchaser than the terms of this Offering.

4. Purchaser Suitability Requirements. No investment limits are imposed on Purchasers who are accredited investors as that term is defined in 17 CFR §230.501. If Purchaser is not accredited then 1) if Purchaser's annual income or net worth is less than $124,000, Purchaser's subscription amount cannot exceed 5 percent of the greater of Purchaser's annual income or net worth; or 2) if Purchaser's annual income or net worth is greater than $124,000, cannot exceed the greater of 10 percent of the Purchaser's annual income or net worth.

For purposes of these investment limitations, spouses may combine their annual incomes and net worth. However, the value of the Purchaser's primary residence may not be included.

By signing this Agreement, Purchaser represents and warrants that the investment limitations described above are satisfied, assuming the Company's acceptance of the full amount of Purchaser's subscription amount indicated below.

5. Use of Proceeds. In accordance with the directions of the Company's Board of Directors, as it shall be constituted in accordance with the Stockholder Agreement, the Company will use the proceeds from the sale of the Shares for product development and other general corporate purposes.

6. Voting. The holders of the Shares have voting rights as described in the Restated Articles and bylaws of the Company, as required by law and in accordance with the Stockholder Agreement.

7. Dividends. Holders of Series CF-1 Preferred Stock may receive dividends as, if and when declared by the Company's board of directors (the "Board") and at such rates as is determined by the Board. Such dividends shall be non-cumulative and paid only out of funds that are legally available therefor. So long as any shares of Series A-1, A-2 and A-3 Preferred Stock are outstanding, the Company shall not pay or declare a dividend, whether in cash or property, or make any other distribution on the Series CF-1 Preferred Stock unless all guaranteed cumulative dividends on Series A-1, A-2 and A-3 Preferred Stock have been paid. So long as any shares of Series CF-1 Preferred Stock are outstanding, the Company shall not pay or declare any dividend, whether in cash or property, or make any other distribution on the Common Stock unless the same dividend has been declared and paid on the Series CF-1 Preferred Stock. Notwithstanding anything in this Agreement to the contrary, no dividends or other distributions shall be paid to any shareholders of the Company if the payment of such dividend or distribution would violate the law.

8. Representations, Warranties and Covenants of Purchaser. Purchaser hereby represents, warrants and covenants to the Company as follows:

(a) Power & Authority. Purchaser has full power and authority to execute, deliver and perform this Subscription and to consummate the transactions contemplated hereby. This Subscription has been duly and validly executed and delivered by Purchaser and constitutes the legal, valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, except to the extent that enforcement may be limited by applicable bankruptcy laws, insolvency, reorganization or other similar laws affecting creditors' rights generally and by general equitable principles (regardless of whether enforcement is sought in equity or at law).

(b) No Conflicts. Purchaser's execution and delivery of this Subscription and the performance of Purchaser's obligations hereunder do not and will not (i) conflict with, violate or

result in any default under any mortgage, indenture, agreement, instrument or other contract to which Purchaser is a party or by which Purchaser or Purchaser's property is bound, (ii) violate any judgment, order, decree, law, statute, regulation or other judicial or governmental restriction to which Purchaser is subject or (iii) require the authorization, consent or prior approval of any person or governmental authority.

(c) No Registration. Purchaser understands that the Shares have not been, and will not be, registered under the Securities Act by reason of a specific exemption from the registration provisions of the Securities Act, the availability of which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of Purchaser's representations as expressed herein or otherwise made pursuant hereto.
(d) Investment Intent. Purchaser is acquiring the Shares as an investment for Purchaser's own account, not as a nominee or agent, and not with a view to, or for resale in connection with, any distribution thereof. Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the Shares, nor does Purchaser have any contract, undertaking, agreement or arrangement for the same. If Purchaser is not a natural person, Purchaser was not organized for the specific purpose of acquiring the Shares.
(e) Investment Experience. Purchaser is capable of evaluating the merits and risks of an investment in the Company and protecting Purchaser's own interests.
(f) Speculative Nature of Investment. Purchaser understands and acknowledges that investment in the Shares is highly speculative and involves substantial risks. Purchaser can bear the economic risk of this investment and is able, without impairing Purchaser's financial condition, to hold the Shares for an indefinite period of time and to suffer a complete loss of this investment.
(g) Knowledge of the Company: Access to Information. Purchaser is familiar with the business and operations of the Company and has been provided with sufficient information, through the Offering Materials, with respect to the business and operations of the Company and has carefully reviewed the same. Purchaser has received the Offering Materials and all other information considered necessary or appropriate for deciding whether to acquire the Shares. Purchaser understands that any such discussions, as well as any information issued by the Company, were intended to describe certain aspects of the Company's business and prospects but were not necessarily a thorough or exhaustive description. Purchaser acknowledges that any business plans prepared by the Company have been, and continue to be, subject to change and that any projections included in such business plans or otherwise are necessarily speculative in nature, and it can be expected that some or all of the assumptions underlying the projections will not materialize or will vary significantly from actual results.
(h) Restrictions on Resales. Purchaser acknowledges that the Shares are restricted securities. Sales (including all forms of transfers) of restricted securities must comply with SEC rules and regulations, including the requirement that such securities be registered or that a sale is exempt from registration.

(i) Restrictions under the Stockholder Agreement. In addition to the restrictions imposed by applicable state and federal securities laws, the Shares will be subject to transfer restrictions contained in the Stockholder Agreement as amended from time to time and any other governing documents of the Company or any successor entity. Purchaser acknowledges receipt, review and understanding of the Stockholder Agreement.

(j) No Public Market. Purchaser understands and acknowledges that no public market now exists for any of the securities issued by the Company and that the Company has made no assurances that a public market will ever exist for the Company's securities.

(k) Legal Counsel. Purchaser has had the opportunity to review this Subscription, the Amended Certificate, the Stockholder Agreement, and the Offering Materials of the Company delivered in connection with its sale of the Shares with Purchaser's own legal counsel. Purchaser is not relying on any statements or representations of the Company or its agents for legal advice with respect to this Subscription or the transactions contemplated by this Subscription.

(l) Tax Advisors. Purchaser has had the opportunity to review with Purchaser's own tax advisors the U.S. federal, state and local and non-U.S. tax consequences of this Subscription and the transactions contemplated by this Subscription. With respect to such matters, Purchaser relies solely on any such advisors and not on any statements or representations of the Company or any of its agents, written or oral. Purchaser understands that Purchaser (and not the Company) will be responsible for Purchaser's own tax liability that may arise as a result of this investment and the transactions contemplated by this Subscription.

(m) Transfer Restrictions. Purchaser acknowledges that the certificates evidencing the Shares, and any substitutions or replacements thereof, shall bear legends in substantially the following form:

"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS IN ACCORDANCE WITH APPLICABLE REGISTRATION REQUIREMENTS OR AN EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE, TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS."

"THESE SECURITIES ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFERABILITY AND RESALE AS SET FORTH IN THE SUBSCRIPTION AGREEMENT COVERING THESE SECURITIES, THE ISSUER'S STOCKHOLDER AGREEMENT, AS AMENDED

FROM TIME TO TIME, AND ANY OTHER GOVERNING DOCUMENTS OF THE ISSUER OF THESE SECURITIES AND ANY SUCCESSOR ENTITY. A COPY OF ANY SUCH DOCUMENT IS ON FILE WITH THE ISSUER AND IS AVAILABLE UPON REQUEST."

(n) Accurate Information Provided by Purchaser. All information which Purchaser has furnished and is furnishing to the Company, including, without limitation, the representation as to Purchaser's suitability to invest in this offering and all other representations contained in this Agreement, are true, correct and complete as of the date of this Agreement, and if there should be any material change in such information prior to Purchaser's receipt of the Shares, Purchaser will immediately furnish such revised or corrected information to the Company. Purchaser is executing and delivering this Subscription with full awareness of its implications and in recognition of the fact that the Company is relying on Purchaser's representations and warranties contained herein in selling the Shares to Purchaser, and that the Company and other investors may be damaged if such representations and warranties are false, incorrect or incomplete.

(o) Market Stand-off. If requested by the Company or an underwriter of the Shares or shares of common stock (or other securities) of the Company (or its successor), Purchaser shall not sell or otherwise transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, of such securities of the Company held by Purchaser (other than those included in the registration) during the one hundred eighty (180) day period following the effective date of the registration statement for the Company's initial public offering filed under the Securities Act (or such other period as may be requested by the Company or an underwriter to accommodate regulatory restrictions on (i) the publication or other distribution of research reports and (ii) analyst recommendations and opinions, including, but not limited to, the restrictions contained in FINRA Rule 2241, or any successor provisions or amendments thereto). The obligations described in this section shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a transaction on Form S-4 or similar forms that may be promulgated in the future. The Company may impose stop-transfer instructions and may stamp each certificate with a legend with respect to the shares of common stock (or other securities) subject to the foregoing restriction until the end of such one hundred eighty (180) day (or other) period. Purchaser agrees to execute a market stand-off agreement with the relevant underwriters in customary form consistent with the provisions of this section.

9. Purchaser Acknowledgements of Risks Associated with Subscription. This Subscription involves a high degree of risk, including the possible loss of Purchaser's entire investment in the Shares. Some of the risks include, without limitation, those set forth in the PPM, which Purchaser has read and understands.

10. Indemnification. Purchaser agrees to indemnify and hold harmless the Company and its officers, members of its board of directors and affiliates and each other person, if any, who controls any thereof, within the meaning of Section 15 of the Securities Act, against any and all loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all expenses reasonably incurred in investigating, preparing or defending against any litigation commenced or threatened or any claim whatsoever) arising out of or based upon any false representation or

warranty made by Purchaser, or breach or failure by Purchaser to comply with any covenant or agreement made by Purchaser in this Subscription, the Stockholder Agreement or any other document furnished by Purchaser to the Company in connection with this Subscription.

11. Arbitration. Purchaser agrees that any controversy between or among Purchaser and the Company arising out of this Subscription, shall be submitted to arbitration in Seattle, Washington before the American Arbitration Association in accordance with its rules. Arbitration must be commenced by service upon the other party of a written demand for arbitration or a written notice of intention to arbitrate, therein electing the arbitration tribunal. In the event Purchaser does not make such election within five (5) business days of such demand or notice, Purchaser authorizes the Company to do so on behalf of Purchaser as Purchaser's attorney-in-fact. Purchaser acknowledges that such arbitration shall be final and binding on the parties hereto and that Purchaser is waiving the right to seek remedies in court, including the right to a jury trial. Purchaser also acknowledges that pre-arbitration discovery is generally more limited than and different from court proceedings, that the arbitrators' award is not required to include factual findings or legal reasoning and that any party's right to appeal or to seek modification of rulings by the arbitrators is strictly limited. The prevailing party in such arbitration shall be entitled to recover from the other party all reasonable fees, costs and expenses of enforcing any rights of the prevailing party, including without limitation, reasonable attorneys' fees and expenses.
12. No Revocation. This Agreement may not be canceled, terminated or revoked by Purchaser and the representations, warranties and covenants made by Purchaser in this Subscription shall survive indefinitely. This Subscription is not transferable or assignable by Purchaser; provided, that this Subscription shall survive the death or disability of Purchaser and shall be binding upon Purchaser's heirs, executors, administrators, successors and permitted assigns.
13. Governing Law. This Agreement shall be enforced, governed and construed in all respects in accordance with the laws of the State of Delaware, exclusive of its conflict of law rules.
14. Jurisdiction and Venue. Purchaser irrevocably consents to the exclusive jurisdiction and venue of any court within King County, Washington, in connection with any matter based upon or arising out of this Subscription or the matters contemplated herein, and agrees that process may be served upon them in any manner authorized by the laws of the State of Washington for such persons.
15. Additional Information. Within five (5) business days after receipt of a written request from the Company, Purchaser agrees to provide such information and to execute and deliver such documents as reasonably may be necessary to comply with any and all laws, regulations and ordinances to which the Company is subject.
16. Entire Agreement. This Subscription constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and may be amended only by a writing executed by the parties hereto. Each provision of this Subscription is intended to be severable from every other provision, and the invalidity or illegality of any portion hereof shall not affect the validity or legality of the remainder thereof.

IN WITNESS WHEREOF, the parties have executed this agreement as of [EFFECTIVE DATE] _______________.

COMPANY:

Recompose, PBC

*Founder Signature*

Name: [FOUNDER_NAME]

Title: [FOUNDER_TITLE]

Read and Approved (For IRA Use Only):

INVESTOR:

By: _________________________

*Investor Signature*

By: _________________________

Name: [INVESTOR NAME]

Title: [INVESTOR TITLE]

The Investor is an “accredited investor” as that term is defined in Regulation D promulgated by the Securities and Exchange Commission under the Securities Act.

Please indicate Yes or No by checking the appropriate box:

[ ] Accredited

[X] Not Accredited

SIGNATURE PAGE

# **Exhibit A**  
Fifth Amended and Restated Articles

# FIFTH AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION OF RECOMPOSE, PBC
A PUBLIC BENEFIT CORPORATION

Recompose, PBC, a corporation organized and existing under the laws of the State of Delaware (the "Corporation"), certifies that:

1. The name of the Corporation is Recompose, PBC. The Corporation was originally incorporated under the name "RecomposeMe, PBC". The Corporation's original Certificate of incorporation was filed with the Secretary of State of the State of Delaware on May 10, 2017.
2. This Fifth Amended and Restated Certificate of Incorporation was duly adopted in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware and has been duly approved by the written consent of the stockholders of the Corporation in accordance with Section 228 of the General Corporation Law of the State of Delaware.
3. The text of the Certificate of Incorporation is amended and restated to read as set forth in EXHIBIT A attached hereto.

IN WITNESS WHEREOF, Recompose, PBC has caused this Fifth Amended and Restated Certificate of Incorporation to be signed by Katrina Spade, a duly authorized officer of the Corporation, on February 17, 2023.

Katrina Spade

Katrina Spade, President

02/17/2023

Date

State of Delaware

Secretary of State

Division of Corporations

Delivered 10:07 AM 02/17/2023

FILED 10:07 AM 02/17/2023

SR 20230564140 - File Number 6406989

# EXHIBIT A

# ARTICLE I

The name of the Corporation is Recompose, PBC (the "Corporation").

# ARTICLE II

The Corporation shall be a public benefit corporation as contemplated by subchapter XV of the Delaware General Corporation Law. The Corporation is intended to produce a public benefit or public benefits and to operate in a responsible and sustainable manner. The Corporation shall be managed in a manner that balances the stockholders' pecuniary interests, the best interests of those materially affected by the Corporation's conduct, and the public benefit or public benefits identified herein.

# ARTICLE III

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. The specific public benefit to be promoted by the Corporation is to provide environmentally sustainable and transparent services in the field of death care.

# ARTICLE IV

The address of the Corporation's registered office in the State of Delaware is 3500 S. DuPont Highway, City of Dover, County of Kent, 19901, and the name of the registered agent at such address is GKL Registered Agents of DE, Inc.

# ARTICLE V

The total number of shares of stock that the Corporation shall have authority to issue is thirty-two million five hundred thousand (32,500,000), consisting of twenty million (20,000,000) shares of Common Stock, $0.0001 par value per share (the "Common Stock"), and twelve million five hundred thousand (12,500,000) shares of Preferred Stock, $0.0001 par value per share. The first Series of Preferred Stock shall be designated as "Series A-1 Preferred Stock" and shall consist of six hundred ninety-nine thousand nine hundred thirty (699,930) shares (the "Series A-1 Preferred Stock"). The second Series of Preferred Stock shall be designated as "Series A-2 Preferred Stock" and shall consist of four million five hundred three thousand eight hundred seventy-two (4,503,872) shares (the "Series A-2 Preferred Stock"). The third Series of Preferred Stock shall be designated as "Series A-3 Preferred Stock" and shall consist of (3,187,002) (the "Series A-3 Preferred Stock"). The fourth Series of Preferred Stock shall be designated as "Series CF-1 Preferred Stock" and shall consist of one million sixty two thousand three hundred thirty seven (1,062,337) shares (the Series CF-1 Preferred Stock"). The remaining three million forty six thousand eight hundred fifty nine (3,046,859) shares shall be undesignated preferred stock. The undesignated preferred stock together with the Series A-1 Preferred Stock, the Series A-2 Preferred Stock, the Series A-3 Preferred Stock, and the Series CF-1 Preferred

Stock shall collectively be referred to as the "Preferred Stock".

# ARTICLE VI

The terms and provisions of the Common Stock and Preferred Stock are as follows:

1. Definitions. For purposes of this ARTICLE VI, the following definitions shall apply:

a. "Conversion Price" shall mean $1.00 per share for the Series A-1 Preferred Stock and $1.5124 per share for the Series A-2 Preferred Stock, $4.7066 for the Series A-3 Preferred Stock, and $4.7066 per share for the Series CF-1 Preferred Stock (subject to adjustment from time to time for Recapitalizations and as otherwise set forth elsewhere herein).
b. "Convertible Securities" shall mean any evidences of indebtedness, shares or other securities convertible into or exchangeable for Common Stock.
c. "Distribution" shall mean the transfer of cash or other property without consideration whether by way of dividend or otherwise, other than dividends on Common Stock payable in Common Stock, or the purchase or redemption of shares of the Corporation by the Corporation for cash or property other than:

i. repurchases of Common Stock issued to or held by employees, officers, directors or consultants of the Corporation or its subsidiaries upon termination of their employment or services pursuant to agreements providing for the right of said repurchase,
ii. repurchases of Common Stock issued to or held by employees, officers, directors or consultants of the Corporation or its subsidiaries pursuant to rights of first refusal contained in agreements providing for such right,
iii. repurchase of capital stock of the Corporation in connection with the settlement of disputes with any stockholder, and
iv. any other repurchase or redemption of capital stock of the Corporation approved by the holders of the Common and Preferred Stock of the Corporation voting as separate classes.

d. "Dividend Rate" shall mean an annual rate of six percent (6%) per share based on Original Issue Price for all shares of Series A-1 Preferred Stock, Series A-2 Preferred Stock, and Series A-3 Preferred Stock. No Dividend Rate shall apply to the Series CF-1 Preferred Stock.
e. "Liquidation Preference" shall mean $1.00 per share for the Series A-1 Preferred Stock, $1.5124 per share for the Series A-2 Preferred Stock, $4.7066 for the Series A-3 Preferred Stock, and $4.7066 per share for the Series CF-1 Preferred Stock (subject to adjustment from time to time for Recapitalizations as set forth elsewhere herein).
f. "Options" shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire Common Stock or Convertible Securities.

g. "Original Issue Price" shall mean $1.00 per share for the Series A-1 Preferred Stock, $1.5124 per share for the Series A-2 Preferred Stock, $4.7066 for the Series A-3 Preferred Stock, and $4.7066 per share for the Series CF-1 Preferred Stock (subject to adjustment from time to time for Recapitalizations as set forth elsewhere herein).

h. "Recapitalization" shall mean any stock dividend, stock split, combination of shares, reorganization, recapitalization, reclassification or other similar event.

# 2. Dividends.

a. Preferred Stock. Dividends on shares of Series A-1 Preferred Stock, Series A-2 Preferred Stock, and Series A-3 Preferred Stock shall accrue and be paid differently than dividends on shares of Series CF-1 Preferred Stock. Dividends on shares of Series A-1 Preferred Stock, Series A-2 Preferred Stock, and Series A-3 Preferred Stock shall accrue on a cumulative basis at the Dividend Rate beginning as of the date that such share is issued. The Corporation shall have no obligation to pay any dividends, except when, as and if declared by the Board of Directors out of any assets at the time legally available therefor or as otherwise specifically provided in this Fourth Amended and Restated Certificate of Incorporation. Payment of any dividends to the holders of Series A-1 Preferred Stock, Series A-2 Preferred Stock, and Series A-3 Preferred Stock shall be on a pro rata, pari passu basis in proportion to dividends accrued for each series of Preferred Stock. Dividends on shares of Series CF-1 Preferred Stock are not cumulative and shall only be paid if and when declared by the Corporation. No Distribution shall be made with respect to the Common Stock or Series CF-1 Preferred Stock until all declared and accrued but unpaid dividends on the Series A-1 Preferred Stock, Series A-2 Preferred Stock, and Series A-3 Preferred Stock have been paid or set aside for payment to the Series A-1 Preferred Stock, Series A-2 Preferred Stock, and Series A-3 Preferred Stock stockholders.

b. Additional Dividends. The Corporation shall not declare, set aside or pay any dividends on any share of Common Stock (other than dividends on Common Stock payable solely in Common Stock) unless a dividend (including the amount of any dividends paid pursuant to the above provisions of this Section 2) is declared, set aside or paid with respect to all outstanding shares of Preferred Stock in an amount for each such share of Preferred Stock at least equal to the greater of (i) the amount of the cumulative dividends then accrued, if any, on such share of Preferred Stock and (ii) the aggregate amount of the dividends for all shares of Common Stock into which each such share of Preferred Stock could then be converted, calculated on the record date for determination of holders entitled to receive such dividend.

c. Non-Cash Distributions. Whenever a Distribution provided for in this Section 2 shall be payable in property other than cash, the value of such Distribution shall be deemed to be the fair market value of such property as determined in good faith by the Board of Directors.

d. Waiver of Dividends. Any dividend preference and any cumulative dividend of any series of Preferred Stock may be waived, in whole or in part, by the consent or vote of the holders of the majority of the outstanding shares of such series.

# 3. Liquidation Rights.

a. Liquidation Preference. In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, the holders of the Preferred Stock shall be entitled to receive, prior and in preference to any Distribution of any of the assets of the Corporation to the holders of the Common Stock by reason of their ownership of such stock, an amount per share for each share of Preferred Stock held by them equal to the sum of (i) the Liquidation Preference specified for such share of Preferred Stock and (ii) all declared or accrued but unpaid dividends (if any) on such share of Preferred Stock, or such lesser amount as may be approved by the holders of the majority of the outstanding shares of Preferred Stock. If upon the liquidation, dissolution or winding up of the Corporation, the assets of the Corporation legally available for distribution to the holders of the Preferred Stock are insufficient to permit the payment to such holders of the full amounts specified in this Section 3(a), then the entire assets of the Corporation legally available for distribution shall be distributed with equal priority and pro rata among the holders of the Preferred Stock in proportion to the full amounts they would otherwise be entitled to receive pursuant to this Section 3(a).
b. Remaining Assets. After the payment or setting aside for payment to the holders of Preferred Stock of the full amounts specified in Section 3(a), the entire remaining assets of the Corporation legally available for distribution shall be distributed pro rata to holders of the Common Stock of the Corporation in proportion to the number of shares of Common Stock held by them.
c. Shares not Treated as Both Preferred Stock and Common Stock in any Distribution. Shares of Preferred Stock shall not be entitled to be converted into shares of Common Stock in order to participate in any Distribution, or series of Distributions, as shares of Common Stock, without first foregoing participation in the Distribution, or series of Distributions, as shares of Preferred Stock.
d. Reorganization. For purposes of this Section 3, a liquidation, dissolution or winding up of the Corporation shall be deemed to be occasioned by, or to include, (i) the acquisition of the Corporation by another entity by means of any transaction or series of related transactions to which the Corporation is party (including, without limitation, any stock acquisition, reorganization, merger or consolidation but excluding any sale of stock for capital raising purposes) other than a transaction or series of related transactions in which the holders of the voting securities of the Corporation outstanding immediately prior to such transaction or series of related transactions retain, immediately after such transaction or series of related transactions, as a result of shares in the Corporation held by such holders prior to such transaction or series of related transactions, at least a majority of the total voting power represented by the outstanding voting securities of the Corporation or such other surviving or resulting entity (or if the Corporation or such other surviving or resulting entity is

a wholly-owned subsidiary immediately following such acquisition, its parent); (ii) a sale, lease or other disposition of all or substantially all of the assets of the Corporation and its subsidiaries taken as a whole by means of any transaction or series of related transactions, except where such sale, lease or other disposition is to a wholly-owned subsidiary of the Corporation; or (iii) any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary.

e. Valuation of Non-Cash Consideration. If any assets of the Corporation distributed to stockholders in connection with any liquidation, dissolution, or winding up of the Corporation are other than cash, then the value of such assets shall be their fair market value as determined in good faith by the Board of Directors, except that any publicly-traded securities to be distributed to stockholders in a liquidation, dissolution, or winding up of the Corporation shall be valued as follows:

i. if the securities are then traded on a national securities exchange, then the value of the securities shall be deemed to be the average of the closing prices of the securities on such exchange over the ten (10) trading day period ending five (5) trading days prior to the Distribution;

ii. if the securities are actively traded over-the-counter, then the value of the securities shall be deemed to be the average of the closing bid prices of the securities over the ten (10) trading day period ending five (5) trading days prior to the Distribution.

In the event of a merger or other acquisition of the Corporation by another entity, the Distribution date shall be deemed to be the date such transaction closes.

4. Conversion. The holders of the Preferred Stock shall have conversion rights as follows:

a. Right to Convert. Each share of Preferred Stock shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share at the office of the Corporation or any transfer agent for the Preferred Stock, into that number of fully paid, nonassessable shares of Common Stock determined by dividing the Original Issue Price for the relevant series by the Conversion Price for such series. (The number of shares of Common Stock into which each share of Preferred Stock of a series may be converted is hereinafter referred to as the "Conversion Rate" for each such series.) Upon any decrease or increase in the Conversion Price for any series of Preferred Stock, as described in this Section 4, the Conversion Rate for such series shall be appropriately increased or decreased.

b. Automatic Conversion. Each share of Preferred Stock shall automatically be converted into fully-paid, non-assessable shares of Common Stock at the then effective Conversion Rate for such share (i) immediately prior to the closing of a firm commitment underwritten initial public offering pursuant to an effective registration statement filed under the Securities Act of 1933, as amended (the "Securities Act"), covering the offer and sale of the Corporation's Common Stock, provided that the aggregate gross proceeds to the Corporation are not less

than $35,000,000 (before deduction of underwriters commissions and expenses), or (ii) upon the receipt by the Corporation of a written request for such conversion from the holders of a majority of the Preferred Stock then outstanding (voting as a single class and on an as-converted basis), or, if later, the effective date for conversion specified in such requests (each of the events referred to in (i) and (ii) are referred to herein as an "Automatic Conversion Event").

c.

**Mechanics of Conversion.** No fractional shares of Common Stock shall be issued upon conversion of Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the then fair market value of a share of Common Stock as determined by the Board of Directors. For such purpose, all shares of Preferred Stock held by each holder of Preferred Stock shall be aggregated, and any resulting fractional share of Common Stock shall be paid in cash. Before any holder of Preferred Stock shall be entitled to convert the same into full shares of Common Stock, and to receive certificates therefor, such holder shall either (A) surrender the certificate or certificates therefor, duly endorsed, at the office of the Corporation or of any transfer agent for the Preferred Stock or (B) notify the Corporation or its transfer agent that such certificates have been lost, stolen or destroyed and execute an agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificates, and shall give written notice to the Corporation at such office that such holder elects to convert the same; provided, however, that on the date of an Automatic Conversion Event, the outstanding shares of Preferred Stock shall be converted automatically without any further action by the holders of such shares and whether or not the certificates representing such shares are surrendered to the Corporation or its transfer agent; provided further, however, that the Corporation shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon such Automatic Conversion Event unless either the certificates evidencing such shares of Preferred Stock are delivered to the Corporation or its transfer agent as provided above, or the holder notifies the Corporation or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificates. On the date of the occurrence of an Automatic Conversion Event, each holder of record of shares of Preferred Stock shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, notwithstanding that the certificates representing such shares of Preferred Stock shall not have been surrendered at the office of the Corporation, that notice from the Corporation shall not have been received by any holder of record of shares of Preferred Stock, or that the certificates evidencing such shares of Common Stock shall not then be actually delivered to such holder.

The Corporation shall, as soon as practicable after such delivery, or after such agreement and indemnification, issue and deliver at such office to such holder of Preferred Stock a certificate or certificates for the number of shares of Common Stock to which the holder shall be entitled as aforesaid and a check payable to the holder in the amount of any cash amounts payable as the result of a conversion

into fractional shares of Common Stock, plus any declared and unpaid dividends on the converted Preferred Stock. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of Preferred Stock to be converted, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date; provided, however, that if the conversion is in connection with an underwritten offer of securities registered pursuant to the Securities Act or a merger, sale, financing, or liquidation of the Corporation or other event, the conversion may, at the option of any holder tendering Preferred Stock for conversion, be conditions upon the closing of such transaction or upon the occurrence of such event, in which case the person(s) entitled to receive the Common Stock issuable upon such conversion of the Preferred Stock shall not be deemed to have converted such Preferred Stock until immediately prior to the closing of such transaction or the occurrence of such event.

# d. Adjustments to Conversion Price for Diluting Issues.

i. Special Definition. For purposes of this paragraph 4(d), "Additional Shares of Common" shall mean all shares of Common Stock issued (or, pursuant to paragraph 4(d)(iii), deemed to be issued) by the Corporation after the filing of this Fourth Amended and Restated Certificate of Incorporation, other than issuances or deemed issuances shares of:

1. Common Stock upon the conversion of the Preferred Stock;
2. shares of Common Stock and options, warrants or other rights to purchase Common Stock issued or issuable to employees, officers or directors of, or consultants or advisors to the Corporation or any subsidiary pursuant to stock grants.
3. restricted stock purchase agreements, option plans, purchase plans, incentive programs or similar arrangements;
4. shares of Common Stock upon the exercise or conversion of Options or Convertible Securities:
5. shares of Common Stock issued or issuable as a dividend or distribution on Preferred Stock or pursuant to any event for which adjustment is made pursuant to paragraph 4(e), 4(f) or 4(g) hereof; shares of Common Stock issued or issuable in a registered public offering under the Securities Act;
6. shares of Common Stock issued or issuable pursuant to the acquisition of another corporation by the Corporation by merger, purchase of substantially all of the assets or other reorganization or to a joint venture agreement, provided, that such issuances are approved by the Board of Directors:
7. shares of Common Stock issued or issuable to banks, equipment lessors or other financial institutions pursuant to a debt financing or commercial leasing transaction approved by the Board of Directors:
8. shares of Common Stock issued or issuable in connection with any

settlement of any action, suit, proceeding or litigation approved by the Board of Directors;

9. shares of Common Stock issued or issuable in connection with sponsored research, collaboration, technology license, development, OEM, marketing or other similar agreements or strategic partnerships approved by the Board of Directors;
10. shares of Common Stock issued or issuable to suppliers or third-party service providers in connection with the provision of goods or services pursuant to transactions approved by the Board of Directors; and
11. shares of Common Stock that are otherwise excluded from the definition of "Additional Shares of Common" by consent of the holders of a majority in interest of the Preferred Stock.

ii. No Adjustment of Conversion Price. No adjustment in the Conversion Price of a particular series of Preferred Stock shall be made in respect of the issuance of Additional Shares of Common unless the consideration per share (as determined pursuant to paragraph 4(d)(v)) for an Additional Share of Common issued or deemed to be issued by the Corporation is less than the Conversion Price in effect on the date of, and immediately prior to such issue, for such series of Preferred Stock.

iii. Deemed Issue of Additional Shares of Common. In the event the Corporation at any time or from time to time after the date of the filing of this Fourth Amended and Restated Certificate of Incorporation shall issue any Options or Convertible Securities or shall fix a record date for the determination of holders of any class of securities entitled to receive any such Options or Convertible Securities, then the maximum number of shares (as set forth in the instrument relating thereto without regard to any provisions contained therein for a subsequent adjustment of such number) of Common Stock issuable upon the exercise of such Options or, in the case of Convertible Securities, the conversion or exchange of such Convertible Securities or, in the case of Options for Convertible Securities, the exercise of such Options and the conversion or exchange of the underlying securities, shall be deemed to have been issued as of the time of such issue or, in case such a record date shall have been fixed, as of the close of business on such record date, provided that in any such case in which shares are deemed to be issued:

1. no further adjustment in the Conversion Price of any series of Preferred Stock shall be made upon the subsequent issue of Convertible Securities or shares of Common Stock in connection with the exercise of such Options or conversion or exchange of such Convertible Securities;
2. if such Options or Convertible Securities by their terms provide, with the passage of time or otherwise, for any change in the consideration payable to the Corporation or in the number of shares of Common Stock issuable upon the exercise, conversion or

exchange thereof (other than a change pursuant to the anti-dilution provisions of such Options or Convertible Securities such as this Section 4(d) or pursuant to Recapitalization provisions of such Options or Convertible Securities such as Sections 4(e), 4(l) and 4(g) hereof), the Conversion Price of each series of Preferred Stock and any subsequent adjustments based thereon shall be recomputed to reflect such change as if such change had been in effect as of the original issue thereof (or upon the occurrence of the record date with respect thereto);

3. no readjustment pursuant to clause (2) above shall have the effect of increasing the Conversion Price of a series of Preferred Stock to an amount above the Conversion Price that would have resulted from any other issuances of Additional Shares of Common and any other adjustments provided for herein between the original adjustment date and such readjustment date;

4. upon the expiration of any such Options or any rights of conversion or exchange under such Convertible Securities which shall not have been exercised, the Conversion Price of each Series of Preferred Stock computed upon the original issue thereof (or upon the occurrence of a record date with respect thereto) and any subsequent adjustments based thereon shall, upon such expiration, be recomputed as if:

a. in the case of Convertible Securities or Options for Common Stock, the only Additional Shares of Common issued were the shares of Common Stock, if any, actually issued upon the exercise of such Options or the conversion or exchange of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such exercised Options plus the consideration actually received by the Corporation upon such exercise or for the issue of all such Convertible Securities which were actually converted or exchanged, plus the additional consideration, if any, actually received by the Corporation upon such conversion or exchange, and

b. in the case of Options for Convertible Securities, only the Convertible Securities, if any, actually issued upon the exercise thereof were issued at the time of issue of such Options, and the consideration received by the Corporation for the Additional Shares of Common deemed to have been then issued was the consideration actually received by the Corporation for the issue of such exercised Options, plus the consideration deemed to have been received by the Corporation (determined pursuant to Section 4(d)(v)) upon the issue of the Convertible Securities with respect to which such Options were actually exercised; and

5. if such record date shall have been fixed and such Options or Convertible Securities are not issued on the date fixed therefor, the adjustment previously made in the Conversion Price which became effective on such record date shall be canceled as of the close of business on such record date, and thereafter the Conversion Price shall be adjusted pursuant to this paragraph 4(d)(iii) as of the actual date of their issuance.

iv. Adjustment of Conversion Price Upon Issuance of Additional Shares of Common. In the event this Corporation shall issue Additional Shares of Common (including Additional Shares of Common deemed to be issued pursuant to paragraph 4(d)(iii)) without consideration or for a consideration per share less than the applicable Conversion Price of a series of Preferred Stock in effect on the date of and immediately prior to such issue, then, the Conversion Price of the affected series of Preferred Stock shall be reduced, concurrently with such issue, to a price (calculated to the nearest cent) determined by multiplying such Conversion Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such issue plus the number of shares which the aggregate consideration received by the Corporation for the total number of Additional Shares of Common so issued would purchase at such Conversion Price, and the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to such issue plus the number of such Additional Shares of Common so issued. Notwithstanding the foregoing, the Conversion Price shall not be reduced at such time if the amount of such reduction would be less than $0.01, but any such amount shall be carried forward, and a reduction will be made with respect to such amount at the time of, and together with, any subsequent reduction which, together with such amount and any other amounts so carried forward, equal $0.01 or more in the aggregate. For the purposes of this Subsection 4(d)(iv), all shares of Common Stock issuable upon conversion of all outstanding shares of Preferred Stock and the exercise and/or conversion of any other outstanding Convertible Securities and all outstanding Options shall be deemed to be outstanding.

v. Determination of Consideration. For purposes of this subsection 4(d), the consideration received by the Corporation for the issue (or deemed issue) of any Additional Shares of Common shall be computed as follows:

1. Cash and Property. Such consideration shall:

a. insofar as it consists of cash, be computed at the aggregate amount of cash received by the Corporation before deducting any reasonable discounts, commissions or other expenses allowed, paid or incurred by the Corporation for any underwriting or otherwise in connection with such issuance;

b. insofar as it consists of property other than cash, be computed at the fair market value thereof at the time of such issue, as determined in good faith by the Board of Directors; and

c. in the event Additional Shares of Common are issued together with other shares or securities or other assets of the Corporation for consideration which covers both, be the proportion of such consideration so received, computed as provided in clauses (a) and (b) above, as reasonably determined in good faith by the Board of Directors.

2. Options and Convertible Securities. The consideration per share received by the Corporation for Additional Shares of Common deemed to have been issued pursuant to paragraph 4(d)(iii) shall be determined by dividing

a. the total amount, if any, received or receivable by the Corporation as consideration for the issue of such Options or Convertible Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Corporation upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities by

b. the maximum number of shares of Common Stock (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities.

e. Adjustments for Subdivisions or Combinations of Common Stock. In the event the outstanding shares of Common Stock shall be subdivided (by stock split, by payment of a stock dividend or otherwise), into a greater number of shares of Common Stock, the Conversion Price of each series of Preferred Stock in effect immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision, be proportionately decreased. In the event the outstanding shares of Common Stock shall be combined (by reclassification or otherwise) into a lesser number of shares of Common Stock, the Conversion Prices in effect immediately prior to such combination shall, concurrently with the effectiveness of such combination, be proportionately increased.

f. Adjustments for Subdivisions or Combinations of Preferred Stock. In the event the outstanding shares of Preferred Stock or a series of Preferred Stock shall be

subdivided (by stock split, by payment of a stock dividend or otherwise), into a greater number of shares of Preferred Stock, Original Issue Price and Liquidation Preference of the affected series of Preferred Stock in effect immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision, be proportionately decreased. In the event the outstanding shares of Preferred Stock or a series of Preferred Stock shall be combined (by reclassification or otherwise) into a lesser number of shares of Preferred Stock, Original Issue Price and Liquidation Preference of the affected series of Preferred Stock in effect immediately prior to such combination shall, concurrently with the effectiveness of such combination, be proportionately increased.

g. Adjustments for Reclassification, Exchange and Substitution. Subject to Section 3 ("Liquidation Rights"), if the Common Stock issuable upon conversion of the Preferred Stock shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification or otherwise (other than a subdivision or combination of shares provided for above), then, in any such event, in lieu of the number of shares of Common Stock which the holders would otherwise have been entitled to receive each holder of such Preferred Stock shall have the right thereafter to convert such shares of Preferred Stock into a number of shares of such other class or classes of stock which a holder of the number of shares of Common Stock deliverable upon conversion of such series of Preferred Stock immediately before that change would have been entitled to receive in such reorganization or reclassification, all subject to further adjustment as provided herein with respect to such other shares.
h. Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price pursuant to this Section 4, the Corporation at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of Preferred Stock a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, upon the written request at any time of any holder of Preferred Stock, furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjustments and readjustments, (ii) the Conversion Price at the time in effect, and (iii) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the conversion of Preferred Stock.
i. Waiver of Adjustment of Conversion Price. Notwithstanding anything herein to the contrary, any downward adjustment of the Conversion Price of any series of Preferred Stock may be waived by the consent or vote of the holders of the majority of the outstanding shares of such series of Preferred Stock either before or after the issuance causing the adjustment. Any such waiver shall bind all future holders of shares of such series of Preferred Stock.
j. Notices of Record Date. In the event that this Corporation shall propose at any time:

i. to declare any Distribution upon its Common Stock, whether in cash, property, stock or other securities, whether or not a regular cash dividend and whether or not out of earnings or earned surplus;
ii. to affect any reclassification or recapitalization of its Common Stock outstanding involving a change in the Common Stock; or
iii. to voluntarily liquidate or dissolve or to enter into any transaction deemed to be a liquidation, dissolution or winding up of the Corporation pursuant to Section 3(d);

then, in connection with each such event, this Corporation shall send to the holders of the Preferred Stock prior written notice of the date on which a record shall be taken for such Distribution (and specifying the date on which the holders of Common Stock shall be entitled thereto and, if applicable, the amount and character of such Distribution) or for determining rights to vote in respect of the matters referred to in (ii) and (i) above.

Such written notice shall be given by first class mail (or express courier), postage prepaid, addressed to the holders of Preferred Stock at the address for each such holder as shown on the books of the Corporation and shall be deemed given on the date such notice is mailed.

The notice provisions set forth in this section may be shortened or waived prospectively or retrospectively by the consent or vote of the holders of a majority of the Preferred Stock, voting as a single class and on an as-converted basis.

k. Reservation of Stock Issuable Upon Conversion. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock solely for the purpose of effecting the conversion of the shares of the Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all then outstanding shares of the Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose.

# 5. Voting.

a. Restricted Class Voting. Except as otherwise expressly provided herein or as required by law, the holders of Preferred Stock and the holders of Common Stock shall vote together and not as separate classes.
b. No Series Voting. Other than as provided herein or required by law, there shall be no series voting.
c. Preferred Stock. Each holder of Preferred Stock shall be entitled to the number of votes equal to the number of shares of Common Stock into which the shares of

Preferred Stock held by such holder could be converted as of the record date. The holders of shares of the Preferred Stock shall be entitled to vote on all matters on which the Common Stock shall be entitled to vote. Holders of Preferred Stock shall be entitled to notice of any stockholders' meeting in accordance with the bylaws of the Corporation. Fractional votes shall not, however, be permitted and any fractional voting rights resulting from the above formula (after aggregating all shares into which shares of Preferred Stock held by each holder could be converted), shall be disregarded.

d. Adjustment in Authorized Common Stock. The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares of Common Stock then outstanding) by an affirmative vote of the holders of a majority of the capital stock of the Corporation.
e. Common Stock. Each holder of shares of Common Stock shall be entitled to one vote for each share thereof held.

6. Amendments and Changes. As long as at least fifty percent of the shares of Preferred Stock originally issued remain issued and outstanding, the Corporation shall not, without first obtaining the approval (by vote or written consent as provided by law) of the holders of more than fifty percent of the outstanding shares of the Preferred Stock:

a. amend, alter or repeal any provision of the Certificate of Incorporation or bylaws of the Corporation if such action would adversely alter the rights, preferences, privileges or powers of, or restrictions provided for the benefit of the Preferred Stock or any series thereof;
b. increase or decrease the authorized number of shares of Preferred Stock or any series thereof;
c. authorize or create (by reclassification or otherwise) any new class or series of shares having rights, preferences or privileges with respect to dividends, redemption or payments upon liquidation senior to the Preferred Stock;
d. approve any merger, sale of assets or other corporate reorganization or acquisition of the Corporation;
e. approve the purchase, redemption or other acquisition of any Common Stock, other than repurchases pursuant to stock restriction agreements approved by the Board of Directors upon termination of a consultant, director or employee;
f. declare or pay any dividend or distribution with respect to the Common Stock; or
g. the liquidation or dissolution of the Corporation.

7. Reissuance of Preferred Stock. In the event that any shares of Preferred Stock shall be converted pursuant to Section 4, redeemed, or otherwise repurchased by the Corporation, the shares so converted, redeemed or repurchased shall be cancelled and shall not be

issuable by this Corporation.

8. Notices. Any notice required by the provisions of this ARTICLE VI to be given to the holders of Preferred Stock, (i) if provided by regular United State mail, shall be deemed given if deposited in the United States mail, postage prepaid, and addressed to each holder of record at such holder's address appearing on the books of the Corporation, and (ii) if provided by electronic mail, shall be deemed given if sent on an available electronic mail service addressed to each holder of record at such holder's email address appearing on the books of the Corporation, on the date sent if sent before 5:00 p.m. on that day.

# ARTICLE VII

The Corporation is to have perpetual existence.

# ARTICLE VIII

Elections of directors need not be by written ballot unless the bylaws of the Corporation shall so provide.

# ARTICLE IX

Unless otherwise set forth herein, the number of directors that constitute the Board of Directors of the Corporation shall be fixed by, or in the manner provided in, the bylaws of the Corporation.

# ARTICLE X

In furtherance and not in limitation of the powers conferred by statute, the Board of Directors of the Corporation is expressly authorized to adopt, amend or repeal the bylaws of the Corporation.

# ARTICLE XI

1. To the fullest extent permitted by the Delaware General Corporation Law as the same exists or as may hereafter be amended, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director. If the Delaware General Corporation Law is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended.
2. The Corporation shall have the power to indemnify, to the extent permitted by the Delaware General Corporation Law, as it presently exists or may hereafter be amended from time to time, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a "Proceeding") by reason of the fact that he or she is or was a director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans,

against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with any such Proceeding.

3. Neither any amendment nor repeal of this ARTICLE XI, nor the adoption of any provision of this Corporation's Certificate of Incorporation inconsistent with this ARTICLE XI, shall eliminate or reduce the effect of this ARTICLE XI, in respect of any matter occurring, or any action or proceeding accruing or arising or that, but for this ARTICLE XI, would accrue or arise, prior to such amendment, repeal or adoption of an inconsistent provision.

# ARTICLE XII

Meetings of stockholders may be held within or without the State of Delaware, as the bylaws may provide. The books of the Corporation may be kept (subject to any provision contained in the statutes) outside of the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the bylaws of the Corporation.

# ARTICLE XIII

To the extent permitted by law, the Corporation renounces any expectancy that a Covered Person (as defined herein) offer the Corporation an opportunity to participate in a Specified Opportunity (as defined herein) and waives any claim that the Specified Opportunity constitutes a corporate opportunity that should have been presented by the Covered Person to the Corporation; provided, however, that the Covered Person acts in good faith. A "Covered Person" is any member of the Board of Directors of the Corporation (who is not an employee of the Corporation or any of its subsidiaries) who is a partner, member or employee of a Fund (as defined herein). A "Specified Opportunity" is any transaction or other matter that is presented to the Covered Person in his or her capacity as a partner, member or employee of a Fund (and other than in connection with his or her service as a member of the Board of Directors of the Corporation) that may be an opportunity of interest for both the Corporation and the Fund. A "Fund" is an entity that is a holder of Preferred Stock and that is primarily in the business of investing in other entities, or an entity that manages such an entity.

# **Exhibit B**  
Recompose, PBC Stockholder Agreement

RECOMPOSE, PBC

STOCKHOLDER AGREEMENT

April 30, 2019

# TABLE OF CONTENTS

Page

# SECTION 1 SHARES AND HOLDERS SUBJECT TO AGREEMENT

1.1 Shares 1
1.2 Holders 1
1.3 Certain Definitions. 1

# SECTION 2 PREEMPTIVE RIGHTS

2.1 Right of First Refusal to Holders 2
2.2 New Securities 2
2.3 Notice 3
2.4 Non-Exercise of Preemptive Rights 3
2.5 Expiration of Preemptive Rights 3

# SECTION 3 INFORMATION AND INSPECTION RIGHTS

3.1 Basic Financial Information and Inspection Rights. 4
3.2 Confidentiality 4

# SECTION 4 RIGHT OF FIRST REFUSAL

4.1 General 4
4.2 Notice of Proposed Transfer 4
4.3 Exercise by the Company 4
4.4 Initial Exercise by the Holders. 5
4.5 Purchase Price 5
4.6 Closing; Payment 5

# SECTION 5 RIGHT OF CO-SALE

5.1 Exercise by Eligible Holder. 6
5.2 Closing; Consumption of the Co-Sale 6
5.3 Exclusion from Co-Sale Right 6
5.4 Multiple Series, Class or Type of Stock 6
5.5 Seller's Right to Transfer 6

# SECTION 6 ELECTION OF DIRECTORS

6.1 Voting 7
6.2 Current Board Designees 7
6.3 Changes in Board Designees 7
6.4 Size of the Board of Directors. 7
6.5 Chairperson; Designating Officers; Reimbursement 7
6.6 No Liability for Election of Recommended Director 7

# SECTION 7 CONDITIONS TO TRANSFERS

7.1 Agreement Applies to Transferee 7
7.2 Condition to Transfer; Waiver 8
7.3 Restrictive Legend 8

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# SECTION 8 MISCELLANEOUS

8.1 Termination 8
8.2 Notices 8
8.3 Successors and Assigns 8
8.4 Governing Law 9
8.5 Titles and Subtitles 9
8.6 Further Assurances 9
8.7 Entire Agreement 9
8.8 No Grant of Proxy 9
8.9 Specific Performance 9
8.10 Amendment 9
8.11 No Waiver 9
8.12 Jurisdiction and Venue 9
8.13 Attorney's Fees 9
8.14 Severability 9
8.15 Counterparts 9
8.16 Jury Trial 10
8.17 Consent of Spouse 10

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# RECOMPOSE, PBC

# STOCKHOLDER AGREEMENT

This Stockholder Agreement (this "Agreement") is made as of April 30, 2019 by and among Recompose, PBC, a Delaware public benefit corporation (the "Company"), and the persons listed on Schedule I attached hereto, as updated from time to time (each a "Holder," and collectively the "Holders").

# SECTION 1

# SHARES AND HOLDERS SUBJECT TO AGREEMENT

1.1 Shares. During the term of this Agreement, each of the Holders agrees to vote all shares of the Company's capital stock held by them, whether beneficially or otherwise (collectively, the "Shares") in accordance with the provisions of this Agreement. In the event that subsequent to the date of this Agreement any shares or other securities (other than pursuant to a Change of Control Transaction) are issued on, or in exchange for, any of the Shares by reason of any stock dividend, stock split, consolidation of shares, reclassification or consolidation involving the Company, such shares or securities shall be deemed to be Shares for purposes of this Agreement.

1.2 Holders. The Company agrees to use commercially reasonable efforts to have any person acquiring Shares after the date of this Agreement execute (together with such person's spouse, if applicable) an Adoption Agreement in the form attached hereto as Exhibit A.

# 1.3 Certain Definitions.

(a) "Board of Directors" means the Board of Directors of the Company.

(b) "Change of Control Transaction" means either: (a) the acquisition of the Company by another entity by means of any transaction or series of related transactions to which the Company is party (including, without limitation, any stock acquisition, reorganization, merger or consolidation, but excluding any sale of stock for capital raising purposes) that results in the voting securities of the Company outstanding immediately prior thereto failing to represent immediately after such transaction or series of transactions (either by remaining outstanding or by being converted into voting securities of the surviving entity or the entity that controls such surviving entity) a majority of the total voting power represented by the outstanding voting securities of the Company, such surviving entity or the entity that controls such surviving entity; or (b) a sale, lease or other conveyance of all or substantially all of the assets of the Company.

(c) "Common Stock" means the common stock of the Company.

(d) "Convertible Securities" means all then outstanding options, warrants, rights, convertible notes, preferred stock or other securities of the Company directly or indirectly convertible into or exercisable for shares of capital stock, of any class or series.

(e) Shares "held" by a Holder shall mean any Shares directly or indirectly owned (of record or beneficially) by such Holder or as to which such Holder has voting power.

(f) "Initial Public Offering" means a firmly underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, covering the offer and sale of

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Common Stock in which the gross cash proceeds to the Company (before underwriting discounts, commissions and fees) are at least $35,000,000.

(g) "Preferred Stock" means the preferred stock of the Company.
(h) "Seller" means any Holder proposing to Transfer Shares of Common Stock.

(i) "Transfer," "Transferring," "Transferred," and words of similar import, whether capitalized or not, mean and include any sale, assignment, encumbrance, hypothecation, pledge, conveyance in trust, gift, transfer by bequest, devise or descent, or other transfer or disposition of any kind, including but not limited to transfers to receivers, levying creditors, trustees or receivers in bankruptcy proceedings or general assignees for the benefit of creditors, whether voluntary or by operation of law, directly or indirectly, except the following (each, a "Permitted Transfer"):

(i) A transfer by a Holder of ten percent (10%) or less of the Shares held by such Holder (calculated as of the date of this Agreement and as may be adjusted from time to time for stock splits, dividends, combinations, subdivisions, recapitalizations and the like);
(ii) Any transfers of Shares by a Holder to the Holder's spouse, ex-spouse, domestic partner, lineal descendant or antecedent, brother or sister, the adopted child or adopted grandchild, or the spouse or domestic partner of any child, adopted child, grandchild or adopted grandchild of the Member, or to a trust or trusts for the exclusive benefit of the Holder or those members of the Holder's family specified in the preceding clause or transfers of Shares by a Member by devise or descent; provided that, in all cases, the transferee or other recipient executes a joinder to this Agreement and becomes bound hereby; and
(iii) Any repurchase of Shares by the Company pursuant to agreements under which the Company has the option to repurchase such Shares upon the occurrence of certain events, such as termination of employment, in connection with exercise by the Company of any rights of first refusal.

(j) "Vote" shall mean any exercise of voting rights with respect to any of the Shares, whether at an annual or special meeting or by written consent or in any other manner permitted by applicable law.

# SECTION 2

# PREEMPTIVE RIGHTS

2.1 Right of First Refusal to Holders. The Company hereby grants to each Holder the right of first refusal to purchase its pro rata share of New Securities (as defined in Section 2.2) which the Company may, from time to time, propose to sell and issue after the date of this Agreement (the "Preemptive Right"). A Holder's pro rata share, for purposes of this Preemptive Right, is equal to the ratio of (a) the number of Shares owned by such Holder immediately prior to the issuance of New Securities (assuming full conversion of all outstanding convertible securities, rights, options and warrants held by said Holder) to (b) the total number of equity securities outstanding immediately prior to the issuance of New Securities (assuming full conversion or exercise of all outstanding Convertible Securities).
2.2 New Securities. "New Securities" shall mean any equity securities of the Company whether now authorized or not, and Convertible Securities; provided that the term "New Securities" does not include:

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(a) securities issued or issuable to officers, employees, directors, consultants, placement agents, and other service providers of the Company (or any subsidiary) pursuant to equity grants, option plans, purchase plans, agreements, or other employee equity incentive programs or arrangements of the Company;
(b) securities offered pursuant to an Initial Public Offering, pursuant to a registration statement filed under the Securities Act;
(c) securities issued or issuable pursuant to the acquisition of another company by the Company by merger, purchase of substantially all of the assets or other reorganization or to a joint venture agreement of the Company;
(d) securities issued or issuable to banks, equipment lessors or other financial institutions pursuant to a commercial leasing or debt financing transaction of the Company;
(e) securities issued or issuable in connection with sponsored research, collaboration, technology license, development, OEM, marketing or other similar agreements or strategic partnerships;
(f) securities issued to suppliers or third party service providers in connection with the provision of goods or services pursuant to transactions;
(g) securities of the Company which are otherwise excluded by the affirmative vote or consent of the holders of a majority of the Common Stock and the majority of the Preferred Stock (voting as separate classes) then outstanding; and
(h) any right, option or warrant to acquire any security convertible into the securities excluded from the definition of New Securities pursuant to subsections (a) through (g) above.

2.3 Notice. In the event the Company proposes to undertake an issuance of New Securities, it shall give each Holder written notice of its intention, describing the type of New Securities, and their price and the general terms upon which the Company proposes to issue the same. Each Holder shall have ten (10) days after any such notice is mailed or delivered to agree to purchase such Holder's pro rata share of such New Securities and to indicate whether such Holder desires to exercise its over-allotment option for the price and upon the terms specified in the notice by giving written notice to the Company, and stating therein the quantity of New Securities to be purchased.

2.4 Non-Exercise of Preemptive Rights. In the event the Holders fail to exercise fully the Preemptive Right and over-allotment rights, if any, within said ten (10) day period (the "Election Period"), the Company shall have ninety (90) days thereafter to sell or enter into an agreement (pursuant to which the sale of New Securities covered thereby shall be closed, if at all, within ninety (90) days from the date of said agreement) to sell that portion of the New Securities with respect to which the Holder's Preemptive Right set forth in this Section 2 was not exercised, at a price and upon terms no more favorable to the purchasers thereof than specified in the Company's notice to Holders delivered pursuant to Section 2.3. In the event the Company has not sold all of such New Securities within such ninety (90) day period following the Election Period, or such ninety (90) day period following the date of said agreement, the Company shall not thereafter issue or sell any New Securities without first again offering such securities to the Holders in the manner provided in this Section 2.

2.5 Expiration of Preemptive Rights. This right of first refusal granted under this Agreement shall expire upon, and shall not be applicable to, the closing of the Initial Public Offering.

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# SECTION 3

# INFORMATION AND INSPECTION RIGHTS

3.1 Basic Financial Information and Inspection Rights. For so long as any shares of Preferred Stock remain outstanding, the Company shall furnish the Holders of Preferred Stock with: (i) audited annual financial statements within 120 days following year-end; (ii) unaudited quarterly financial statements within 45 days following quarter-end; and (iii) annual business plans. The Company shall permit each Holder of Preferred Stock, at such Holder's own expense, to visit and inspect the Company's properties, examine its books of account and records, and discuss the Company's affairs, finances, and accounts with its officers, during normal business hours of the Company as may reasonably be requested by such Holder. All rights granted pursuant to this Section 3.1 shall terminated upon an Initial Public Offering.

3.2 Confidentiality. The Company shall not be required to comply with any information rights of Section 3.1 in respect of the Holder of any Preferred Stock whom the Company reasonably determines to be a competitor or an officer, employee, director or equity holder of a competitor of the Company. Each Holder of Preferred Stock acknowledges and agrees that the information received by them pursuant to this Section 3 may be confidential and shall be for its use only, and it will not use such confidential information or reproduce, disclose or disseminate such information to any other person (other than its employees or agents having a need to know the contents of such information, and its attorneys), except in connection with the exercise of rights under this Agreement, unless the Company has made such information available to the public generally.

# SECTION 4

# RIGHT OF FIRST REFUSAL

4.1 General. Before a Seller may Transfer any shares of Common Stock, Seller must comply with the provisions of this Section 4. Each Holder hereby represents and warrants to the Company and the other Holders that he, she or it is the sole legal and beneficial owner of his, her or its shares of Common Stock and, subject to any restrictions imposed under the Company's certificate of incorporation or bylaws, that no other person or entity has any interest (other than a community property interest) in such shares of Common Stock.

4.2 Notice of Proposed Transfer. Prior to any Seller Transferring any of his, her or its shares of Common Stock, Seller shall deliver to the Company and each Holder a written notice (the "Transfer Notice") in substantially the form attached hereto as Exhibit B, stating: (i) Seller's bona fide intention to Transfer such shares of Common Stock; (ii) the name, address and phone number of each proposed purchaser or other transferee (each, a "Proposed Transferee"); (iii) the aggregate number of shares of Common Stock proposed to be Transferred to each Proposed Transferee (the "Offered Shares"); (iv) the bona fide cash price or, in reasonable detail, other consideration for which Seller proposes to Transfer the Offered Shares (the "Offered Price"); and (v) the Company and each Holder's right to exercise its Rights of First Refusal with respect to the Offered Shares.

# 4.3 Exercise by the Company.

(a) For a period of twenty (20) days (the "Initial Exercise Period") after the last date on which the Transfer Notice is, pursuant to Section 4.2, deemed to have been delivered to the Company and the

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Holders, the Company shall have the right to purchase all or any part of the Offered Shares on the terms and conditions set forth in this Section 4 (in addition to the rights of the Holders in this Section 4, the "Rights of First Refusal"). In order to exercise its right hereunder, the Company must deliver written notice to Seller within the Initial Exercise Period. In the event that the Company's Board of Directors determines, in its sole discretion, that the Company is prohibited by law or by contract from exercising the Company's Rights of First Refusal, the Company may specify another person or entity who shall not be a current shareholder of the Company and who shall be unanimously approved by the Board of Directors, excluding any board member who is also a Seller, as its designee to purchase such Offered Shares.

(b) Upon the earlier to occur of (i) the expiration of the Initial Exercise Period or (ii) the time when Seller has received written confirmation from the Company regarding its exercise of its Rights of First Refusal, the Company shall be deemed to have made its election with respect to the Offered Shares, and the shares for which a Holder may exercise his, her, or its Rights of First Refusal (as described below) shall be correspondingly reduced, if appropriate.

### 4.4 Initial Exercise by the Holders.

(a) Subject to the limitations of this Section 4.4, during the Initial Exercise Period, the Holders shall have the right to elect to purchase, in the aggregate, all or any part of the Offered Shares not purchased by the Company pursuant to Section 4.3 (the "Remaining Shares") on the terms and conditions set forth in the Transfer Notice. In order to exercise their rights hereunder, such Holder(s) must provide written notice delivered to Seller within the Initial Exercise Period. In the event more than one Holder elects to exercise such right, each Holder shall have the right to purchase a number of Offered Shares equal to the product of (A) the total number of Offered Shares not otherwise purchased by the Company, multiplied by (B) a fraction the numerator of which is the number of Shares held by such Holder and the denominator of which is the number of Shares held by all of the Holders providing notice of their intent to purchase Offered Shares within the Initial Exercise Period.

(b) Within five (5) days after the expiration of the Initial Exercise Period, Seller will give written notice to the Company and the Holder(s) specifying the number of Offered Shares to be purchased by the Company and the Holder(s) exercising their Right of First Refusal (the "ROFR Confirmation Notice").

### 4.5 Purchase Price. The purchase price for the Offered Shares to be purchased by the Company or by the Holder(s) exercising his, her, or its Rights of First Refusal under this Agreement will be the Offered Price, and will be payable as set forth in Section 4.6. If the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash consideration will be determined by the Board of Directors of the Company in good faith, which determination will be binding upon the Company, the Holder(s) and Seller, absent fraud or error.

### 4.6 Closing; Payment. Subject to compliance with applicable state and federal securities laws, the Company and the Holder(s) exercising their Rights of First Refusal shall effect the purchase of all or any portion of the Offered Shares, including the payment of the purchase price, within ten (10) days after the delivery of the ROFR Confirmation Notice (the "Right of First Refusal Closing"). Payment of the purchase price will be made, at the option of the party exercising its Rights of First Refusal, (i) in cash (by check), (ii) by wire transfer or (iii) by cancellation of all or a portion of any outstanding indebtedness of Seller to the Company or the Holder, as the case may be, or (iv) by any combination of the foregoing. At such Right of First Refusal Closing, Seller shall deliver to each of the Company and the Holder(s) exercising their Rights of First Refusal, one or more certificates, properly endorsed for transfer, representing such Offered Shares so purchased.

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# SECTION 5

# RIGHT OF CO-SALE

# 5.1 Exercise by Eligible Holder.

(a) Subject to the limitations of this Section 5.1, to the extent that the Company and any Holder do not exercise their respective Rights of First Refusal with respect to all or any part of the Offered Shares or the Remaining Shares, as applicable, pursuant to Section 4, then, any Holder who has not exercised their Right of First Refusal (the "Co-Sale Eligible Holder") shall have the right to participate in such sale of the Offered Shares which are not being purchased by the Company or any Holder pursuant to their respective Rights of First Refusal ("Residual Shares"), on the same terms and conditions as specified in the Transfer Notice, to the extent described in Section 4.2 (the "Rights of Co-Sale"). To exercise their rights hereunder, a Co-Sale Eligible Holder (each, a "Selling Holder") must have provided a written notice to Seller within the Initial Exercise Period indicating the number of shares it holds that it wishes to sell pursuant to this Section 5.1.

(b) Each Selling Holder will be entitled to sell up to its pro rata share of the Residual Shares, which shall be equal to the product obtained by multiplying (x) the number of Residual Shares by (y) a fraction, (i) the numerator of which shall be the number of shares of Common Stock (assuming conversion of all Convertible Securities into Common Stock) held on the date of the Transfer Notice by such Selling Holder and (ii) the denominator of which shall be the number of shares of Common Stock (assuming conversion of all Convertible Securities into Common Stock) held on the date of the Transfer Notice by Seller and all Selling Holders ("Pro Rata Co-Sale Share").

(c) Within ten (10) days after the expiration of the Initial Exercise Period, Seller will give written notice to the Company and each Selling Holder specifying the number of Residual Shares to be sold by such Selling Holder exercising its Right of Co-Sale (the "Co-Sale Confirmation Notice").

(d)

5.2 Closing; Consummation of the Co-Sale. Subject to compliance with applicable state and federal securities laws, the sale of the Residual Shares by each Selling Holder shall occur within ten (10) days after delivery of the Co-Sale Confirmation Notice (the "Co-Sale Closing"). If a Selling Holder exercised the Right of Co-Sale in accordance with this Section 5.2, then such Selling Holder shall deliver to Seller at or before the Co-Sale Closing, one or more certificates, properly endorsed for Transfer, representing the number of Residual Shares to which the Selling Holder is entitled to sell pursuant to this Section 5.2. At the Co-Sale Closing, Seller shall cause such certificates or other instruments to be Transferred and delivered to the Transferee pursuant to the terms and conditions specified in the Transfer Notice, and Seller will remit, or will cause to be remitted, to the Selling Holder, at the Co-Sale Closing, that portion of the proceeds of the Transfer to which the Selling Holder is entitled by reason of such Selling Holder's participation in such Transfer pursuant to the Right of Co-Sale.

5.3 Exclusion from Co-Sale Right. For purposes of clarity, the Rights of Co-Sale shall not apply with respect to Common Stock sold or to be sold to any Selling Holder or the Company pursuant to the Right of First Refusal as set forth in Section 4.

5.4 Multiple Series, Class or Type of Stock. If the Offered Shares consist of more than one series, class or type of security, Seller has the right to Transfer hereunder each such series, class or type.

5.5 Seller's Right to Transfer. If any of the Offered Shares remain available after the exercise of all Rights of First Refusal and all Rights of Co-Sale, then the Seller shall be free to Transfer any such

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remaining shares to the Proposed Transferee at the Offered Price or a higher price in accordance with the terms set forth in the Transfer Notice; provided, however, that if the Offered Shares are not so Transferred during the ninety (90) day period following the deemed delivery of the Transfer Notice, then Seller may not Transfer any of such remaining Offered Shares without complying again in full with the provisions of this Agreement.

# SECTION 6

# ELECTION OF DIRECTORS

6.1 Voting. During the term of this Agreement, each Holder agrees to vote all Shares in such manner as may be necessary to elect (and maintain in office) those individuals designated by Katrina Spade from time to time (the "Board Designees") as the sole members of the Company's Board of Directors.
6.2 Current Board Designees. For purposes of this Agreement, the initial Board Designees shall be Katrina Spade, Leslie Christian, and Sara Moorehead.
6.3 Changes in Board Designees. From time to time during the term of this Agreement, Katrina Spade may, in her sole discretion:

(a) notify the Company in writing of an intention to remove from the Company's board of directors any incumbent Board Designee; or
(b) notify the Company in writing of an intention to select a new Board Designee for election to a board seat (whether to replace a prior Board Designee or to fill a vacancy in such board seat). In the event of such an initiation of a removal or selection of a Board Designee under this Section, the Company shall take such reasonable actions as are necessary to facilitate such removals or elections, including, without limitation, soliciting the votes of the appropriate stockholders, and the Holders shall vote their shares to cause: (a) the removal from the Company's Board of Directors of the Board Designee or Board Designees so designated for removal; and (b) the election to the Company's board of directors of any new Board Designee or Board Designees so designated.
6.4 Size of the Board of Directors. During the term of this Agreement, each Holder agrees to vote all Shares to maintain the authorized number of members of the Board of Directors of the Company at three (3) directors.
6.5 Chairperson; Designating Officers; Reimbursement. The chairperson of the Board of Directors, if any, shall be designated by the majority vote of the directors. A majority of the Board of Directors shall be authorized to designate the officers of the Company. All directors shall be entitled to be reimbursed by the Company for their respective reasonable out-of-pocket costs and expenses incurred in the course of their services as such, including travel expenses.
6.6 No Liability for Election of Recommended Director. None of the Holders and no officer, director, stockholder, partner, employee or agent of any Holder makes any representation or warranty as to the fitness or competence of the nominee of any Holder hereunder to serve on the board of directors by virtue of such Holder's execution of this Agreement or by the act of such Holder in voting for such nominee pursuant to this Agreement.

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# SECTION 7

# CONDITIONS TO TRANSFERS

7.1 Agreement Applies to Transferee. Any transferee of Shares shall be required to become a party to this Agreement, by executing (together with such party's spouse, if applicable) an Adoption Agreement in the form attached hereto as Exhibit A. If any party acquires Shares from a Holder, notwithstanding such Person's failure to execute an Adoption Agreement in accordance with the preceding sentence (whether such transfer resulted by operation of law or otherwise), such party and such Shares shall be subject to this Agreement as if such Shares were still held by the transferor.

7.2 Condition to Transfer; Waiver. No Shares may be transferred by a Holder unless the transferee first delivers to the Company, at such Holder's sole cost and expense, evidence reasonably satisfactory to the Company (such as an opinion of counsel) to the effect that such transfer is not required to be registered under the Securities Act of 1933, as amended.

7.3 Restrictive Legend. Each certificate representing any of the Shares subject to this Agreement shall be marked by the Company with a legend reading substantially as follows:

"THE SHARES EVIDENCED HEREBY ARE SUBJECT TO AND MAY ONLY BE SOLD, DISPOSED OF OR OTHERWISE TRANSFERRED IN COMPLIANCE WITH CERTAIN VOTING REQUIREMENTS, RIGHTS OF FIRST REFUSAL, AND RIGHTS OF CO-SALE AS SET FORTH IN THAT CERTAIN STOCKHOLDER AGREEMENT AMONG THE ISSUER OF THESE SHARES AND CERTAIN OF ITS STOCKHOLDERS, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE ISSUER OF THE SHARES."

# SECTION 8

# MISCELLANEOUS

8.1 Termination. This Agreement shall terminate upon the earlier of: (i) a Change of Control Transaction, (ii) an Initial Public Offering or (iii) the agreement of the Holders of at least a majority of all outstanding Common Stock and a majority of all outstanding Preferred Stock (voting as separate classes).

8.2 Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by registered or certified mail, postage prepaid, sent by facsimile or electronic mail (if to a Holder) or otherwise delivered by hand, messenger or courier service addressed:

(a) if to a Holder, to the Holder's address, facsimile number or electronic mail address as shown in the exhibits to this Agreement or in the Company's records, as may be updated in accordance with the provisions hereof, or, until any such Holder so furnishes an address, facsimile number or electronic mail address to the Company, then to the address, facsimile number or electronic mail address of the last holder of the relevant Shares for which the Company has contact information in its records; or

(b) if to the Company, to the attention of the President of the Company at 202 13th Avenue East, Seattle, Washington 98102, or at such other address as the Company shall have furnished to the Holders, with a copy to Michael W. Moyer, Baker & Hostetler LLP, 999 Third Avenue, Suite 3600, Seattle, Washington 98104. Each such notice or other communication shall for all purposes of this Agreement be treated as effective or having been given (i) if delivered by hand, messenger or courier service, when delivered, or (ii) if sent by mail, at the earlier of its receipt or 72 hours after the same has been deposited in a

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regularly maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid, or (iii) if sent by facsimile, upon confirmation of facsimile transfer or, if sent by electronic mail, upon confirmation of delivery when directed to the relevant electronic mail address. In the event of any conflict between the Company's books and records and this Agreement or any notice delivered hereunder, the Company's books and records will control absent fraud or error.

8.3 Successors and Assigns. The provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties. The Company shall not permit the transfer of any Shares on its books or issue a new certificate representing any Shares unless and until the person to whom such security is to be transferred shall have executed a written agreement pursuant to which such person becomes a party to this Agreement and agrees to be bound by all the provisions hereof as if such person was a Holder hereunder.

8.4 Governing Law. This Agreement shall be governed in all respects by the internal laws of the State of Washington as applied to agreements entered into among Washington residents to be performed entirely within Washington, without regard to principles of conflicts of law.

8.5 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. All references in this Agreement to sections, paragraphs and exhibits shall, unless otherwise provided, refer to sections and paragraphs hereof and exhibits attached hereto.

8.6 Further Assurances. Each party agrees to execute and deliver, by the proper exercise of its corporate, limited liability company, partnership or other powers, all such other and additional instruments and documents and do all such other acts and things as may be necessary to more fully effectuate this Agreement.

8.7 Entire Agreement. This Agreement and the exhibits hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof. No party shall be liable or bound to any other party in any manner with regard to the subjects hereof or thereof by any warranties, representations or covenants except as specifically set forth herein.

8.8 No Grant of Proxy. This Agreement does not grant any proxy and should not be interpreted as doing so. Nevertheless, should the provisions of this Agreement be construed to constitute the granting of proxies, such proxies shall be deemed coupled with an interest and are irrevocable for the term of this Agreement.

8.9 Specific Performance. It is agreed and understood that monetary damages would not adequately compensate an injured party for the breach of this Agreement by any party, that this Agreement shall be specifically enforceable, and that any breach or threatened breach of this Agreement shall be the proper subject of a temporary or permanent injunction or restraining order. Further, each party waives any claim or defense that there is an adequate remedy at law for such breach or threatened breach.

8.10 Amendment. Except as expressly provided herein, neither this Agreement nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument referencing this Agreement and signed by (i) the Company and (ii) Holders representing a majority of the Common Stock issued or issuable upon conversion of the then-outstanding Preferred Stock (voting together as a single class); provided that; updating Schedule I to include any Holder(s) who has executed an Adoption Agreement shall not be deemed to be an amendment.

-9-

8.11 No Waiver. The failure or delay by a party to enforce any provision of this Agreement will not in any way be construed as a waiver of any such provision or prevent that party from thereafter enforcing any other provision of this Agreement. The rights granted both parties hereunder are cumulative and will not constitute a waiver of either party's right to assert any other legal remedy available to it.

8.12 Jurisdiction and Venue. With respect to any disputes arising out of or related to this Agreement, the parties consent to the exclusive jurisdiction of, and venue in, the state courts in King County, Washington (or in the event of exclusive federal jurisdiction, the courts of the United States District Court Western District of Washington).

8.13 Attorney's Fees. In the event that any suit or action is instituted to enforce any provision in this Agreement, the prevailing party in such dispute shall be entitled to recover from the losing party all fees, costs and expenses of enforcing any right of such prevailing party under or with respect to this Agreement, including without limitation, such reasonable fees and expenses of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses of appeals.

8.14 Severability. If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Agreement, and such court will replace such illegal, void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the same economic, business and other purposes of the illegal, void or unenforceable provision. The balance of this Agreement shall be enforceable in accordance with its terms.

8.15 Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same agreement. Facsimile copies of signed signature pages will be deemed binding originals.

8.16 Jury Trial. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING (WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATED TO THIS AGREEMENT.

8.17 Consent of Spouse. If any Holder is married on the date of this Agreement, such Holder's spouse shall execute and deliver a consent of spouse on the signature page hereto ("Consent of Spouse"), effective on the date hereof. Notwithstanding the execution and delivery thereof, such consent shall not be deemed to confer or convey to the spouse any rights in such Holder's Shares that do not otherwise exist by operation of law or the agreement of the parties. If any Holder should marry or remarry subsequent to the date of this Agreement, such Holder shall within thirty (30) days thereafter obtain his/her new spouse's acknowledgement of and consent to the existence and binding effect of all restrictions contained in this Agreement by causing such spouse to execute and deliver a Consent of Spouse acknowledging the restrictions and obligations contained in this Agreement and agreeing and consenting to the same.

(signature pages follow)

-10-

The parties are signing this Stockholder Agreement as of the date stated in the introductory clause.

**RECOMPOSE, PBC,**

a Delaware public benefit corporation

By: ________________________________

Name: ________________________________

Title: ________________________________

The parties are signing this Stockholder Agreement as of the date stated in the introductory clause.

# HOLDER:

(Print Holder name)

(Signature)

(Print name of signatory, if signing for an entity)

(Print title of signatory, if signing for an entity)

I, _______________, spouse of the Holder indicated above, acknowledge that I have read this Stockholder Agreement and am knowledgeable of its contents. I am aware that the Stockholder Agreement contains provisions regarding the voting and transfer of shares of capital stock of the Company that my spouse may own, including any interest I might have therein. I hereby agree that my interest, if any, in any shares of capital stock of the Company subject to the Stockholder Agreement shall be irrevocably bound by the Stockholder Agreement and further understand and agree that any community property interest I may have in such shares of capital stock of the Company shall be similarly bound by the Stockholder Agreement. I am aware that the legal, financial and related matters contained in the Stockholder Agreement are complex and that I am free to seek independent professional guidance or counsel with respect to this Stockholder Agreement. I have either sought such guidance or counsel or determined after reviewing the Stockholder Agreement carefully that I will waive such right.

# SPOUSE:

(Print Spouse name)

(Signature)

(Date)

# SCHEDULE I

## HOLDERS

Updated __________, ____

| Name of Holder | Series A-1 Preferred Stock | Series A-2 Preferred Stock | Series A-3 Preferred Stock | Common Stock |
| --- | --- | --- | --- | --- |
| Total |  |  |  |  |

-1-

# EXHIBIT A TO STOCKHOLDER AGREEMENT

# Adoption Agreement

This Adoption Agreement (this "Adoption Agreement") is executed as of __________, 20__, pursuant to the terms of that certain Stockholder Agreement, dated as of April 30, 2019, among Recompose, PBC (the "Company" and its stockholders), and the Schedules and Exhibits thereto, as amended or restated from time to time, a copy of which is attached hereto (the "Agreement"), by the transferee ("Transferee") executing this Adoption Agreement. By the execution of this Adoption Agreement, the Transferee agrees as follows:

1. Acknowledgment. Transferee acknowledges that Transferee is acquiring [ ] shares of the Company's capital stock (the "Shares") subject to the terms and conditions of the Agreement. Capitalized terms used herein without definition are defined in the Agreement and are used herein with the same meanings set forth therein.
2. Agreement. Transferee (a) agrees that the Shares acquired by Transferee shall be bound by and subject to the terms of the Agreement as "Shares" and (b) hereby joins in, and agrees to be bound by, the Agreement (including the Exhibits) with the same force and effect as if the Transferee were originally a party thereto.
3. Notice. Any notice required by the Agreement shall be given to Transferee at the address listed beside Transferee's signature below.
4. Joinder. The spouse of the undersigned Transferee, if applicable, executes this Adoption Agreement to acknowledge its fairness and that it is in such spouse's best interests, and to bind such spouse's community interest, if any, in the Shares to the terms of the Agreement.

# TRANSFEREE:

By: __________________________

Information for Notices:

Email Address: __________________________

# SPOUSE OF TRANSFEREE:

By:__________________________

-1-

# EXHIBIT B TO STOCKHOLDER AGREEMENT

# FORM OF
NOTICE OF SHARE TRANSFER

# Notice of Transfer

I intend to transfer shares of Recompose, PBC's (the "Company") capital stock as indicated below (the "Offered Shares").

# Notice of Rights

Pursuant to that certain Stockholder Agreement, dated as of April ___, 2019 (the "Agreement"), I write to inform you of your Right of First Refusal (each as defined in the Agreement) with respect to the Offered Shares. If you choose to do so, you may exercise these rights with respect to the Offered Shares by returning this notice to me, at the address below, with a copy to the Company. If you decline your right to do so, you do not need to return anything. Your failure to return this notice on a timely basis will indicate that you have declined to exercise your Right of First Refusal with respect to the Offered Shares.

# Election

I exercise my Right of First Refusal ☐
I wish to (circle one, not both) buy _______ shares of _______ stock.

# Description of Transfer

1. Type and aggregate number of shares to be transferred:
2. Type of transfer (please check one):

Sale
Other. Describe:

3. Proposed transferees:

| Name and address | Type, amount and price of shares |
| --- | --- |
| 1. [insert name of proposed transferee] [insert address of proposed transferee] [insert phone number of proposed transferee] | [enter amount, type and price of shares] |
| 2. [insert name of proposed transferee] [insert address of proposed transferee] [insert phone number of proposed transferee] | [enter amount, type and price of shares] |

4. Consideration:

Total cash consideration:
Total fair market value of non-cash consideration (if any) as of the date of the notice:
- Describe any non-cash consideration in reasonable detail:

[Specify applicable return dates for the notice]. There will be no extension of this deadline.

[Enter seller's name and address]

# EXHIBIT C

Recompose PBC Adoption Agreement

# ADOPTION AGREEMENT

This Adoption Agreement (this "Adoption Agreement") is executed as of [EFFECTIVE DATE] pursuant to the terms of that certain Stockholder Agreement dated as of April 30, 2019 among the stockholders of Recompose, PBC (the "Company"), including the Schedules and Exhibits thereto, as amended or restated from time to time, a copy of which is attached hereto (the "Stockholder Agreement"), by the undersigned purchaser of the capital stock of the Company ("Holder") executing this Adoption Agreement. By the execution of this Adoption Agreement, the Holder agrees as follows:

1. Acknowledgment. Holder acknowledges that Holder is acquiring[SHARES] shares of the Company's Series CF-1 Preferred Stock (collectively, the "Shares") subject to the terms and conditions of that certain Subscription Agreement among the Company, Holder and other investors in the Company of even date herewith. Capitalized terms used herein without definition are defined in the Stockholder Agreement and are used herein with the same meanings set forth therein.
2. Agreement. Holder (a) agrees that the Shares acquired by Holder shall be bound by and subject to the terms of the Stockholder Agreement as "Shares" and (b) hereby joins in, and agrees to be bound by, the Stockholder Agreement (including the Exhibits) with the same force and effect as if the Holder were originally a party thereto.
3. Notice. Any notice required by the Stockholder Agreement shall be given to Holder at the address listed beside Holder's signature below.
4. Joinder. The spouse of the undersigned Holder, if applicable, executes this Adoption Agreement to acknowledge its fairness and that it is in such spouse's best interests, and to bind such spouse's community interest, if any, in the Shares to the terms of the Agreement.

HOLDER:

NAME:

By: Investor Signature

SPOUSE OF HOLDER (if applicable):

NAME:

By:

**Attachment 4:** `document_4.pdf`

**Recompose I (THE "SPV")**,  
a series of Wefunder SPV, LLC, a Delaware limited  
liability company (the "LLC")

Subscription Agreement

**[INVESTMENT  
AMOUNT]**

**[INVESTMENT DATE]**

**Recompose I** (the "SPV"), a series of Wefunder SPV, LLC (the "LLC"), is a special purpose vehicle that will invest all of its assets in securities issued by **Recompose, PBC** (the "Company"). By making an investment in the SPV through the Wefunder website, I understand and agree to the representations set forth below.

I have reviewed the following information and documents in connection with this Subscription Agreement:

1. The information on the Wefunder website about the Company. I acknowledge that this information was prepared solely by either the Company or a third party whose work has been verified by the Company, and that none of Wefunder, Inc., Wefunder Portal, LLC, Wefunder Admin, LLC or Wefunder Advisors, LLC, nor any of their affiliates, employees or agents, are responsible for the adequacy, completeness, or accuracy of this information;
2. The Form C relating to this investment, which provides information about investment in the Company through the use of the SPV;
3. The Series Appendix, an appendix to the Wefunder SPV, LLC limited liability company agreement (the "LLC Agreement"), which sets forth certain specific terms of the SPV;
4. The Terms Appendix, which summarizes the terms of the Company securities to be purchased by the SPV;
5. The LLC Agreement, which sets forth other terms applicable to each SPV;
6. This Subscription Agreement, which sets forth the terms governing your investment in the SPV, and that sets forth certain representations you are making in connection with your investment in the SPV;
7. The Wefunder Investor Agreement; and
8. The Wefunder Terms of Service.

**By making an investment in the SPV through the Wefunder website, I agree to be bound by this Subscription Agreement and the terms of the other agreements listed above with respect to my investment in the SPV.**

# Subscription Agreement

# SCOPE OF AGREEMENT AND INVESTOR ELIGIBILITY
REPRESENTATIONS

A. This agreement ("Agreement") applies to each investment in a series ("SPV") of Wefunder SPV, LLC (the "LLC"). Each series is a separate pool of assets from every other series. Each SPV will invest all of its assets in securities issued by a single company ("Company") as set forth in the applicable series appendix ("Series Appendix") to the Wefunder SPV, LLC limited liability company agreement (LLC Agreement). The terms of the Company securities to be purchased by the SPV are summarized in an appendix ("Terms Appendix") attached to this Agreement.
B. Each SPV is formed by and operated by Wefunder Admin, LLC on behalf of the Company in whose securities that SPV invests.
C. Important information about the Company, about the related SPV, and more generally about investments through the Wefunder website, is available through the Wefunder website. The Investor should review that information, and all relevant Company Information (as defined below), carefully before making an investment in any SPV.
D. Each SPV will offer membership interests ("Interests") in that SPV pursuant to Regulation Crowdfunding under the U.S. Securities Act of 1933, as amended (the "Securities Act").
E. You hereby agree that each time you make an investment in any SPV, you will be deemed to have entered into this Agreement, and will be deemed to have made each representation and covenant contained in this Agreement.
F. Except as the context otherwise requires, any reference in this Subscription Agreement to:

1. a "SPV" shall mean "The LLC acting solely on behalf of and for the account of the SPV";
2. "Investor" and "you" shall mean a person (whether individually, jointly with another person, or through his or her individual retirement account) who has agreed to invest, or has invested, in any SPV; and
3. "Company Information" means:

a. The information on the Wefunder website about the Company. I acknowledge that this information was prepared solely by either the Company or a third party whose work has been verified by the Company, and that neither Wefunder, Inc., Wefunder Portal, LLC, Wefunder Admin, LLC or Wefunder Advisors, LLC (together, the "Wefunder entities," nor any of their affiliates, employees or agents, are responsible for the adequacy, completeness, or accuracy of this information;
b. The Form C relating to this investment, which provides information about investment in the Company through the use of the SPV;
c. The Series Appendix, an appendix to the Wefunder SPV, LLC limited liability company agreement (the "LLC Agreement"), which sets forth certain specific terms of the SPV;
d. The Terms Appendix, which summarizes the terms of the Company securities to be purchased by the SPV;
e. The LLC Agreement, which sets forth other terms applicable to each SPV;
f. This Subscription Agreement, which sets forth the terms governing your investment in the SPV, and that sets forth certain representations you are making in connection with your investment in the SPV;
g. The Wefunder Investor Agreement; and
h. The Wefunder Terms of Service.

INVESTOR'S REPRESENTATIONS AND COVENANTS

# 1. Investor's Review of Information and Investment Decision

1.1. The Investor has carefully read and understands the Company Information. The Investor acknowledges that it has made an independent decision to invest indirectly in the Company through the SPV and that, in making its decision to invest in a SPV, the Investor has relied solely upon the Company Information, any other relevant information on the Wefunder website, and independent investigations made by the Investor. The Investor understands that no representations or warranties have been made to the Investor by the LLC, the relevant SPV, any administrator appointed from time to time with respect to the SPV (the "Administrator"), any lead investor appointed from time to time with respect to the SPV (the "Lead Investor"), or any partner, member, officer, employee, agent, affiliate or subsidiary of any of them regarding the Company.

1.2. The Investor has been provided an opportunity to request additional information concerning the Company and the offering through the Ask A Question feature on wefunder.com.

1.3. The Investor understands and agrees that neither Wefunder, Inc., Wefunder Portal, LLC, Wefunder Admin, LLC, any of their affiliates, nor any director, manager, officer, shareholder, member, employee or agent of Wefunder, Inc., Wefunder Portal, LLC, Wefunder Admin, LLC or any of their affiliates (each, a "Wefunder Party," and collectively, "Wefunder Parties") shall be liable in connection with any information or omission of information contained in materials prepared or supplied by the Company. Such materials may include, but are not limited to, information provided by the Company in the Form C related to the offering, information available through the Wefunder website, and materials distributed to the Investor by the SPV on behalf of a Company.

1.4. The Investor represents and agrees that no Wefunder Party has recommended or suggested any investment in a SPV, or any investment related to a Company, to the Investor.

1.5. Investor understands that no Wefunder Party is an adviser to Investor, and that Investor is not an advisory or other client of any Wefunder Party.

1.6. The Investor is not relying on any Wefunder Party or any other person or entity with respect to the legal, accounting, business, investment, pension, tax or other economic considerations involved in this investment other than the Investor's own advisers that are not affiliated with any of the foregoing persons.

1.7. The Investor has such knowledge and experience in financial and business matters that the Investor is capable of evaluating the merits and risks of the Investor's investment in the SPV and is able to bear such risks. The Investor has obtained, in the Investor's judgment, sufficient information to evaluate the merits and risks of such investment. The Investor has evaluated the risks of investing in the SPV, understands there are substantial risks of loss incidental to the purchase of an Interest and has determined that the Interest is a suitable investment for the Investor and consistent with the general investment objectives of the Investor.

# 2. Investor's Representations Related To Investment in a SPV.

2.1. The Investor is acquiring the Interest for its own account, for investment purposes only and not with an intent to resell or distribute the Interest (or any distributions received from the SPV in whole or in part), and the Investor agrees that it will not sell or otherwise transfer the Interest unless in compliance with Regulation Crowdfunding and other applicable securities laws, and with the terms and conditions of this Agreement.
2.2. The Investor's investment in the Interest is consistent with the investment purposes, objectives and cash flow requirements of the Investor and will not adversely affect the Investor's overall need for diversification and liquidity.
2.3. The Investor has all requisite power, authority and capacity to acquire and hold the Interest and to execute, deliver and comply with the terms of each of the instruments required to be executed and delivered by the Investor in connection with the Investor's subscription for the Interest, including without limitation this Subscription Agreement, and such execution, delivery and compliance does not conflict with, or constitute a default under, any instruments governing the Investor, any law, regulation or order, or any agreement or other undertaking to which the Investor is a party or by which the Investor may be bound. If the Investor is an entity, the person executing and delivering each of such instruments on behalf of the Investor has all requisite power, authority and capacity to execute and deliver such instruments, and, upon request by the SPV, will furnish to the SPV a true and correct copy of any instruments governing the Investor, including all amendments thereto. The signature on each of such instruments is genuine and each of such instruments constitutes a legal, valid and binding obligation of the Investor enforceable against the Investor in accordance with its terms.
2.4. The Wefunder Parties are each hereby authorized and instructed to accept and execute any instructions in respect of the Interest given by the Investor in written or electronic form. The Wefunder Parties may rely conclusively upon and shall incur no liability in respect of any action take upon any notice, consent, request, instructions or other instrument believed in good faith to be genuine or to be signed by properly authorized persons of the Investor.
2.5. Pursuant to the requirements of Treas. Reg. § 301.6109-1(c), the Investor has provided, or agrees to provide upon the earlier of (i) two years of an acquisition of an Interest or (ii) twenty (20) days before any distribution is to be made from the SPV, his, her or its taxpayer identification number (e.g., social security number or employer identification number) under penalties of perjury and has or will attest that the Internal Revenue Service has not notified the Investor that he, she or it is subject to backup withholding.

# 3. The Manager Has The Right To Reject Any Subscription, In Whole Or In Part.

3.1. The Investor understands that the SPV will not register as an investment company under the U.S. Investment Company Act of 1940, as amended (the "Investment Company Act"), nor will it make a public offering of its securities within the United States.
3.2. The Investor understands that the value of all investments in any SPV made through individual retirement accounts ("IRAs") must be less than \(25\%\) of the value of the SPV's assets.

3.3. If the Investor is investing in a SPV through an employee benefit plan of any kind, including an individual retirement account (the "Plan"), and an individual or entity (the "Fiduciary") has entered into this Agreement on behalf of the Plan, the Fiduciary hereby makes the following representations, warranties, and covenants:

i. The Fiduciary is a fiduciary of the Plan who is authorized to invest Plan assets or is acting at the direction of a Plan fiduciary authorized to invest Plan assets. The Fiduciary has determined that an investment in the Fund is consistent with the Fiduciary's responsibilities to the Plan under Employee Retirement Income Security Act of 1974, as amended ("ERISA") or other applicable law, and is qualified to make such investment decision. The Fiduciary is authorized to make all representations, covenants and agreements set forth in this Agreement about and on behalf of the Investor, and the Fiduciary hereby agrees that, except for the representations, covenants and agreements contained in this section 3.3, all representations, covenants and agreements contained in this Agreement are made on behalf of the Investor who is investing through the Plan.

ii. The execution and delivery of this Subscription Agreement, and the investment contemplated hereby has been duly authorized by all appropriate and necessary parties pursuant to the provisions of the instrument or instruments governing the Plan and any related trust; and (B) will not violate, and is not otherwise inconsistent with, the terms of such instrument or instruments.

iii. The Fiduciary acknowledges that the assets of the Fund will be invested in accordance with the Company Information related to that Fund.

iv. The Plan's purchase and holding of an Interest will not constitute a non-exempt transaction prohibited under ERISA, Section 4975 of the Internal Revenue Code (the "Code"), or any similar laws or other federal, state, local, foreign or other laws or regulations applicable to the Plan and its investments. None of the Wefunder entities nor any of their affiliates, agents, or employees: (A) exercises any authority or control with respect to the management or disposition of assets of the Plan used to purchase an Interest; (B) renders investment advice for a fee (pursuant to an agreement or understanding that such advice will serve as a primary basis for investment decisions and that such advice will be based on the particular investment needs of the Plan), with respect to such assets of the Plan, or has the authority to do so, or (C) is an employer maintaining or contributing to, or any of whose employees are covered by, the Plan.

v. The Fiduciary understands and agrees to the fee arrangements described in the Company Information.

vi. The Fiduciary understands and agrees that, to prevent the assets of the SPV from being treated as "plan assets" for purposes of ERISA and Section 4975 of the Code, the Investor may be prohibited from purchasing or acquiring an Interest or may be required to redeem its Interest or a portion thereof.

3.4. The Investor acknowledges that the SPV and any Administrator, on the SPV's behalf, may not accept any investment from an Investor if the Investor cannot truthfully make the representations contained herein.

4. The Correctness And Accuracy Of All Information Provided By Investor To The LLC Or The SPV.

4.1. The Investor confirms that all information and documentation provided to the LLC, the SPV, and any Administrator, including, but not limited to, all information regarding the Investor's identity, taxpayer identification number, the source of the funds to be invested in the SPV, and the Investor's eligibility to invest in offerings under Regulation Crowdfunding, is true, correct and complete. Should any such information change or no longer be accurate, the Investor agrees and covenants that they will promptly notify the Wefunder Parties of such changes via the wefunder.com platform. The Investor agrees and covenants that he, she or it will maintain accurate and up-to-date contact information (including email and mailing address) on the wefunder.com platform and will promptly update such information in the event it changes or is no longer accurate.

4.2. The representations, warranties, agreements, undertakings and acknowledgments made by the Investor in this Subscription Agreement will be relied upon by the LLC, the SPV, and any Administrator in determining the Fund's compliance with federal and state securities laws, and shall survive the Investor's admission as a Member of the SPV.

4.3. All information that the Investor has provided to the LLC, the SPV, and any Administrator concerning the knowledge and experience of financial, tax and business matters of the Investor is correct and complete.

# 5. The Wefunder Parties' Right To Use Investor Information.

5.1. The Investor agrees and consents to the Wefunder Parties, their delegates and their duly authorized agents and any of their respective related, associated or affiliated companies obtaining, holding, using, disclosing and processing the Investor's data:

a. to facilitate the acceptance, management and administration of the Investor's subscription for an Interest on an on-going basis;
b. for any other specific purposes where the Investor has given specific consent to do so;
c. to carry out statistical analysis, market research, and tracking of investment performance over time;
d. to comply with legal or regulatory requirements applicable to the SPV and any Administrator or the Investor, including, but not limited to, in connection with anti-money laundering and similar laws;
e. for disclosure or transfer to third parties including the Investor's financial adviser (where appropriate), regulatory bodies, auditors, technology providers or to the SPV, any Administrator, any Lead Investor, and their delegates or their duly appointed agents and any of their respective related, associated or affiliated companies for the purposes specified above;
1. If the contents thereof are relevant to any issue in any action, suit or proceeding to which the LLC, the SPV, any Administrator, any Lead Investor, or their affiliates are a party or by which they are or may be bound;
g. for other legitimate business of the LLC, the SPV, any Administrator, or any Lead Investor.

5.2. The Investor acknowledges and agrees that it will provide additional information or take such other actions as may be necessary or advisable for the SPV or any Administrator (in the sole judgment of the SPV and/or any Administrator) to comply with any disclosure and compliance policies, related legal process or appropriate requests (whether formal or informal) or otherwise.
5.3. The Investor agrees and consents to disclosure by the LLC, the SPV and any of their agents, including any Administrator or any Lead Investor, to relevant third parties of information pertaining to the Investor in respect of disclosure and compliance policies or information requests related thereto. Without limiting the generality of the foregoing, the Investor agrees that information about the Investor may be provided to the Company in whose securities a SPV will or proposes to invest.
5.4. The Investor authorizes the LLC, the SPV, any Administrator, and each SPV service provider to disclose the Investor's nonpublic personal information to comply with regulatory and contractual requirements applicable to the SPV and its investments. Any such disclosure shall be permitted notwithstanding any privacy policy or similar restrictions regarding the disclosure of the Investor's nonpublic personal information.

# 6. Key Risk Factors

6.1. The Investor understands that investment in a SPV may involve a complete loss of the Investor's investment. In this regard, the Investor understands that such venture investments involve a high degree of risk, and that many or most venture company investments lose money. An Investor may ultimately receive cash, securities, or a combination of cash and securities (and in many cases nothing at all). If the Investor receives securities, the securities may not be publicly traded, and may not have any significant value.
6.2. The Investor understands and agrees that the Interests are subject to restrictions on transfer and cannot be redeemed. Instead, an Investor typically must hold his or her Interest in a SPV until the SPV has sold or otherwise disposed of its investments and the SPV distributes its investments to the investors in the SPV (a "Liquidation Event"). An Investor typically will not receive any distributions until such a Liquidation Event (and may not receive anything even upon a Liquidation Event), which may not occur for many years. The Investor must therefore bear the economic risk of holding their investment for an indefinite period of time.

6.3. The Investor understands and agrees that the Interests: (a) have not been registered under the Securities Act or any other law of the United States, or under the securities laws of any state or other jurisdiction, and therefore an Interest cannot be resold, pledged, assigned or otherwise disposed of unless it is so registered or an exemption from registration is available; and (b) can only be transferred as permitted under Regulation Crowdfunding and subject to the terms and conditions of this Agreement.

6.4. The Investor understands that no guarantees have been made to the Investor about future performance or financial results of the SPV, and an investment in the SPV may result in a gain or loss upon termination or liquidation of the SPV. It is possible that the investors in a SPV will have "phantom income," which could require them to pay taxes on their investment in a SPV even though the SPV does not distribute any income (or does not distribute sufficient income to pay the taxes).

6.5. The Investor understands and agrees that the SPV was formed by and is operated by Wefunder Admin, LLC on behalf of the Company. Investors will have no right to manage or influence the management of any SPV or of the LLC.

6.6. The Investor understands and agrees that the Company may appoint a Lead Investor and that, if appointed, pursuant to a power of attorney granted by the Investor in the Investor Agreement, the Lead Investor will exercise voting authority on behalf of the Investor with respect to the SPV securities the Investor owns.

6.7. The Investor represents that he or she has read and understands the risk factors contained in the Company Information. The Investor understands and agrees that each Company is solely responsible for providing risk factors, conflicts of interest, and other disclosures that investors should consider when investing in securities issued by that Company (including through a SPV), and that the Wefunder Parties have no ability to assure, and have not in any way assured, that any or all such risk factors, conflicts of interest and other disclosures have been presented fully and fairly, or have been presented at all.

6.8. The Investor understands that any privacy statements, reports or other communications regarding the SPV and the Investor's investment in the SPV (including annual and other updates, and tax documents) will be delivered via electronic means, including through wefunder.com. The Investor hereby consents to electronic delivery as described in the preceding sentence. In so consenting, the Investor acknowledges that email messages are not secure and may contain computer viruses or other defects, may not be accurately replicated on other systems, or may be intercepted, deleted or interfered with, with or without the knowledge of the sender or the intended recipient. The Investor also acknowledges that an email from the Wefunder Parties may be accessed by recipients other than the Investor and may be interfered with, may contain computer viruses or other defects and may not be successfully replicated on other systems. No Wefunder Party gives any warranties in relation to these matters.

6.9. The Investor understands and agrees that if he, she or it does not provide a valid taxpayer identification number under penalties of perjury, and attest that the Investor has not been notified by the Internal Revenue Service that he, she or it is subject to backup withholding, the SPV will be required to withhold from any proceeds otherwise payable to the Investor an amount necessary to satisfy the SPV's backup withholding obligations.

6.10. The Investor understands and agrees that if he, she or it does not provide a valid taxpayer identification number to the SPV, the SPV will withhold from any proceeds otherwise payable to the Investor an amount necessary for the SPV to satisfy its tax withholding obligations with respect to such amount. The SPV may also withhold any other amounts representing the SPV's reasonable estimation of penalties that may be charged by the Internal Revenue Service or any other taxing authority as a result of the Investor's failure to provide a valid taxpayer identification number.

# 7. Compliance With Anti-Money Laundering Laws.

7.1. The Investor represents and warrants that the Investor's investment was not directly or indirectly derived from illegal activities, including any activities that would violate U.S. Federal or State laws or any laws and regulations of other countries.

7.2. The Investor acknowledges that U.S. Federal law, regulations and Executive Orders administered by the U.S. Treasury Department's Office of Foreign Assets Control ("OFAC") may prohibit the SPV, any Administrator, or any Lead Investor from, among other things, engaging in transactions with, and the provision of services to, persons on the list of Specially Designated Nationals and Blocked Persons and persons, foreign countries and territories that are the subject of U.S. sanctions administered by OFAC (collectively, the "OFAC Maintained Sanctions").

7.3. The Investor acknowledges that the SPV prohibits the investment of funds by any persons or entities that are (i) the subject of OFAC Maintained Sanctions, (ii) acting, directly or indirectly, in contravention of any applicable laws and regulations, including anti-money laundering regulations or conventions, or on behalf of persons or entities subject to an OFAC Maintained Sanction, (iii) acting, directly or indirectly, for a senior foreign political figure, any member of a senior foreign political figure's immediate family or any close associate of a senior foreign political figure, unless the SPV, after being specifically notified by the Investor in writing that it is such a person, conducts further due diligence, and determines that such investment shall be permitted, or (iv) acting, directly or indirectly, for a foreign shell bank (such persons or entities in (i) - (iv) are collectively referred to as "Prohibited Persons"). The Investor represents and warrants that it is not, and is not acting directly or indirectly on behalf of, a Prohibited Person.

7.4. To the extent the Investor has any beneficial owners, (i) it has carried out thorough due diligence to establish the identities of such beneficial owners, (ii) based on such due diligence, the Investor reasonably believes that no such beneficial owners are Prohibited Persons, (iii) it holds the evidence of such identities and status and will maintain all such evidence for at least five years from the date of the liquidation or termination of the SPV, and (iv) it will make available such information and any additional information requested by the SPV that is required under applicable regulations.

7.5. The Investor acknowledges and agrees that the SPV or any Administrator may "freeze the account" of the Investor, including, but not limited to, by suspending distributions from the SPV to which the Investor would otherwise be entitled, if necessary to comply with anti-money laundering statutes or regulations.

7.6. The Investor acknowledges and agrees that the SPV and/or any Administrator, in complying with anti-money laundering statutes, regulations and goals, may file voluntarily and/or as required by law suspicious activity reports ("SARs") or any other information with governmental and law enforcement agencies that identify transactions and activities that the SPV or any Administrator or their agents reasonably determine to be suspicious, or is otherwise required by law. The Investor acknowledges that the LLC, the SPV, and any Administrator are prohibited by law from disclosing to third parties, including the Investor, any filing or the substance of any SARs.

7.7. The Investor agrees that, upon the request of the LLC, the SPV, or any Administrator, it will provide such information as the LLC, the SPV, or any Administrator requires to satisfy applicable anti-money laundering laws and regulations, including, without limitation, background documentation about the Investor

# 8. Regulatory Provisions

8.1. The Investor understands that no federal or state agency has passed upon the Interests or made any findings or determination as to the fairness of this investment.

8.2. The Investor certifies that the information contained in the executed copy of Form W-9 submitted to the SPV (if any) and/or the taxpayer identification provided to the SPV is correct. The Investor agrees to provide such other documentation as the SPV determines may be necessary for the SPV to fulfill any tax reporting and/or withholding requirements.

8.3. The Investor understands and agrees that the Company may cause the SPV to make an election under Section 754 of the Internal Revenue Code (the "Code") or an election to be treated as an "electing investment partnership" for purposes of Section 743 of the Code. If the SPV elects to be treated as an electing investment partnership, the Investor shall cooperate with the SPV to maintain that status and shall not take any action that would be inconsistent with such election. Upon request, the Investor shall provide the SPV with any information necessary to allow the SPV to comply with (a) its obligations to make tax basis adjustments under Section 734 or 743 of the Code and (b) its obligations as an electing investment partnership.

8.4. The Investor consents to receive any Schedule K-1 (Partner's Share of Income, Deductions, Credits, etc.) from the SPV electronically via email, the Internet and/or another electronic reporting medium in lieu of paper copies. The Investor agrees that it will confirm this consent electronically at a future date in a manner set forth by the Company at such time and as required by the electronic receipt consent rules set forth by the Internal Revenue Service. The Investor may request a paper copy of the Investor's Schedule K-1 by contacting Wefunder Inc. at support@wefunder.com or such other email address as specified on the wefunder.com platform. Requesting a paper copy will not constitute a withdrawal of the Investor's consent to receive reports or other communications, including Schedule K-1, electronically. The Investor may withdraw its consent for electronic delivery or change its contact preferences for such delivery at any time by writing to support@wefunder.com or such other email address as specified on the wefunder.com platform. Such withdrawal will take effect promptly after receipt, unless otherwise agreed upon. Upon receipt of a withdrawal request, the SPV will confirm the withdrawal and the date on which it takes effect in writing (either electronically or on paper). A withdrawal of consent does not apply to a statement that was furnished electronically before the date on which the withdrawal of consent takes effect. The SPV will cease providing information electronically upon termination of the SPV. Notwithstanding the Investor's consent to receive materials electronically, the Investor still may be required to print and attach its Schedule K-1 to a federal, state or local tax return.

# 9. Miscellaneous Provisions

# 9.1. Indemnification

9.1.1. The Investor agrees to indemnify and hold harmless the LLC, the SPV, any Administrator, any Lead Investor, or any partner, member, officer, employee, agent, affiliate or subsidiary of any of them, and each other person, if any, who controls, is controlled by, or is under common control with, any of the foregoing, within the meaning of Section 15 of the Securities Act, and their respective officers, directors, partners, members, shareholders, owners, employees and agents (collectively, the "Indemnified Parties") against any and all loss, liability, claim, damage and expense whatsoever (including all expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) arising out of or based upon (i) any false representation or warranty made by the Investor, or breach or failure by the Investor to comply with any covenant or agreement made by the Investor, in this Subscription Agreement or in any other document furnished by the Investor to any of the foregoing in connection with this transaction, or (ii) any action for securities law violations instituted by the Investor that is finally resolved by judgment against the Investor.

9.1.2. The Investor also agrees to indemnify each Indemnified Party for any and all costs, fees and expenses (including legal fees and disbursements) in connection with any damages resulting from the Investor's misrepresentation or misstatement contained herein, or the assertion of the Investor's lack of proper authorization from the beneficial owner to enter into this Subscription Agreement or perform the obligations hereof.

9.1.3. The Investor agrees to indemnify and hold harmless each Indemnified Party from and against any tax, interest, additions to tax, penalties, reasonable attorneys' and accountants' fees and disbursements, together with interest on the foregoing amounts at a rate determined by the SPV or any Administrator computed from the date of payment through the date of reimbursement, arising from the failure to withhold and pay over to the U.S. Internal Revenue Service or the taxing authority of any other jurisdiction any amounts computed, as required by applicable law, with respect to the income or gains allocated to or amounts distributed to the Investor with respect to its Interest during the period from the Investor's acquisition of the Interest until the Investor's transfer of the Interest in accordance with this Agreement, the LLC Agreement, and Regulation Crowdfunding.

9.1.4. If for any reason (other than the willful misfeasance or gross negligence of the entity that would otherwise be indemnified) the foregoing indemnification is unavailable to, or is insufficient to hold such Indemnified Party harmless, then the Investor shall contribute to the amount paid or payable by the Indemnified Party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect not only the relative benefits received by the Investor on the one hand and the Indemnified Parties on the other but also the relative fault of the Investor and the Indemnified Parties, as well as any relevant equitable considerations.

9.1.5. The reimbursement, indemnity and contribution obligations of the Investor under this section shall be in addition to any liability that the Investor may otherwise have, and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Indemnified Parties.

9.2. Limitation of Liability. The LLC is a Delaware "multi-series" limited liability company. As a multi-series limited liability company, the LLC may operate multiple series with the benefit of segregation of assets and liabilities among each of its series pursuant to the Delaware Limited Liability Company Act, as amended (the "Delaware Act"). Accordingly, the Investor hereby agrees that the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a series (including the SPV) shall be enforceable against the assets of that series only and not against the LLC generally or the assets of any other series. In addition, none of the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to the LLC generally, or any particular series, shall be enforceable against the assets of any other series.

9.3. **Counsel** The Investor understands that Morrison & Foerster LLP serves as legal counsel on certain matters to Wefunder, Inc., Wefunder Portal, LLC, Wefunder Admin, LLC and Wefunder Advisors, LLC and not to the SPV or any Investor by virtue of its investment in the SPV, and that no independent counsel has been retained to represent the SPV or Investors in the SPV. The Investor also understands that Morrison & Foerster LLP has not independently verified any factual assertions made in the Company Information or on the Wefunder website and is not responsible for the SPV's compliance with its investment program or applicable law.

9.4. **Power of Attorney** The Investor hereby appoints each of the Company and Wefunder Admin, LLC as its true and lawful representative and attorney-in-fact, in its name, place and stead to make, execute, sign, acknowledge, swear to and file:

9.4.1. a Certificate of Formation of the LLC and any amendments required under the Delaware Act
9.4.2. the LLC Agreement and any duly adopted amendments;
9.4.3. any and all instruments, certificates and other documents that may be deemed necessary or desirable to effect the winding-up and termination of the LLC or the SPV (including a Certificate of Cancellation of the Certificate of Formation); and
9.4.4. any business certificate, fictitious name certificate, related amendment or other instrument or document of any kind necessary or desirable to accomplish the LLC's or the SPV's business, purpose and objectives or required by any applicable U.S., state, local or other law.

This power of attorney is coupled with an interest, is irrevocable, and shall survive and shall not be affected by the subsequent death, disability, incompetency, termination, bankruptcy, insolvency or dissolution of the Investor; provided, however, that this power of attorney will terminate upon the substitution of another SPV member for all of the Investor's investment in the LLC or the SPV or upon the liquidation or termination of the LLC or the SPV. The Investor hereby waives any and all defenses that may be available to contest, negate or disaffirm the actions of the LLC, the SPV, and any Administrator taken in good faith under this power of attorney.

# 9.5. Confidentiality

9.5.1. The Investor agrees that the Company Information and all financial statements (if any), tax reports (if any), portfolio valuations (if any), private placement memoranda (if any), reviews or analyses of potential or actual investments (if any), reports or other materials prepared or produced by the SPV and/or any Administrator and all other documents and information concerning the affairs of the SPV and/or the Fund's investments, including, without limitation, information about the Company, and/or the persons directly or indirectly investing in the SPV (collectively, the "Confidential Information") that the Investor may receive pursuant to or in accordance with the use of the Wefunder website, an investment in one or more SPVs, or otherwise as a result of its ownership of an Interest in the SPV, constitute proprietary and confidential information about the SPV, any Administrator, and/or any Lead Investor (the "Affected Parties").

9.5.2. The Investor acknowledges that the Affected Parties derive independent economic value from the Confidential Information not being generally known and that the Confidential Information is the subject of reasonable efforts to maintain its secrecy. The Investor further acknowledges that the Confidential Information is a trade secret, the disclosure of which is likely to cause substantial and irreparable competitive harm to the Affected Companies or their respective businesses. The Investor shall not reproduce any of the Confidential Information or portion thereof or make the contents thereof available to any third party other than a disclosure on a need-to-know basis to the Investor's legal, accounting or investment advisers, auditors and representatives (collectively, "Advisers"), except to the extent compelled to do so in accordance with applicable law (in which case the Investor shall promptly notify the SPV of the Investor's obligation to disclose any Confidential Information) or with respect to Confidential Information that otherwise becomes publicly available other than through breach of this provision by the Investor.

9.5.3. To the fullest extent permitted by law, the Investor agrees not to request disclosure or inspection of any such information after the Investor is notified (whether in response to the Investor's request for information or otherwise) that the SPV has determined not to disclose such information.

9.5.4. The Investor agrees that the LLC, the SPV, and the SPV service providers would be subject to potentially irreparable injury as a result of any breach by the Investor of the covenants and agreements set forth in this Item 9.5, and that monetary damages would not be sufficient to compensate or make whole the LLC, the SPV, and the SPV services providers for any such breach. Accordingly the Investor agrees that the LLC, the SPV, and the SPV service providers shall be entitled to equitable and injunctive relief, on an emergency, temporary, preliminary and/or permanent basis, to prevent any such breach or the continuation thereof.

9.6. Amendments. Neither this Subscription Agreement nor any term hereof may be supplemented, changed, waived, discharged or terminated except with the written consent of the Investor and the Company on behalf of the relevant SPV. For the sake of clarity, the restriction on the Company in the preceding sentence applies solely to the form of this Subscription Agreement applicable to SPVs that have had a closing, and does not prevent the Company from changing the form and content of this Subscription Agreement for use in offerings of SPVs that have not had a closing.

9.7. Assignability and Transferability. This Subscription Agreement is not transferable or assignable by the Investor without the prior written consent of the Company on behalf of the SPV, and any transfer or assignment in violation of this provision shall be null and void. The Interests in the SPV being acquired by Investor herein may only be transferred by Investor in compliance with Regulation Crowdfunding and the terms and conditions of this Agreement. If Investor seeks to transfer the Interests, Investor shall first give written notice to the Company and Wefunder Admin, LLC, including the number of Interests that Investor desires to transfer, the proposed price, the name and contact information of the proposed buyer, and any other information that the Company or Wefunder Admin, LLC may reasonably request. To the extent possible, such notice shall be provided through the Wefunder.com website. Any transfer of Interests shall be subject to execution by Investor and the proposed transferee of appropriate documentation, as may be required by the Company or Wefunder Admin, LLC, in their discretion. Investor further acknowledges that pursuant to the LLC Agreement, Wefunder Admin, LLC (as Series Manager of the SPV), may impose additional restrictions on or prohibit the Transfer of Interests for any reason or no reason, in its sole discretion.

9.8. **Repurchase.** In the event that the SPV or any Administrator determines that it is likely that within twelve (12) months the securities of the SPV or the Company will be held of record by a number of persons that would require the SPV or the Company to register a class of its equity securities under the Securities Exchange Act of 1934, as amended ('Exchange Act'), as required by Section 12(g) or 15(d) thereof, the SPV shall have the option to repurchase the Interests from each Investor to the extent necessary to avoid the requirement to register a class of its securities under the Exchange Act. Such repurchase of Interests shall be for the greater of (i) the purchase price of the Interests, or (ii) the fair market value of the Interests, as determined by an independent appraiser of securities chosen by the Administrator. Any such repurchase may only occur with the consent of Wefunder Admin, LLC, as Series Manager of the SPV.

9.9. **Governing Law.** Consent to Jurisdiction. Notwithstanding the place where this Subscription Agreement may be executed by any of the parties hereto, the parties expressly agree that all the terms and provisions hereof shall be construed under the laws of the State of Delaware. Any action or proceeding brought by the SPV or any SPV service provider against one or more investors in the SPV relating in any way to this Subscription Agreement or the LLC Agreement may, and any action or proceeding brought by any other party against the SPV or any SPV service provider relating in any way to this Subscription Agreement or the Company Information shall, be brought and enforced in the state courts of the State of Delaware located in Wilmington or (to the extent subject matter jurisdiction exists therefore) in the courts of the United States located in the District of Delaware; and the Investor and the SPV irrevocably submit to the jurisdiction of both such state and federal courts in respect of any such action or proceeding. The Investor and the SPV irrevocably waive, to the fullest extent permitted by law, any objection that they may now or hereafter have to laying the venue of any such action or proceeding in the courts of the State of Delaware located in Wilmington or in the courts of the United States located in the District of Delaware and any claim that any such action or proceeding brought in any such court has been brought in an inconvenient forum.

9.10. **Severability.** If any provision of this Subscription Agreement is invalid or unenforceable under any applicable law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such applicable law. Any provision hereof that may be held invalid or unenforceable under any applicable law shall not affect the validity or enforceability of any other provisions hereof, and to this extent the provisions hereof shall be severable.

9.11. **Headings.** The headings in this Subscription Agreement are for convenience of reference only, and shall not limit or otherwise affect the meaning hereof.

9.12. **General.** This Subscription Agreement shall be binding upon the Investor and the legal representatives, successors and assigns of the Investor, shall survive the admission of the Investor as a member of a SPV, and shall, if the Investor consists of more than one person, be the joint and several obligation of all such persons.

*[Remainder of page intentionally left blank. Signature page follows.]*

The undersigned have executed this instrument as of the date first above written.

SPV

Recompose I, as series of Wefunder SPV, LLC

By: Wefunder Admin, LLC, its Manager

By: *Founder Signature*

Date:

Name: **Nicholas Tommarello**

Title: **Chief Executive Officer**

Investor

[INVESTOR NAME]

By: *Investor Signature*

Date:

CONTACT INFORMATION:

Name: **[INVESTOR NAME]**

Mailing Address:

City:

Country:

E-mail:

# TERMS APPENDIX FOR THE PURCHASE OF
Recompose, PBC SECURITIES BY Recompose I. A
SERIES OF WEFUNDER SPV, LLC. A DELAWARE
LIMITED LIABILITY COMPANY

**Type of Security:** Priced Round

**Terms** $4.71 per share and a $76.1M pre-money valuation

To view a copy of the contract, please see **Appendix B, Investor Contracts** of
the Form C. The latest Form C or C/A filing be found here:
https://www.sec.gov/cgi-bin/srch-edgar?text=%28FORM-
TYPE%3DC%2FA+or+FORM-
TYPE%3DC%29+and+CIK%3D0001707734&first=2016

**Attachment 5:** `document_5.pdf`

# **RECOMPOSE, PBC**

# **FINANCIAL STATEMENTS**

for the years ended December 31, 2021 and 2020

# **RECOMPOSE, PBC**

# **FINANCIAL STATEMENTS**

**for the years ended December 31, 2021 and 2020**

# **C O N T E N T S**

|  | Page |
| --- | --- |
| Independent Auditors' Report | 1 |
| Financial Statements |  |
| Balance Sheets | 4 |
| Statements of Income | 5 |
| Statements of Changes in Stockholders' Equity | 6 |
| Statements of Cash Flows | 7 |
| Notes to Financial Statements | 8 |
| Supplementary Schedule | 17 |

![img-0.jpeg](img-0.jpeg)

# INDEPENDENT AUDITOR'S REPORT

To the Stockholders and Board of Directors of

## *Opinion*

We have audited the accompanying consolidated financial statements of Recompose, PBC, which comprise the balance sheets as of December 31, 2021 and 2020, and the related statements of income, stockholders’ equity, and cash flows for the years then ended, and the related notes to the financial statements.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Recompose, PBC as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

## *Basis for Opinion*

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Recompose, PBC and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

## *Responsibilities of Management for the Consolidated Financial Statements*

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Recompose, PBC’s ability to continue as a going concern within one year after the date that the financial statements are available to be issued.

1

# Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with generally accepted auditing standards, we:

- Exercise professional judgment and maintain professional skepticism throughout the audit.
- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Recompose, PBC's internal control. Accordingly, no such opinion is expressed.
- Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.
- Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Recompose, PBC's ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

2

# *Report on Supplementary information*

Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The supplementary information on page 17 is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole.

Springfield, Massachusetts
March 15, 2023

3

MP P.C.

# **RECOMPOSE, PBC**

# **BALANCE SHEETS**

**December 31, 2021 and 2020**

|  | 2021 | 2020 |
| --- | --- | --- |
| ASSETS |  |  |
| Current assets |  |  |
| Cash | $7,482,622 | $4,054,791 |
| Accounts receivable | 560,088 | 324,621 |
| Prepaid expenses and other current assets | 23 | 2,162 |
| Total current assets | 8,042,733 | 4,381,574 |
| Restricted cash | 175,549 |  |
| Pre-need trust, restricted | 2,153,728 | 575,733 |
| Long-term accounts receivable | 2,733,471 | 1,149,700 |
| Property, plant and equipment, net | 2,310,310 | 922,394 |
| Intangible assets, net | 815,369 | 562,932 |
| Other non-current assets | 3,750 | 3,750 |
| Total assets | $16,234,910 | $7,596,083 |
| LIABILITIES AND STOCKHOLDERS' EQUITY |  |  |
| Current liabilities |  |  |
| Accounts payable | $505,692 | $104,081 |
| Other current liabilities | 6,929 | 4,828 |
| Total current liabilities | 512,621 | 108,909 |
| Deferred revenues | 5,447,287 | 2,050,054 |
| Other noncurrent liabilities | 30,923 | 9,050 |
| Total liabilities | 5,990,831 | 2,168,013 |
| Stockholders' equity |  |  |
| Common stock, $.0001 par value, 20,000,000 shares authorized, 7,595,000 shares issued and outstanding | 760 | 759 |
| Preferred stock, $.0001 par value, 12,500,000 shares authorized, 6,574,788 shares issued and outstanding | 657 | 524 |
| Additional paid-in capital | 13,843,495 | 7,559,368 |
| Accumulated deficit | (3,600,833) | (2,132,581) |
| Total stockholders' equity | 10,244,079 | 5,428,070 |
| Total liabilities and stockholders' equity | $16,234,910 | $7,596,083 |

See notes to financial statements.

4

# **RECOMPOSE, PBC**

# **STATEMENTS OF INCOME**

**for the years ended December 31, 2021 and 2020**

|  | 2021 | 2020 |
| --- | --- | --- |
| Revenues | $699,470 | $107,645 |
| Direct costs | 236,604 | 4,774 |
| Gross profit | 462,866 | 102,871 |
| Selling, general and administrative expenses | 1,933,350 | 1,243,790 |
| Loss from operations | (1,470,484) | (1,140,919) |
| Non-operating income |  |  |
| Interest income | 2,232 | 2,685 |
| Total non-operating income | 2,232 | 2,685 |
| Net loss | $(1,468,252) | $(1,138,234) |

See notes to financial statements.

5

# **RECOMPOSE, PBC**  
 **STATEMENTS OF STOCKHOLDERS' EQUITY**  
 **for the years ended December 31, 2021 and 2020**

|  | Common Stock | Preferred Stock | Paid-In Capital | Accumulated Deficit | Total Stockholders' Equity |
| --- | --- | --- | --- | --- | --- |
| Balance at December 31, 2019 (unaudited) | $759 | $254 | $3,027,419 | $(994,347) | $2,034,085 |
| Issuance of stock |  | 270 | 4,531,949 |  | 4,532,219 |
| Net loss |  |  |  | (1,138,234) | (1,138,234) |
| Balance at December 31, 2020 | 759 | 524 | 7,559,368 | (2,132,581) | 5,428,070 |
| Issuance of stock | 1 | 133 | 6,284,127 |  | 6,284,261 |
| Net loss |  |  |  | (1,468,252) | (1,468,252) |
| Balance at December 31, 2021 | $760 | $657 | $13,843,495 | $(3,600,833) | $10,244,079 |

See notes to financial statements.

6

# **RECOMPOSE, PBC**

# **STATEMENTS OF CASH FLOWS**

**for the years ended December 31, 2021 and 2020**

|  | 2021 | 2020 |
| --- | --- | --- |
| Cash flows from operating activities |  |  |
| Net loss | $(1,468,252) | $(1,138,234) |
| Adjustments to reconcile net income to net cash used in operating activities: |  |  |
| Depreciation | 165,892 | 24,099 |
| Amortization | 72,647 | 38,968 |
| Loss on abandonment |  | 354,634 |
| Decrease (increase) in operating assets: |  |  |
| Prepaid expenses and other current assets | 2,139 | 63,997 |
| Pre-need trust | (1,577,995) | (575,733) |
| Long-term accounts receivable | (1,819,238) | (1,474,321) |
| Other non-current assets |  | 217,990 |
| Increase (decrease) in operating liabilities: |  |  |
| Accounts payable | 401,611 | 27,062 |
| Other current liabilities | 2,101 | 2,470 |
| Deferred revenue | 3,397,233 | 2,050,054 |
| Other noncurrent liabilities | 21,873 | 9,050 |
| Net cash used in operating activities | (801,989) | (399,964) |
| Cash flow from investing activities |  |  |
| Purchases of property, plant and equipment, net | (1,553,808) | (1,107,752) |
| Purchases of intangible assets | (325,084) | (464,521) |
| Net cash used in investing activities | (1,878,892) | (1,572,273) |
| Cash flow from financing activities activities |  |  |
| Proceeds from issuance of stock | 6,284,261 | 4,532,249 |
| Net cash provided by financing activities | 6,284,261 | 4,532,249 |
| Net change in cash | 3,603,380 | 2,560,012 |
| Cash, beginning of year | 4,054,791 | 1,494,779 |
| Cash, end of year | $7,658,171 | $4,054,791 |
| Reconciliation |  |  |
| Cash | $7,482,622 | $4,054,791 |
| Restricted cash | 175,549 |  |
| Total cash and restricted cash | $7,658,171 | $4,054,791 |

See notes to financial statements.

7

# **RECOMPOSE, PBC**  
**NOTES TO FINANCIAL STATEMENTS**---

# **1. Organization and Summary of Significant Accounting Policies**

# ***Nature of Operations***

Recompose, PBC (the “Company”) is a licensed funeral home offering death care services, specializing in human composting. The Company operates out of Seattle, Washington and offers services to clients across the United States. The Company sells services at the time of death, which is referred to as at-need, and prior to the time of death, which is referred to as pre-need.

The Company’s funeral home services include consultation, the removal and preparation of remains, and the use of the funeral home facility for ceremonial services.

# ***Use of Estimates***

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

# ***Concentration of Cash***

The Company maintains cash balances with a financial institution, which at times exceeds federally insured limits. As of December 31, 2021 and 2020, the uninsured bank balance was approximately $8,785,000 and $3,921,000, respectively.

# ***Basis of Accounting***

The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (GAAP).

# ***Restricted Cash***

Long-term restricted cash of $175,549 reflected on the balance sheets consists of a deposit maintained with a financial institution. This restricted cash is a certificate of deposit which is required pursuant to the terms of the Company’s lease agreement. See footnote 9 for detail regarding lease agreement.

8

# **RECOMPOSE, PBC**  
**NOTES TO FINANCIAL STATEMENTS**---

# ***Pre-Need Trust***

Pursuant to state law, a portion of the proceeds from pre-need sales of services is put into the trust ('pre-need trust') until such time that the Company meets the requirements for releasing trust principal, which is generally performance of services. All investment earnings generated by the assets in the pre-need trust (including interest) are deferred until the services are performed.

# ***Deferred Revenue***

Revenues from the sale of services as well as any investment income from the pre-need trust are deferred until such time that the services are performed. The Company provides for a profit margin for these deferred revenues to account for the projected future costs of providing services on pre-need contracts. These revenues are recognized when the related services are performed and are presented on a gross basis on the statements of income.

# ***Long-Term Accounts Receivable***

The Company sells pre-need funeral contracts whereby the customer enters into arrangements for future pre-need services. At the time of a pre-need sale, the Company records an account receivable in an amount equal to the total contract value less any cash deposit paid. Management evaluates customer receivables for impairment based upon its historical experience, including the age of the receivables and the customers' payment histories. Management believes all receivables are fully collectible as of December 31, 2021 and 2020 and, accordingly, there is no reserve for uncollectible receivables.

# ***Property, Plant and Equipment***

Property, plant and equipment are recorded at cost. Depreciation is computed on the straight-line basis over the estimated useful life of the assets. Additions and major improvements are capitalized. When assets are sold or retired, the related costs and accumulated depreciation are removed from the respective accounts and the resulting gain or loss is recorded in income. Maintenance and repairs are charged to expense as incurred. The Company follows the practice of capitalizing all property and equipment with a cost exceeding $5,000.

Construction in progress costs represent fixed assets costs not yet placed in service. No depreciation was taken on these capitalized costs.

# ***Income Taxes***

The Company is a Public Benefit Corporation. As such, the Company is required to pay income taxes on taxable income. A provision for income taxes is recorded in the accompanying financial statements.

9

# **RECOMPOSE, PBC**  
**NOTES TO FINANCIAL STATEMENTS**---

# ***Income Taxes, Continued***

The Company evaluates all significant tax positions as required by generally accepted accounting principles in the United States. As of December 31, 2021, the Company does not believe that it has taken any tax positions that would require the recording of any additional tax liability nor does it believe that there are any unrealized tax benefits that would either increase or decrease within the next twelve months. The Company's income tax returns are subject to examination by the appropriate taxing jurisdictions. As of December 31, 2021, the Company's federal and state tax returns generally remain open for examination for the last three years.

# ***Revenue from Contracts with Customers***

The Company recognizes revenue in accordance with ASC 606 in the amount to which the Company expects to be entitled to when it satisfies a performance obligation by transferring control over a product or service to a customer.

The Company generates revenues primarily from contracts with customers through the sale of death services.

At the time of a non-cancellable pre-need sale, the Company records an account receivable in an amount equal to the total contract value less unearned finance income and any cash deposit paid. The revenue from both the sales and interest income from trusted funds are deferred until the services are performed. For a sale in a cancellable state, an account receivable is only recorded to the extent control has transferred to the customer for interment rights or services for which the Company has not collected cash. The amounts collected from customers in states in which pre-need contracts are cancellable may be subject to refund provisions.

In addition, the Company maintains a reserve representing the fair value of the refund obligation that may arise due to state law provisions that include a guarantee of customer funds collected on unfulfilled performance obligations and maintained in trust to the extent that the funds are refundable upon a customer's exercise of any cancellation rights. As of December 31, 2021 and 2020, no reserve has been established for refund obligations.

Service revenue is recognized when the services are performed and the performance obligation is thereby satisfied.

# ***Intangible Assets***

Intangible assets consist of research and development costs, patents, and software costs. They are initially measured at fair value and then amortized over their estimated useful lives between 5 and 15 years.

10

# **RECOMPOSE, PBC**  
**NOTES TO FINANCIAL STATEMENTS**---

# ***Advertising***

The Company expenses advertising costs as they are incurred. Advertising expense for the year ended December 31, 2021 was $22,848 ($17,059 - 2020).

# ***Fair Value Measurements***

FASB ASC 820, Fair Value Measurements and Disclosures, provides the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are as follows:

**Level 1** - Inputs are unadjusted quoted prices for identical assets and liabilities in active markets that the Company has the ability to access.

**Level 2** - Inputs, other than the quoted prices included within level 1 that are observable either directly or indirectly.

**Level 3** - Inputs are unobservable inputs for the asset or liability.

The asset or liability's fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

Following is a description of the valuation methodology applied to assets measured at fair value. There have been no changes in the methodologies used at December 31, 2021 and 2020.

Intangible assets: Management tests intangible assets at the reporting unit level for impairment when a triggering event occurs that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

# ***Subsequent Events***

The Company has evaluated subsequent events through March 15, 2023, which is the date the financial statements were available to be issued. See footnote 11 for subsequent events.

11

# **RECOMPOSE, PBC**  
 **NOTES TO FINANCIAL STATEMENTS**---

# **2. Property, Plant and Equipment**

Property, plant and equipment consists of the following at December 31:

|  | 2021 | 2020 |
| --- | --- | --- |
| Leasehold improvements | $593,544 | $488,802 |
| Machinery and equipment | 228,858 | 105,092 |
| Vessels | 606,867 | 352,599 |
| Construction in progress | 1,071,032 |  |
|  | 2,500,301 | 946,493 |
| Less accumulated depreciation | 189,991 | 24,099 |
|  | $2,310,310 | $922,394 |

Depreciation expense for the year ended December 31, 2021 was $165,892 ($24,099 - 2020).

# **3. Pre-Need Trust**

At December 31, 2021 and 2020, the Company’s pre-need trust consisted of cash equivalents. When the Company receives a payment from a pre-need customer, the Company deposits the amount required by law into the pre-need trust that may be subject to cancellation on demand by the pre-need customer. The Company’s pre-need trust related to states in which pre-need customers may cancel contracts with the Company comprises 100% of the total pre-need trust as of December 31, 2021. The assets held in the pre-need trust are required to be used to provide the services to which they relate. If the value of these assets falls below the cost of providing such services, the Company may be required to fund this shortfall.

A reconciliation of the Company’s pre-need trust activities for the years ended December 31, 2021 and 2020 is presented below:

|  | 2021 | 2020 |
| --- | --- | --- |
| Balance at beginning of period | $575,733 |  |
| Contributions | 1,732,537 | $576,687 |
| Distributions | (155,371) | (1,044) |
| Interest | 829 | 90 |
| Balance at end of period | $2,153,728 | $575,733 |

Cash flows from pre-need contracts are presented as operating cash flows in the Company’s statements of cash flows.

12

# **RECOMPOSE, PBC**  
 **NOTES TO FINANCIAL STATEMENTS**

# **4. *Intangible Assets***

Intangible assets consists of the following at December 31:

|  | 2021 | 2020 |
| --- | --- | --- |
| Research and development | $822,423 | $510,989 |
| Patents | 37,323 | 37,323 |
| Software costs | 83,650 | 70,000 |
|  | 943,396 | 618,312 |
| Less accumulated amortization | 128,027 | 55,380 |
|  | $815,369 | $562,932 |

Amortization expense for each of the next five years and thereafter is as follows:

| 2022 | $90,878 |
| --- | --- |
| 2023 | 90,878 |
| 2024 | 77,643 |
| 2025 | 53,908 |
| 2026 | 48,901 |
| Thereafter | 453,161 |
|  | $815,369 |

# **5. *Fair Value Measurements***

The following table summarizes the Company's financial assets that are accounted for at fair value within the fair value hierarchy as of December 31:

| Description | Level 1 | Level 2 | Level 3 | 2021 Total |
| --- | --- | --- | --- | --- |
| Pre-need trust | $2,153,728 |  |  | $2,153,728 |
| Intangible assets | $2,153,728 | $ | $815,369 | $815,369 |
|  | $2,153,728 | $ | $815,369 | $2,969,097 |
| Description | Level 1 | Level 2 | Level 3 | 2020 Total |
| Pre-need trust | $575,733 |  |  | $575,733 |
| Intangible assets | $575,733 | $ | $562,932 | $562,932 |
|  | $575,733 | $ | $562,932 | $1,138,665 |

13

# **RECOMPOSE, PBC**  
**NOTES TO FINANCIAL STATEMENTS**---

# **Fair Value Measurements, Continued**

The availability of observable data is monitored to assess the appropriate classification of financial assets within the fair value hierarchy. Changes in economic conditions or valuation techniques may require the transfer between one fair value level to another. The Company evaluates the significance of transfers between levels based upon the nature of the financial account and size of the transfer.

The following table sets forth a summary of certain changes in the fair value of the Company’s level 3 assets for the year ended December 31:

|  | Intangible assets | 2021 Total |
| --- | --- | --- |
| Purchases | $464,521 | $464,521 |
|  | Intangible assets | 2020 Total |
| Purchases | $325,084 | $325,084 |

There were no transfers and sales of the Company’s level 3 assets for the years ended December 31, 2021 and 2020.

# **6. Deferred Revenue**

The Company defers revenue of pre-need funeral services until the services are performed. All other selling costs are expensed as incurred. Deferred revenues were $2,153,728 and $575,733 at December 31, 2021 and 2020.

The Company cannot estimate the period when it expects its performance obligations will be recognized, because certain performance obligations will only be satisfied at the time of death.

# **7. 401(k) Plan**

The Company has a qualified 401(k) plan under which employees can invest up to a specified amount of their earnings as promulgated by the Internal Revenue Service. The Company made contributions of $10,643 for the year ended December 31, 2021 (2020 - $445).

14

# **RECOMPOSE, PBC**  
**NOTES TO FINANCIAL STATEMENTS**---

# **8. *Related Party Transactions***

The Company’s board members are invested into the Company’s pre-need trust. As of December 31, 2021 and 2020, the amount invested into the pre-need trust by these board members was $9,902 and $9,908.

# **9. *Leases***

In September 2021, the Company entered into a lease agreement for a building in Seattle, Washington, ending in September 2031. The lease agreement is secured by a certificate of deposit in the amount of $175,549. The total rental expense for the years ended December 31, 2021 and 2020 was $107,975 and $159,392, respectively.

In May 2019, the Company entered into a lease agreement for a building located in Seattle, Washington. In May 2020, the Company terminated this lease agreement early resulting in a loss on abandonment. The Company recorded a loss on abandonment in the amount of $401,282 of which $354,634 related to the abandonment of property and $46,648 related to termination fees.

Future minimum lease payments for the above lease are as follows:

| 2022 | $ | 241,800 |
| --- | --- | --- |
| 2023 |  | 247,200 |
| 2024 |  | 254,616 |
| 2025 |  | 262,260 |
| 2026 |  | 270,120 |
| Thereafter |  | 1,250,268 |
|  | $ | 2,526,264 |

# **10. *Preferred Stock***

The Company has issued 6,578,443 shares of Preferred Stock with a par value of $.0001. These shares provide for a 6% cumulative dividend payable only if declared by the board of directors. The Preferred shares also have a right to convert to common stock. As of December 31, 2021, the cumulative and unpaid and undeclared dividends are $2,525,251 (2020 - $667,525).

15

# **RECOMPOSE, PBC**

**NOTES TO FINANCIAL STATEMENTS**

# **11. *Subsequent Events***

The Company has evaluated subsequent events through March 15, 2023, the date the financial statements were available to be issued. The following items were noted:

- In June 2022, the Company terminated a month-to-month lease agreement for a building in Seattle, Washington.
- In September 2022, the Company terminated a long-term lease agreement for a building in Kent, Washington.

No additional events have occurred subsequent to year end which required recognition or disclosure.

16

# **RECOMPOSE, PBC**

# **SELLING, GENERAL AND ADMINISTRATIVE EXPENSES**

**for the years ended December 31, 2021 and 2020**

|  | 2021 | 2020 |
| --- | --- | --- |
| Bank fees | $49,101 | $17,502 |
| Computer expense | 30,113 | 12,590 |
| Depreciation and amortization | 238,539 | 63,067 |
| Employee benefits | 9,091 | 9,774 |
| Education and seminars | 15,832 | 4,143 |
| Insurance | 57,418 | 5,772 |
| Meals and entertainment | 1,434 | 500 |
| Miscellaneous expenses | 14,750 | 3,581 |
| Office expenses | 6,597 | 10,310 |
| Salaries and wages | 755,861 | 309,663 |
| Payroll taxes | 81,343 | 28,395 |
| Pension and retirement | 10,643 | 445 |
| Professional fees | 124,305 | 37,709 |
| Rent | 107,975 | 560,674 |
| Repairs and maintenance | 28,161 | 7,987 |
| Telephone | 959 | 1,179 |
| Travel | 22,603 | 4,799 |
| Utilities | 9,573 | 5,235 |
| Marketing | 22,848 | 17,059 |
| Operations expenses | 211,221 | 45,573 |
| Technology | 66,222 | 17,724 |
| Taxes and fees | 29,876 | 47,750 |
| Outreach and public policy | 38,885 | 32,359 |
| Total | $1,933,350 | $1,243,790 |

See Independent Auditors' Report.

17

**Attachment 6:** `document_6.pdf`

Contact

www.linkedin.com/in/katrina-spade-37047439 (LinkedIn)

Top Skills

Design of Death Care
Death care
Project Management

Certifications

LEED AP Building Design & Construction (BD+C)
Certificate of Sustainable Design and Building
Natural Organic Reduction Operator

Honors-Awards

Echoing Green Fellow
AIA Henry Adams Medal
Western MA AIA Graduate School Fellowship Award
Tau Sigma Delta National Honor Society Membership
Buckminster Fuller Prize (Finalist)

Publications

For more press, please visit www.urbandeathproject.org
Of Dirt and Decomposition:
Designing a Space for the Urban Dead

# Katrina Spade

CEO | Founder | Death Care Advocate | Echoing Green Climate Fellow | Ashoka Fellow
Seattle, Washington, United States

Summary

Founder and CEO of Recompose, a Benefit Corporation designing a new death care experience: regenerative, intentional, and based on nature's way. Our system transforms bodies into soil, so that we can return to the earth after we die. www.recompose.life

Experience

Recompose

Founder and CEO
May 2017 - Present (5 years 11 months)
Seattle, Washington, United States

Recompose offers a new model of death care that honors both loved ones and the planet earth.

Urban Death Project

Founder and Director
April 2014 - December 2017 (3 years 9 months)

The Urban Death Project (UDP) is researching a new system of caring for the dead, using nature to safely and gently turn human bodies into soil.

Corn + Spade Design Build

Co-Founder / Owner
June 2013 - July 2014 (1 year 2 months)
Seattle, WA

Design, build, and project manage residential, commercial, and civic projects in Seattle, WA.

University of Massachusetts Amherst

Green Building Researcher
June 2010 - May 2013 (3 years)

The Dennis Group
Sustainability Coordinator

Page 1 of 2

September 2008 - May 2010 (1 year 9 months)

SF LGBT Community Center

Finance Manager

February 2002 - March 2007 (5 years 2 months)

San Francisco, CA

Ferris Plock Productions

Co-Founder / Owner

January 2000 - January 2002 (2 years 1 month)

San Francisco Bay Area

## Education

University of Massachusetts, Amherst

M.Arch, Architecture · (2010 - 2013)

Yestermorrow Design/Build School

Certificate, Permaculture and Sustainable Design/Build · (2007 - 2008)

Haverford College

B.A., Cultural Anthropology · (1995 - 1999)

Page 2 of 2

**Attachment 7:** `document_7.pdf`

Contact

www.linkedin.com/in/
lesliechristianfinancial (LinkedIn)
northstarasset.com (Company)

Top Skills

Investments
Integrated Capital
Portfolio Management

Certifications

CFA

# Leslie Christian, CFA

Board Member at Recompose PBC
Seattle, Washington, United States

## Summary

Leslie Christian has been a leader in social and environmental investing for more than 30 years. She leads Outside Investments, a division of NorthStar Asset Management.

After spending the first part of her career in banking and on Wall Street, Leslie became passionate about using finance for the benefit of all stakeholders, and went on to serve as President and CEO of Portfolio 21 Investments. During her 17 years at Portfolio 21, Leslie co-founded the firm's pioneering environmental mutual fund as well as Upstream 21, a uniquely-chartered regional holding company for socially and environmentally responsible businesses. In 1993 Leslie co-founded with her colleague and friend Linda Pei the Women's Equity Mutual Fund (now part of Pax World).

Leslie offers portfolio consulting and advisory services to individuals and institutions seeking to align their values and their money through an integrated capital approach to investing and philanthropy. To learn more, visit NorthStarAsset.com and OutsideInvestments.com.

## Experience

Recompose PBC

Board Member

November 2017 - Present (5 years 5 months)

Seattle, Washington, United States

NorthStar Asset Management, Inc.

Integrated Capital Specialist

2012 - Present (11 years)

Boston, MA

Portfolio consulting and advisory services for clients seeking an integrated capital approach. NorthStar specializes in comprehensive investment services for individuals seeking to balance financial objectives with their social and political values.

Page 1 of 3

Leslie E. Christian, LLC

Founder and Manager

January 2013 - December 2016 (4 years)

Portfolio consulting and advisory services for individuals and institutions seeking an integrated capital approach.

RSF Social Finance

Senior Advisor

2013 - December 2016 (3 years)

San Francisco, CA

Member of Field Building Collaborative working toward widespread adoption of Integrated Capital.

Portfolio 21

President & CEO

1995 - 2012 (17 years)

Portland, OR and Seattle, WA

Led investment management, marketing, client service, and operations for firm specializing in socially responsible investing using separately managed accounts. Company also sponsors Portfolio 21 mutual fund, a no-load fund focused on long-term environmental risks and opportunities.

Mercer Investment Consulting, Inc.

Consultant

1993 - 1995 (2 years)

Seattle, WA

Provided investment consulting services to institutional clients, primarily foundations and retirement funds. Services included investment policy development, asset allocation, investment manager selection, performance measurement and evaluation, and investment education.

Sabbatical and Career Transition

Volunteer and Student

1988 - 1993 (5 years)

Seattle, WA

Volunteered for numerous organizations and causes focused on human rights, social justice and women's issues. Studied art history at University of Washington, completing majority of degree requirements. Carried out initial exploration and study of socially responsible investing.

Page 2 of 3

Salomon Brothers
Fixed Income Specialist
1979 - 1988 (9 years)
New York, NY

Developed and marketed interest-rate hedging tools, including futures and options, to financial and industrial institutions, pension funds, and money managers. In 1987, assigned to company's oil trading subsidiary to develop similar tools in crude oil and refined products. Named a Vice President in 1980 and a Director in 1987.

Commercial and Investment Banking
Multiple Positions
1971 - 1979 (8 years)
Seattle, San Francisco, New York

Conducted teller training and investment management for Washington Mutual Savings Bank (Seattle, WA). Managed institutional fixed income sales for Crocker National Bank (San Francisco) and Donaldson, Lufkin, and Jenrette (San Francisco and New York).

## Education

University of California, Berkeley, Haas School of Business
Master of Business Administration (MBA), Finance

University of Washington
Bachelor of Arts (BA)

Page 3 of 3

**Attachment 8:** `document_8.pdf`

Contact

www.linkedin.com/in/peterstroble
(LinkedIn)

Top Skills

Equity Research

Strategic Planning

Product Management

# Peter Stroble

President at Ring Family Investment Company & Operating Partner
at Building Industry Partners

Seattle, Washington, United States

## Summary

Strategically focused business operator and investor with
background in industry consolidation, mergers and acquisitions,
financial management, product development, supply chain
optimization and sales & marketing.

## Experience

Ring Family Investment Company

President

January 2021 - Present (2 years 3 months)

Seattle, Washington, United States

Building Industry Partners

Operating Partner

May 2021 - Present (1 year 11 months)

Seattle, Washington, United States

Alta Forest Products LLC

5 years 11 months

Chief Strategy Officer & Director

February 2020 - March 2020 (2 months)

Chehalis, Washington, United States

Chief Financial Officer & Director

June 2015 - January 2020 (4 years 8 months)

Chehalis, Washington, United States

Chief Operating Officer & Director

May 2014 - May 2015 (1 year 1 month)

Chehalis, Washington, United States

Welco USA (Welco Lumber Co.)

15 years

Page 1 of 2

## President

May 2014 - March 2020 (5 years 11 months)

Seattle, Washington

## Vice President, Sales & Marketing

January 2010 - April 2014 (4 years 4 months)

Edmonds, Washington, United States

## Director of Sales & Marketing

January 2008 - December 2009 (2 years)

Olympia, Washington, United States

## National Account Manager

April 2005 - December 2007 (2 years 9 months)

Shelton, Washington, United States

## Amazon

### Summer Sales Associate

June 2003 - September 2003 (4 months)

Seattle, Washington, United States

Member of Amazon's beta sales team effort to bring 3rd party vendors onto its platform.

## LBM Daily

### Co-Founder & General Manager

June 2000 - August 2002 (2 years 3 months)

Seattle, Washington, United States

## Deutsche Bank

### Associate Analyst - Equity Research

December 1997 - March 2000 (2 years 4 months)

New York, New York, United States

Associate Analyst for Large Cap U.S. Forest Products Companies

## Education

University of Washington - Michael G. Foster School of Business

MBA, Finance

Yale University

BA, American Studies

Page 2 of 2

**Attachment 9:** `document_9.pdf`

Contact

www.linkedin.com/in/
saramoorehead (LinkedIn)
www.alchemycomms.com
(Company)

Top Skills

Corporate Communications
Corporate Social Responsibility
Leadership

# Sara Moorehead

End-of-Life Doula, Self Employed; Retired Strategic Communications Leader

Greater Seattle Area

## Summary

Experienced leader with a demonstrated history of working in the management consulting industry. Strong professional skilled in Strategic Communications, Leader Coaching, People Engagement, Change Management, Crisis Management/Crisis Communications, and Corporate Social Responsibility.

## Experience

Self Employed

End-of-Life Doula

March 2020 - Present (3 years 1 month)

End-of-Life Doulas provide emotional, spiritual, and physical support at an intensely personal and crucial time. We assist people in finding meaning, creating legacy, and planning for how the last days will unfold, asking the question, "What do you need to die in peace?" We also guide and support loved ones through the last days of life and ease the suffering of grief in its early stages.

Recompose (https://www.recompose.life)

Member Board of Directors

June 2018 - Present (4 years 10 months)

Seattle, Washington, United States

Recompose offers an alternative choice to cremation and conventional burial methods, using natural organic reduction to gently convert human remains into soil, so that we can nourish new life after we die.

IslandWood

Member Board of Directors

September 2016 - Present (6 years 7 months)

Bainbridge

IslandWood is a unique environmental education center that opens the door to nature for thousands of children, educators and families in our community. From a 255-acre forested campus on Bainbridge Island that serves 4th &

Page 1 of 4

5th grade classrooms and their teachers as well as grad students pursuing a certificate in Environmental Education, to in-city programs that connect kids to natural-world discoveries in their own communities, to running the education center at Brightwater wastewater treatment plant, IslandWood provides hands-on learning experiences that open up a world of wonder and possibilities for those it serves.

## Alchemy Communications

Chief alchemist

August 2011 - Present (11 years 8 months)

Seattle Washington

The art and science of change communications.

We believe that meaningful communications are required for meaningful growth and change.

Change on any level - from organizational evolution, to reputational issues, to mass change initiatives, to individual growth - depends on knowing the essential elements: where you are going and who it is you need to bring through the transformation.

Whether customers, employees, managers, leaders, or the public, Alchemy Communications approaches strategic communications from the audience perspective to make certain you get the buy-in you need for success.

## BECU

SVP Co-Operative Affairs (retired)

March 2013 - April 2019 (6 years 2 months)

Tukwila WA

BECU is a not-for-profit, member-owned credit union that continues to live the cooperative spirit of 'people helping people' with a major focus on the financial well-being of our members and communities. In this role, I lead the team charged with building BECU's overall reputation, strategic communications, community outreach and engagement, philanthropy, sustainability and financial health.

## Habitat for Humanity Seattle - King County

Member Board of Directors

September 2015 - March 2019 (3 years 7 months)

Seattle

Page 2 of 4

Habitat for Humanity Seattle-King County is a community-based, volunteer driven low-income housing developer. Through its unique model of no-interest, no-profit loans and self-help homeownership, Habitat generates homeownership opportunities, or opportunities for home repair, for low and very-low income households. Through its unique model of no-interest, no-profit loans and self-help homeownership, Habitat generates homeownership opportunities, or opportunities for home repair, for low and very-low income households.

Barclays (independent contractor)

Media relations / consultant

August 2010 - October 2011 (1 year 3 months)

REI

Corporate Communications Manager

May 2009 - July 2010 (1 year 3 months)

Barclays Bank PLC

Director of Communications and Corporate Affairs, UKRB; Global Corporate Responsibility

October 2007 - April 2009 (1 year 7 months)

Barclays Bank PLC

Director of Corporate Affairs, Global Retail and Commercial Banking
2007 - 2007 (less than a year)

Washington Mutual

SVP - IC and Communications Partners

2003 - 2005 (2 years)

## Education

Whitman College

BA, Psychology · (1975 - 1979)

University of Cambridge

Executive Management · (2008 - 2008)

Stanford University Graduate School of Business

Strategic Innovation

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**Attachment 10:** `document_10.pdf`

Thank you for your patience as we organized all the ducks. The next step is for me to get firm commitments from our core investors by January 31. Core investors will each invest $25k or more and will "seed" the Community Round to help us kick it off with a lot of momentum at launch. (We're also working on some cool perks for different levels, including one at $25k+.)

To learn more about Recompose, please take a look at our deck (attached) and video (below):

**Vimeo:** https://vimeo.com/789144670

**Password:** Recompose

As well, here are a few details about the raise:

**Raise type:** Community Round aka Regulation Crowdfunding

**Raise platform:** Wefunder

**Total raise:** $5,000,000

**Minimum investment:** $1000

**Type of share:** Preferred Equity

**Share price:** $4.7066

Let me know if you're interested in joining Recompose as a core investor. And thank you very much for your consideration.

Best,
Katrina

*We are 'testing the waters' to gauge investor interest in an offering under Regulation Crowdfunding. No money or other consideration is being solicited. If sent, it will not be accepted. No offer to buy securities will be accepted. No part of the purchase price will be received until a Form C is filed and only through Wefunder's platform. Any indication of interest involves no obligation or commitment of any kind.*

**Attachment 11:** `document_11.pdf`

Hi Briana,

Some good news to share: we are launching a Community Round of investment, which is open to anyone. The minimum investment is $1000. I've attached our deck. Please also feel free to take a look at the video below.

Vimeo: https://vimeo.com/789144670

Password: Recompose

If you would like to consider an investment of $25k or more, please let me know. We are collecting a group of core investors of that level to commit ahead of the launch to help us get going with a lot of momentum. Otherwise, I'm honored for you to consider investing at whatever level feels comfortable. We will be sending out the link to do so in a few weeks with the public launch.

Thank you again and all the best,
Katrina

We are 'testing the waters' to gauge investor interest in an offering under Regulation Crowdfunding. No money or other consideration is being solicited. If sent, it will not be accepted. No offer to buy securities will be accepted. No part of the purchase price will be received until a Form C is filed and only through Wefunder's platform. Any indication of interest involves no obligation or commitment of any kind.

**Attachment 12:** `document_12.pdf`

You've invested your money in Recompose and seen what we have done with it. From opening the first facility in the world that composts human beings to legalizing the process in six U.S. States to creating an entire movement to change the way we approach the end-of-life, your belief in me and in my team is what has gotten us here.

Now, I'm asking you to take your enthusiasm for our work and help us reach the next step.

**We're launching a Community Round to raise $5M and we are thrilled about it.** A Community Round is a way for private companies to raise investment dollars from their broad network of supporters. Investments will begin at $1000 and are open to anyone - you don't have to be accredited to invest. This type of raise is called Regulation Crowdfunding and Recompose is using the Wefunder platform to do it. It fits our ethos as a company to be able to offer equity in Recompose to everyone who believes in us.

We are also poised to succeed at this exact type of fundraise. Recompose has a newsletter membership of 27,000 people. Our social media networks total over 50,000. Our press coverage reaches millions. In other words, we have the community and the reach to make this GREAT. It's also a huge marketing opportunity - for Recompose and for Precompose.

Here's where you come in: we want to 'seed' our raise with as much (and as many) investments as possible ahead of launching it publicly. **As an existing Recompose investor, we hope you will join in this round to help send a signal that Recompose is a great company to invest in.** You'll be adding equity to your Recompose portfolio, but we aren't offering a specific percentage of dividends this time around. The share price is the same as the A3 Round: $4.7066/share.

**Because of the way Wefunder works, investments of $25k and up are especially valuable.** Each investment of this size sends a strong message that Recompose is worth investing in. It also avoids the fee (6.5%) that Wefunder typically takes for each investment. So, my first ask to you is to consider an investment of $25k or higher.

That said, having as many of our existing investors included in this round is key. The minimum investment is $1000. We hope you will invest at whatever level works for you.

We've created a video (below) and a deck (attached) to help explain what Recompose does. Please take a look and see what you think.

Vimeo: https://vimeo.com/789144670

Password: Recompose

I really appreciate your consideration. And even if you decline to invest again, I really appreciate your letting me know. Thank you very much!

Katrina

RECOMPOSE | Katrina Spade | Founder & CEO | she/hers | www.recompose.life

Testing the waters legal disclosure: We are 'testing the waters' to gauge investor interest in an offering under Regulation Crowdfunding. No money or other consideration is being solicited. If sent, it will not be accepted. No offer to buy securities will be accepted. No part of the purchase price will be received until a Form C is filed and only through Wefunder's platform. Any indication of interest involves no obligation or commitment of any kind.

### UNITED STATES SECURITIES AND EXCHANGE COMMISSION
**Washington, D.C. 20549**

## FORM C

### UNDER THE SECURITIES ACT OF 1933

### Issuer Information

**Name of Issuer:** Recompose, PBC

**Legal Status:** Other

**Jurisdiction of Incorporation/Organization:** DE

**Date of Organization:** 05-10-2017

**Physical Address:** 4 South Idaho, Seattle, WA, 98134

**Issuer Website:** http://www.recompose.life

**Is there a Co-Issuer?:** Yes

**Intermediary Name:** Wefunder Portal LLC

**Intermediary CIK:** 0001670254

**Intermediary File Number:** 007-00033

**Intermediary CRD Number:** 283503

### Offering Information

**Compensation to Intermediary:** 6.5% of the offering amount upon a successful fundraise, and be entitled to reimbursement for out-of-pocket third party expenses it pays or incurs on behalf of the Issuer in connection with the offering.

**Financial Interest in Issuer:** No

**Type of Security Offered:** Preferred Stock

**Number of Securities Offered:** 10624

**Price per Security:** $4.71

**Method for Determining Price:** Dividing pre-money valuation $76,074,578.43 by number of shares outstanding on fully diluted basis.

**Target Offering Amount:** $50,002.92

**Oversubscription Accepted:** Yes

**Oversubscription Allocation Type:** Other

**Description of Oversubscription:** As determined by the issuer

**Maximum Offering Amount:** $4,999,995.32

**Deadline to Reach Target Amount:** 04-30-2023

### Annual Report Disclosure Requirements

**Current Number of Employees:** 16

**Total Assets (Most Recent Fiscal Year):** $16,234,910.00

**Total Assets (Prior Fiscal Year):** $7,596,083.00

**Cash & Cash Equivalents (Most Recent Fiscal Year):** $7,482,622.00

**Cash & Cash Equivalents (Prior Fiscal Year):** $4,054,791.00

**Accounts Receivable (Most Recent Fiscal Year):** $560,088.00

**Accounts Receivable (Prior Fiscal Year):** $324,621.00

**Short-Term Debt (Most Recent Fiscal Year):** $512,621.00

**Short-Term Debt (Prior Fiscal Year):** $108,909.00

**Long-Term Debt (Most Recent Fiscal Year):** $5,478,210.00

**Long-Term Debt (Prior Fiscal Year):** $2,059,104.00

**Revenues/Sales (Most Recent Fiscal Year):** $699,470.00

**Revenues/Sales (Prior Fiscal Year):** $107,645.00

**Cost of Goods Sold (Most Recent Fiscal Year):** $236,604.00

**Cost of Goods Sold (Prior Fiscal Year):** $4,774.00

**Taxes Paid (Most Recent Fiscal Year):** $0.00

**Taxes Paid (Prior Fiscal Year):** $0.00

**Net Income (Most Recent Fiscal Year):** $-1,468,252.00

**Net Income (Prior Fiscal Year):** $-1,138,234.00

**Jurisdictions Offered:**

ALABAMA, ALASKA, ARIZONA, ARKANSAS, CALIFORNIA, COLORADO, CONNECTICUT, DELAWARE, DISTRICT OF COLUMBIA, FLORIDA, GEORGIA, HAWAII, IDAHO, ILLINOIS, INDIANA, IOWA, KANSAS, KENTUCKY, LOUISIANA, MAINE, MARYLAND, MASSACHUSETTS, MICHIGAN, MINNESOTA, MISSISSIPPI, MISSOURI, MONTANA, NEBRASKA, NEVADA, NEW HAMPSHIRE, NEW JERSEY, NEW MEXICO, NEW YORK, NORTH CAROLINA, NORTH DAKOTA, OHIO, OKLAHOMA, OREGON, PENNSYLVANIA, RHODE ISLAND, SOUTH CAROLINA, SOUTH DAKOTA, TENNESSEE, TEXAS, UTAH, VERMONT, VIRGINIA, WASHINGTON, WEST VIRGINIA, WISCONSIN, WYOMING, B5, GU, PR, VI, 1V

### Signatures

**Issuer:** Recompose, PBC

**Signature:** Katrina Spade

**Title:** Founder and CEO

---

**Signature:** Katrina Spade

**Title:** CEO

**Date:** 03-17-2023

---

**Signature:** Leslie Christian

**Title:** Board Member

**Date:** 03-17-2023

---

**Signature:** Sara Hobart Moorehead

**Title:** Director

**Date:** 03-16-2023

---

**Signature:** Katrina Spade

**Title:** Founder and CEO

**Date:** 03-16-2023